Insurance Australia Group Ltd
Recent results from Insurance Australia Group Ltd (ASX: IAG) were rather mixed and, as such, its shares fell initially before recovering their losses to a degree. The main reason for the disappointment was a fall in first-half profit of 10%, with increasing competition in the industry being the major contributor.
Still, there were reasons for cheer, too, with IAG's underlying margin remaining relatively robust at 13.3% (slightly below the comparable period from the previous year when it was 13.7%). Also, there could be more synergies to come from the integration of the former Wesfarmers business.
IAG currently trades on a price to earnings (P/E) ratio of just 12.1 (less than the wider insurance sector's P/E ratio of 19.8) and seems to offer good value for money and could be due for an upward rerating.
Woodside Petroleum Limited
Results this week from Woodside Petroleum Limited (ASX: WPL) were positive and showed that the resources company has a vast amount of financial firepower. For example, it posted a 38% rise in full-year net profit and stated that it can afford around $6.4bn of further acquisitions over the next few years. This could boost its bottom line and help it to make market share gains.
Despite this, Woodside still offers value for money at its current price level. This is perhaps best evidenced by its P/E ratio, which stands at just 10.7. This is lower than the ASX's P/E ratio of 16.3 and indicates that Woodside could see its share price move higher over the medium term.
Cochlear Limited
Although Cochlear Limited (ASX: COH) is in the process of slashing its dividend, this could be good news for investors in the company. That's because it should put the company on a firmer financial footing and allow it to make the necessary investment within the business to generate improved growth numbers moving forward.
In addition, Cochlear continues to offer good value for money at its current price level. For example, it has a price to earnings growth (PEG) ratio of just 0.93 and, when you consider that the wider healthcare and equipment services sector has a PEG ratio of 1.87, this indicates that it offers growth potential at an attractive price. As such, now could be a great time to add a slice of it to your portfolio.
Of course, finding the best stocks for the long term is a tough task – especially when work and other commitments limit the amount of time you can spend trawling through the index for them.
