Even though the ASX has endured a disappointing recent period, with it being up just 4% in the last year, it arguably still offers the best investment opportunity out of any asset class. For example, you can generate a decent yield, have the chance to make an excellent capital return, and also trade at the click of a button in highly liquid markets.
Of course, it's not always a profitable endeavour but, in the long run, double-digit returns can be achievable. With that in mind, can these three stocks add value to your portfolio and deliver superb returns moving forward?
Santos Ltd
The recent update from Santos Ltd (ASX: STO) was warmly received by investors, with the company's share price moving up by over 5% in response to it. That's because the company recorded a 2% rise in sales for the December quarter to a record $1.09 billion. A key reason for this was a 15% rise in production, aided by the Papua New Guinea (PNG) liquefied natural gas project, which countered falling energy prices.
Although write-downs are anticipated, Santos currently trades on a price to book (P/B) ratio of just 0.74, which indicates that it has a wide margin of safety. As such, it could be worth buying at the present time ahead of a potential rerating.
Macquarie Group Ltd
Also releasing an impressive update recently was Macquarie Group Ltd (ASX: MQG), with it stating that profit for the full-year is expected to be higher than previously stated guidance. As with Santos, this pushed Macquarie's share price higher, but shares in the company still appear to offer excellent value for money.
For example, Macquarie trades on a P/B ratio of just 1.72. Certainly, that's higher than the wider market P/B ratio of 1.25, as well as the banking sector P/B ratio of 1.31. However, with Macquarie having such strong earnings growth prospects, that premium could well expand over the medium term, thereby making Macquarie worth buying at the present time.
Woolworths Limited
The recent trading update from Aldi that showed sales growth of 13% has made many investors understandably concerned about Woolworths Limited (ASX: WOW), with market sentiment being somewhat weak as investors worry that the Aussie grocery market will follow the UK and become all about pricing.
However, Woolworths remains a highly appealing stock to own. For example, it has a superb track record when it comes to earnings growth, with the company's bottom line having risen at an annualised rate of 11.2% over the last 10 years, which highlights the relative stability that Woolworths offers. And, while its shares do trade on a premium to the wider market (they have a P/B ratio of 3.9), they seem to be well worth it due to their solid long term potential.
