The 3 stocks I’d buy first in the ASX: Bank of Queensland Limited, Automotive Group Holdings Ltd and Sky Network Television Ltd

The 3 stocks I'd buy first on the ASX: Bank of Queensland Limited, Automotive Group Holdings Ltd and Sky Network Television Ltd

Here's why Bank of Queensland Limited (ASX:BOQ), Automotive Group Holdings Ltd (ASX:AHE) and Sky Network Television Ltd (ASX:SKT) are my top 3 picks from the ASX.

Peter Stephens

Having held various senior management positions in the manufacturing sector, Peter founded his own manufacturing company in 1996 that was subsequently sold in 2007. Meanwhile, his passion for investing remains strong and he couples this with writing for The Motley Fool as a freelancer. His investment style is value-oriented, focusing on company fundamentals as well as assessing the strength and presence of a competitive advantage. While above-average growth prospects remain very attractive, a greater focus on dividends has crept in since Peter became a part-time retiree in 2007.

Published August 12, 2014 8:49 am AEST

With the ASX hitting six-year highs recently, before pulling back by over 3%, investors could be forgiven for questioning whether now is a good time to buy shares. However, even though the ASX is still relatively close to its highest level since 2008 and is experiencing a high level of uncertainty, there are still a number of companies that offer strong growth prospects, good value and a decent yield. Here are three companies that tick those boxes and, as such, would be my first 'buys' from the ASX right now.

Bank of Queensland Limited

Although shares in Bank of Queensland Limited (ASX: BOQ) have had a disappointing 2014 thus far, being down 1% while the ASX is up 2%, they offer huge potential going forward. That's because the bank trades on a P/E of just 13.3, which compares very favourably to the ASX's P/E of 16.1. Furthermore, Bank of Queensland offers strong growth prospects, with EPS expected to increase by 10.2% during the next financial year (to August 2015). Meanwhile, income-seeking investors are likely to find the fully franked yield of 5.2% highly attractive, meaning that Bank of Queensland offers growth potential, good value and a great yield at current price levels.

Automotive Group Holdings Ltd

Like Bank of Queensland, Automotive Group Holdings Ltd (ASX: AHE) has had a lacklustre 2014, with shares in the company being flat for the year. However, the future could be a different story, since earnings are forecast to increase by 13.8% in the current year to the end of June 2015. Despite this, Automotive Group has a P/E that is 22% below that of the ASX (12.6 versus 16.1), which means that shares have the scope for an upward rating revision to further boost capital growth. Meanwhile, a fully franked yield of 5.5% remains highly attractive when interest rates are just 2.5%.

SkyNetwork Television Ltd

Sky Network Television Ltd (ASX: SKT) continues to offer investors a potent mix of value and growth despite its share price rising by 7% during 2014. Indeed, Sky is forecast to grow its bottom line by 9.8% in the current financial year to June 2015, while this strong growth rate does not appear to be reflected in the current P/E ratio of 14.6. As a result, shares could continue their 2014 run and, in the meantime, a fully franked yield of 4.1% only adds to their attraction. Indeed, Sky, alongside Bank of Queensland and Automotive Group, appears to be attractive at current levels and could make for a great long term investment.

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.