With interest rates set to fall as low as 2% this year, it is clear that some of the biggest profits will be made on the equities market.
But it won't be as simple as just buying and holding any old stock. With the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) hovering around 5500 points, many of Australia's stocks have become overpriced – including companies like Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC). Given that they're the two biggest companies in Australia by market cap, there's a good chance most investors hold at least one of them in their portfolios.
If you're trying to build a portfolio today – or even if you're trying to position yourself for market-beating returns – you need to be extra picky with the stocks you're buying. With that in mind, here are four stocks I'd happily buy today if I had $10,000 to spend.
- Greencross Limited (ASX: GXL) is Australia's largest veterinary services provider with an aim to continue expanding across Australia over the coming years. While it controls an estimated 7.5% of the local market now, it is striving for 20% market dominance, implying there is plenty of growth left to profit from. Although the company is confident of hitting its earnings targets, the stock has been sold off recently (down 20% since August) giving investors the perfect buying opportunity.
- Burson Group Ltd (ASX: BAP), which sells car parts to mechanics, could actually benefit from some of the headwinds facing the economy, including higher unemployment. In times of economic uncertainty, individuals tend to hold onto their older vehicles for longer which should generate plenty of demand for Burson's products. With strong growth prospects, Burson seems like an excellent buy right now.
- Woolworths Limited (ASX: WOW) is a fantastic buy today. Investors have sold the shares down heavily in recent months over competition fears and concerns over its Masters Home Improvement chain, but those concerns have been somewhat overplayed. Woolworths offers security, a growing revenue stream as well as a ripper dividend yield (forecast 4.6% fully franked).
- Nearmap Ltd (ASX: NEA), which provides ultra-high resolution aerial photographs, has had tremendous success in Australia and is excelling in its expansion into the much larger U.S. market. Since hitting 83.5 cents early in November, the stock has retreated 28% to be trading at just 60 cents, offering investors the opportune time to buy. While it's certainly not a risk-free bet, this stock has the potential to be a 'multi-bagger' (a stock which climbs more than 200%) if all goes according to plan.
All of these companies have the potential to deliver fantastic returns in 2015 and beyond, but there's one more stock which could prove even better.
