With good quality stocks sold off this year, it’s time to build a core portfolio that will stand the test of time. Once you have these in place (stocks that you hold for the long term) you can have a bit of fun buying speculative stocks and assets such as bitcoin, which should be more short-term plays.
Of course this isn’t advice because I don’t know your personal circumstances but it is a good piece of financial education.
Read more by Peter Switzer:
Smart investors are patient long-term investors and buying quality companies when they are sold off is a great way to build up your core portfolio.
So what are 10 beauties that look well-priced right now?
This stock has already had a great start to the week, with market influencers starting to like healthcare stocks again. The consensus of analysts surveyed on FNArena think there’s 9 per cent upside for CSL’s stock price, which is now at $292, but Citi’s expert sees a $330 price in the near future. That’s a 12 per cent lift.
Even though Commonwealth Bank of Australia is our premier bank, National Australia Bank runs a close second and has a new CEO Ross McEwan, who’s doing a good job growing this country’s biggest business bank. The analysts tip 11.1 per cent upside and the most optimistic tipster from Morgans sees the stock price 21.17 per cent higher.
Macquarie is a world-class investment bank and is a must in a core portfolio. Analysts agree seeing an 18.7 per cent upside for MQG’s stock price. Morgan Stanley is really positive on the stock, tipping a 43.63 per cent rise ahead.
BHP is our best miner and currently pays a good dividend. The analysts see a 16.3 per cent upside, but both Citi and Macquarie experts expect that a 31 per cent rise lies ahead!
Woodside gives you exposure to energy at a time when prices seem set to stay high for a long time. The analysts think the stock price will rise by 10.8 per cent, while Morgan Stanley has a target price 28.6 per cent higher than the current one.
In an age where IT and telecommunications is critical to both business and social life, Telstra makes perfect sense. The average stock price rise is 13.8 per cent. The most optimistic call comes from Ord Minnett, with an 18.62 per cent forecast.
7. JB Hi-Fi
JB Hi-Fi is a first rate retailer and the analysts see a 17.2 per cent gain ahead. But Credit Suisse’s expert call is for a 49.83 per cent jump in its share price in the future.
8. Lynas (LYC)
Lynas gives you exposure to the minerals of today and tomorrow, as it mines rare earths used in smart phones and other modern tech products. The average expected gain is 11.4 per cent but Macquarie is unbelievably bullish on the company, with a 61.92 per cent call.
9. NextDC (NXT)
NextDC is the business that owns a big chunk of the cloud our devices depend on. The average gain tipped is 24.8 per cent but UBS sees a near 40 per cent jump in its stock price ahead.
10. Xero (XRO)
Xero is a small business supplier of bookkeeping and other business software to small and medium businesses. It dominates the local SME market and is growing overseas in the US and the UK. The average gain expected is 16.9 per cent, however, Morgan Stanley is a huge believer, seeing a near 75 per cent gain in Xero's share price in the future.
I could easily add other great companies to the list but these 10 are ripper companies. If the average expected gains prove to be right, the portfolio could be up 15 per cent in a year, while if the big calls are right, the gain would be a whopping 38 per cent.
Of course, these forecasted rises are the best guesses of expert analysts but they are about quality businesses at a time when fear is driving share prices down.
And as one of the world’s greatest share players ever, Warren Buffett has advised: “Be fearful when others are greedy and greedy when others are fearful.”