With the ASX being at the same level as it was in October 2013, there are a whole host of blue-chip stocks that now look more attractive than ever. Certainly, the short term could be a somewhat bumpy ride, but for longer term investors there seems to be a bright future for a number of mega caps. If I had a spare $10k to invest, here are three stocks that I would buy today.
Wesfarmers Ltd
Although the growth rate of discount retailers such as Aldi and Costco is likely to concern shareholders of Wesfarmers Ltd (ASX: WES), it remains a highly appealing investment opportunity. That's because it offers a mix of income and value that should allow its total returns to remain strong over the medium term.
For example, Wesfarmers currently trades on a price to book (P/B) ratio of just 1.9, which is very enticing when you consider that the wider food retailing sector has a P/B of 2.6. And, with a fully franked yield of 4.6%, investor demand for Wesfarmers could grow while interest rates are so low, thereby pushing its share price higher during the course of 2015.
Macquarie Group Ltd
Having released an update earlier this week stating that full year profits are set to grow by 10% – 20%, shares in Macquarie Group Ltd (ASX: MQG) have risen by around 8.5%. However, this doesn't mean that it's too late to buy a slice of the company, since it continues to offer growth potential at a reasonable price.
For example, Macquarie trades on a price to earnings growth (PEG) ratio of 1.46, which is lower than the wider banking sector's PEG ratio of 1.63. It also has a beta of 1.12, meaning Macquarie's shares should move by 1.12% for every 1% move in the wider market.
Newcrest Mining Limited
With the price of gold having risen to a five-month high in recent weeks, gold mining stocks such as Newcrest Mining Limited (ASX: NCM) have seen their share prices soar. In fact, Newcrest is up a whopping 26% since the turn of the year, but there could be much more to come.
That's because it is forecast to increase its bottom line by an incredible 60% next year following the current year's expected disappointment. Although Newcrest trades on a relatively high forward price to earnings (P/E) ratio of 32, such a strong growth rate means that it has a PEG ratio of just 0.5. This indicates that exceptional growth is on offer at a very reasonable price and it could be worth buying at the present time.
Of course finding the best stocks in the ASX is a tough ask – especially when work limits the amount of time you can spend trawling through the index for them.
