In the past 12 months, the S&P/ASX200 (ASX: XJO) (^AXJO) has rewarded investors who ran from the poor interest rates of bank accounts in search of dividend stocks. If you picked some high yielding stocks, there's a strong possibility you're sitting on healthy gains of 50% or more.
Savvy investors, regardless of past gains or losses, are constantly looking forward. Re-assessing their positions in stocks and searching for other opportunities. Here's my opinion of what is and what isn't worthy of your time and money at current prices.
#1 Rio Tinto (ASX: RIO)
For long term investors, Rio Tinto should be a 'sell', but a resilience in iron ore prices keeps pushing its share price higher. Rio Tinto is a decent company and has strong management at the helm. If iron ore prices drop, which many have anticipated, downside risks are larger for Rio than its number one Australian rival, BHP. As Foolish investors know, we deserve only the best.
# 2 Challenger (ASX: CGF)
Since I first opined about Challenger, a fund manager and annuities powerhouse, (back in July) the stock has risen around 35%. It still remains a good prospect for both cyclical/short term investors and longer term shareholders. It currently trades on earnings of 9.5 and pays a 3.8% dividend.
#3 Mortgage Choice (ASX: MOC)
Mortgage choice has risen exponentially in recent months (up around 80% year-on-year), but could go higher thanks to significant tailwinds such as low interest rates, rising brokerage commissions and property prices. Mortgage Choice is worthy of a spot on your watch-list.
#4 Ruralco Holdings (ASX: RHL)
Ruralco was, (and still is) one of my favourite small-cap agricultural stocks, but continued hot weather has adversely affected sales and profit margins. Although it's long term prospects remain good, in the short term, its profit may drift sideways until conditions pick up.
#5 Fairfax Media (ASX: FXJ)
Fairfax media's share price has been hammered over the past 6 months, as more investors grew wary of its ability to transition to online subscriptions and advertising. However the company may have hit its lowest point and be on an upwards tick. Keep an eye on this out-of-favour media stock.
Foolish Takeaway
No stock is a buy at any price and shareholders should continually reassess whether, or not, their stocks have ran their race before it's too late. If your ready to buy a new stock but have no investment ideas, you can get our favourite dividend idea for free! Discover The Motley Fool's favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of "The Motley Fool's Top Dividend Stock for 2013-2014."
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Motley Fool Contributor Owen Raszkiewicz owns shares in Ruralco and Challenger.
