It looks like it's going to be another shocker of a day on the ASX with the S&P/ASX 200 (Index: ^AXJO) (ASX:XJO) likely to close below 5,000 points at the end of trading.
Many investors at this point would just feel like giving up and throwing in the towel!
I'm not one of those investors!
In fact, I would be more than happy to buy high quality companies that are taking a beating along with the rest of the market.
With that in mind, here are three stocks that I have recently had a close look at:
1. Ramsay Health Care Limited (ASX: RHC) – I already own shares in Australia's largest and most successful private hospital operator but I have recently been contemplating whether or not I should add to my holdings. The shares are currently trading at around $58 per share after declining from around $68 per share just two months ago. Ramsay has historically traded at a premium to the broader market and this is unlikely to change based on Ramsay's future earnings outlook. The company is forecasting for double-digit earnings growth for the year ahead and the company has a number of long term industry tailwinds that will provide the opportunity for continued growth for many decades to come. Investors who have been waiting for an entry point into this quality stock may benefit from taking half a position now and then waiting and seeing where the stock price moves over the next couple of weeks.
2. Carsales.Com Ltd (ASX:CAR) – Carsales remains the clear market leader in automotive listings in Australia despite a number of competitive pressures and subdued growth in the domestic market. The shares have been trading in a narrow range of between $9-$11 over the last year or so and it appears the stock requires a catalyst for a break out from this range. Carsales' financial year 2015 (FY15) result was solid without being impressive. Net profit after tax (NPAT) increased by 11% with revenue from the core Australian business increasing by 6%, lower than the 9% growth achieved in FY14. This has been a major concern for investors, as this trend has been in place for a number of years and is the dominant driver of earnings for the whole business. Importantly, Carsales has been trying to diversify its earnings base into overseas markets and has been actively acquiring a number of international businesses. The company did provide an upbeat earnings forecast but this wasn't enough to stop the share price falling more than 10% since the profit result. Although the dividend yield is approaching 4%, I would wait for further earnings growth from the international division before being prepared to pay the current multiple of 22x.
3. Credit Corp Group Limited (ASX: CCP) – Credit Corp is Australia's largest receivables management group that specialises in debt collection and debt purchases from corporations. The company also operates a consumer lending division that provides short-term loans to customers with impaired credit records that are distinct from payday loans. Credit Corp's FY15 profit result was broadly in line with expectations including revenue, NPAT and earnings per share growth of 10%. The company also provided a positive earnings outlook for FY16 that could see earnings per share increase by up to 10%, but investors should be aware the company is facing some challenges in its US operations. Despite this, Credit Corp is attractively priced for growth and income. At the current share price, it is trading on a reasonable price-to-earnings ratio of 13 and investors can expect a dividend yield of around 4%.
Looking to sink your teeth into more investment ideas?
