Iron ore, oil, the Aussie dollar, consumer sentiment, interest rates, GDP, the ASX. All down, down, down….
Fools adding quality stocks to their portfolios- up, up, up!
When market sentiment is down and more people are thinking of the holiday season than the moves of the S&P/ASX 200 Index (ASX: XJO) (Index: ^AXJO), you should put Christmas shopping on hold and work on your stock shopping list.
You may even pick up some discounts as the ASX goes quiet before the New Year as well.
That allows you to buy more of what you like and yields bump up, too. Now that's a merry, merry Christmas for all of us!
Here are three big-name stocks that are looking cheap lately.
1) Macquarie Group Ltd (ASX: MQG)
The investment bank could see a boost in its mortgage lending if interest rates are cut in 2015. Already, it has seen strong growth in this area with the rising housing market. It may be affected by proposed prudential lending limits being talked about by the RBA, but possibly the surge in loans following any rate cuts may offset them. The stock is down from its November $62.49 high and pays a 4.7% yield partially franked. US stock markets are near record highs despite oil plummeting, so the bank's international fund management operations could see continued earnings growth there.
2) Caltex Australia Limited (ASX: CTX)
The fuel refiner and distributor has been on the rise since July, up about 36%. It is restructuring its business by reducing its refining operations and concentrating on better margin fuel distribution. It has one of the biggest distribution networks in Australia through its namesake petrol station chain and tie-up business with Woolworths Limited (ASX: WOW). A sudden, big drop in world oil prices helps the company's bottom line. "The sharp decline in Brent crude oil prices in recent weeks has been a major contributor to the stronger refiner margin in the second half as product prices have not fallen as quickly as the crude price," according to the company. Its 23 PE ratio is relatively low compared to the high-double digit earnings growth expected over the next couple years.
3) REA Group Limited (ASX: REA)
This stock has gone flat since October when it announced it will acquire the US's third-largest real estate search website company Move Inc (NASDAQ: MOVE) together with News Corp (NASDAQ: NWS). The market may be trying to digest how this acquisition will work out for the fast-growing company and operator of Australia's number one property search website realestate.com.au. Its earnings growth is forecast to rise 27% annually in the next two years according to analyst consensus. The stock is trading at 33 times earnings, so the price-earnings to growth (PEG) ratio shows a reasonable stock pricing. Amongst high-growth stocks, it is one of the best to hold in my opinion.
