There's nothing magical about the turning of a calendar page. Economies, businesses and markets just keep on doing what they were doing yesterday or last week, oblivious to our journey around the sun. In that sense, January 1st is no different to April 16th or September 23rd.
That said, each new year brings hopes of a new start. It represents the opportunity to reassess, to reset – and to make new year's resolutions.
Fitness and weight loss often top the list, but investors should take the chance to reassess their portfolio to make sure they are holding the shares that present the best opportunities.
Here are four businesses that I think represent good value for investors at the beginning of 2012:
QBE Insurance
This very well run global insurer has a wonderful track record of growth by both acquisition and in the number of policies on issue. Long-time CEO Frank O'Halloran has guided the company through the choppy waters of a downturn in the global economy, falling insurance prices and an unusually large number of recent catastrophes.
With US interest rates at effectively zero, investment returns on QBE Insurance's (ASX: QBE) cash will be low for the foreseeable future, but recent share price declines have more than accounted for what is a short-medium term issue. Investors stand to do well from the current business, and today's price provides what is effectively a free kick on any acquisition activity and the management talent and bench strength of this insurance powerhouse.
Coca-Cola Amatil
Coca-Cola Amatil (ASX: CCL) has a surprisingly diverse range of businesses, both geographically and across a wide product range. With operations stretching as far as Indonesia, where the company has enjoyed strong growth rates, Coca-Cola Amatil will benefit from a growing middle class in one of the most populous countries on Earth. Closer to home, the company produces everything from its namesake soft drink to coffee, fruit juices, flavoured milk and alcoholic beverages, as well as the SPC Ardmona food business.
Another business with a long-term CEO in Terry Davis, Coca-Cola Amatil has strong brands, a business that understands the customer and marketplace, and a record of shareholder-friendly decision-making. While the vagaries of the weather can impact Coca-Cola Amatil from year to year, those impacts even out over time. While not statistically cheap, this is a fairly valued business, with upside from successful deployment of its strategy in Indonesia, and its presence across multiple beverage categories here at home
Westfield Group
The world's largest retail landlord, Westfield Group's (ASX: WDC) share price has suffered along with other property groups in the wake of the GFC, although far less so due to a lower debt load, and high occupancy rates.
The threat from online retail is real, however I believe the strip shops and suburban malls will be the first to suffer from that trend, and the major malls such as Westfield will likely continue to be 'destination' centres for consumers.
While the timing of the economic upswing here and in the developed nations of Europe and North America remains uncertain, Westfield is buying inexpensive assets in markets where they expect organic retail growth (South America) and to be able to drive a trend to mall-based shopping (Italy). Westfield will also benefit from increased turnover in its existing centres as consumer confidence improves.
Telstra
The stock that many investors love to hate, Telstra (ASX: TLS) has taken many of us on a roller coaster ride over its relatively short life as a listed company. Putting our experiences aside and reassessing the business on the basis of today's prospective value, Telstra makes its way onto our list of top stocks.
The National Broadband Network is seemingly settled (notwithstanding the uncertainty created should the coalition win at the next federal election), the company is now focused on improving the customer experience and the trend towards mobile internet access continues unabated. With the $0.28 dividend seemingly locked in, Telstra represents good value and a solid income stream that makes it a worthy portfolio cornerstone. As a reminder, back in August 2011 when the shares were trading at $2.90, our Investment Analyst Dean Morel named Telstra as his top ASX 20 pick for the long-term.
Foolish take-away
No-one can foresee the future, and an arbitrary 365 day period holds no particular value. I have no way of knowing what events will impact these businesses in the coming year, nor what investors will make of those events and how share prices will move as a result.
Accordingly, these are four businesses I think investors should consider for their portfolios – shares that are reasonably priced, have good medium- and long-term prospects, and carry a reasonably low level of business risk.
They aren't speculative picks that might double overnight, but I expect, steadily improving business results from these companies that I hope will compound nicely over time, and with less risk.
Are you looking for more quality stock ideas? Motley Fool readers can click here to request a new free report titled The Motley Fool's Top Stock For 2012.
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Scott Phillips is The Motley Fool's feature columnist. Scott owns shares in QBE, Coca-Cola Amatil, Westfield and Telstra – we eat our own cooking. The Motley Fool's purpose is to educate, amuse and enrich investors. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
