Woolworths Limited
With shares in Woolworths Limited (ASX: WOW) declining following disappointing recent results, it means that they now offer better value for money. Certainly, the outlook for the business is challenging and, over the medium term, sales and margins are likely to come under pressure. However, much of this difficulty appears to be priced in, with Woolworths' shares offering a margin of safety at the present time.
For example, they trade on a price to sales (P/S) ratio of just 0.6 which, when you consider that the ASX and the wider food and staples retailing sector have P/S ratios of 1.63 and 0.98 respectively, means that Woolworths could be due for an upward rerating. That's especially the case if trading conditions are aided by an accommodative monetary policy moving forward.
Super Retail Group Ltd
Even though the RBA decided to leave interest rates on hold at 2.25% recently, Super Retail Group Ltd (ASX: SUL) still looks set to benefit from what remains a loose monetary policy. As well as the potential boost to sales, Super Retail could also see demand for its shares rise over the medium term, as investors begin to take a bigger interest in dividends moving forward.
And, on this front, Super Retail is an enticing stock. That's because it offers a fat, fully franked yield of 4.2% and, with dividends per share having risen at an annualised rate of 23.2% over the last 10 years, it could prove to be an appealing income play that becomes more in-demand during the course of 2015.
Westfield Corp Ltd
Clearly, investors in Westfield Corp Ltd (ASX: WFD) will be hoping for further cuts in the interest rate, since it operates shopping centres in the US and UK and so could benefit from a weakening of the Aussie dollar. And, with a beta of 2, its shares could also rise at a rapid rate if the RBA does cut interest rates.
That's because a beta of 2 indicates that shares in Westfield should rise by 2% for every 1% increase in the level of the ASX. With a falling interest rate likely to boost investor sentiment, Westfield could be a major beneficiary of this. In fact, its 40% gain since listing in June last year may be just the start of share price gains for investors in Westfield.
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.
