Recently I've been harping on that the fall in the S&P/ASX 200 (INDEXASX: XJO) over September and the increased volatility in stock prices should be welcomed by long-term investors as it has potentially created opportunities to purchase good stocks at more attractive prices.
I'm certainly not alone in having this view with a number of stockbrokers having recently upgraded their recommendations on some leading blue-chip stocks to "buy" status.
Commonwealth Bank of Australia (ASX: CBA) – broker Bell Potter has joined analysts at BBY and Macquarie Bank by slapping a buy recommendation on Australia's largest bank according to a report by the Australian Financial Review. Bell Potter has a price target of $83, which if accurate would provide a good entry point at the bank's current price around the $76 mark.
Bank of Queensland Limited (ASX: BOQ) – Bank of America Merrill Lynch has upgraded the regional bank to a "buy". With the stock price down 3.8% in the last month, the broker views the share price weakness as a buying opportunity.
Tabcorp Holdings Limited (ASX: TAH) and Woolworths Limited (ASX: WOW) have both been added to the list of "buy" recommendations at broker Credit Suisse. Tabcorp's share price is flat over 2014, while Woolworths' share price has gained less than 2%. With the broker seeing reasonable opportunities for growth at both firms in the coming year, Credit Suisse obviously sees current levels as a good entry point to these two companies.
An even better alternative
Buying blue-chip stocks for the foundation of your portfolio can be a sensible strategy. Because blue-chip stocks are so widely followed and analysed it can be rare to get the opportunity to purchase them at meaningful discounts to their fair value. Arguably the above four stocks could be offering such an opportunity right now, however for investors looking for a stock with more significant upside potential then I would suggest…
