Seek, Ansell and ASX: 3 stocks for 2014

Exposure to jobs, medicine and equities markets is pivotal in 2014.

Andrew Mudie

Andrew joined the growing team of Motley Fool freelance writers in mid-2013 following years of personal development as a passionate self-taught sharemarket investor. At the time, Andrew was an engineer by trade, writer by hobby, and an investing nerd by passion who spent far too many breaks reading, writing and learning. Andrew’s first investing lesson came with his first stock selection in 2011 when takeover rumours caused a spike and subsequent plunge in the share price of Woodside and then the 21% fall in the market through mid-2011. The next four years of investing saw Andrew dabble in a vast array of strategies until settling on his favourite investment methodology, which is closely aligned with that of the Motley Fool: Fundamentals-based long-term buy-and-hold of great companies at great prices.

Published December 2, 2013 6:17 am AEDT

2013 has been a great year for a number of well-known Australian companies. Flight Center (ASX: FLT) is up 80% as Australians have embraced oversea travel with a stronger Australian dollar, while the big four banks are up over 30% by providing the highest and most sustainable dividend yields.

Many investors will now be questioning which stocks will be the big performers in 2014. Here are three I am watching.

Seek (ASX: SEK) has been one of the top stocks in 2013, rising over 90% to now trade at an all-time high of $13.37. Amazingly however, Seek is still going from strength to strength by recently upgrading earnings and revenue expectations for 2014. An analysis by broker UBS pointed to stable or slightly increasing job advertisement volumes and improving domestic yields as the key drivers of growth.

Seek offers investors exposure to a slowly improving domestic economy and growing internet penetration in Asia. Seek is not regarded by many as a 'cheap' stock at current prices, however investors should expect reasonable returns over the coming 12 months if the domestic economy improves.

Ansell (ASX: ANN) makes gloves and personal protective goods in 35 countries for the medical, food preparation, and personal health industries. Ansell has delivered strong growth over the past three years and is currently undertaking the purchase of BarrierSafe Solutions International, a leading North American provider of single-use gloves.

Ansell is a global leader by continually innovating and developing lower-cost manufacturing methods. Analysts expected Ansell to continue doing what it does best in 2013-14 and in the process grow earnings per share by over 10% and dividend yield by around 15%. This should provide a catalyst for share price growth over the short to medium term.

Finally, ASX (ASX: ASX) is in a commanding position to deliver strong profit growth in 2013-14. ASX earns more money when investor confidence is high, resulting in high volumes and frequent initial public offerings. With the ASX 200 (ASX: XJO) up 16% so far in 2013 and interest rates at historic lows, investor confidence is high, which should lead to healthy earnings growth. ASX also only has one competitor, Chi-X, and performs around 90% of the overall market value in trades. ASX's dominant position should see it perform well in 2014 as long as equity markets remain strong.

Foolish takeaway

Investors should consider worldwide themes when deciding on what stocks to target in 2014. Seek offers exposure to as improved Australian economy and increased internet penetration in Asia, while Ansell offers exposure to the healthcare and food preparation sectors, and ASX is leveraged to ongoing strength in equity markets.

Automatic Renewal

By taking up this offer, you will also be enrolled in our auto-renewal program, which is our way of making your ongoing subscription easier by ensuring uninterrupted service. Don't worry, though – you're not locked in, and can cancel your auto-renewal at any time before each 'anniversary' date without question or penalty.