Just the first week into the New Year and already one market theme seems to have taken precedence- cheap oil. Lower petrol prices are a godsend for consumers, but will that be enough to spur on the economy?
I tend to stray away from following macro movements. I would rather concentrate on good quality companies with a "bottom up" investing style. I want to know what makes them tick and how they earn money.
If you understand that, then you can ignore the market when it sells off and pounce on the good stocks. Here are two big stocks that should be on your radar for 2015.
Ramsay Health Care Limited (ASX: RHC) had a remarkable FY 2014 with earnings up about 20% and the private hospital operator's stock sizzled with a 33.6% increase over the past year. In December, the stock was added to the S&P/ASX 50 (ASX: XFL) (Index: ^AXFL), which should open it up to more institutional investing.
It recently announced it was entering a joint venture to operate a number of hospitals in China, its first foray into the highly populated country. This is the next step in its expansion into Asia after Ramsay Health Care started a joint venture with a Malaysian healthcare provider to run a hospital network in 2013. This has huge potential for growth. Foolish investors looking for a solid long-term stock pick have found one in Ramsay Health Care.
Woodside Petroleum Limited (ASX: WPL) is a stock I've written about before as having good growth catalysts. The energy giant is in a unique situation where it has built up a multi-billion dollar war chest just as energy producers are selling off harshly.
Cheap oil causes the market to discount the earnings of many companies in the energy industry. This could bring about a wave of industry consolidation and Woodside could be a big beneficiary. I would definitely be watching Woodside in 2015. Another great thing about the stock is its huge 6.6% fully franked yield. That's a higher yield than all of the big four banks offer, so if you like dividend income, then Woodside may be good for you.
Of these two stocks, I would prefer Ramsay Health Care. Woodside's share price may fall further as crude oil prices don't appear to have stopped their descent as yet. Hold off on the energy producer until at least oil finds a bottom and you may get an even better discount.
