It has been a day to forget for shareholders of the big four banks today following the disappointing interim results of Westpac Banking Corp (ASX: WBC). With the banks all nursing declines, the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has been dragged down by 0.7% so far.
Whilst the banks go through what could be a very turbulent week, I feel it might be best to look further afield and see what else is out there for investors to snap up.
According to CommSec, there are a couple of shares on the ASX which have recently been upgraded to a buy rating by brokers. Perhaps these could be worth considering as alternatives to the banks today.
AGL Energy Ltd (ASX: AGL)
AGL Energy seems to have found favour amongst brokers as it exits the exploration and production side of its business to focus on supplying wholesale and retail customers with energy supplies. It was recently upgraded by them to a moderate buy rating, which could be an indication of share price gains ahead for the soon to be asset-light AGL Energy.
The company has been busy selling non-strategic assets and recently disposed of its 50% share in the Diamantina Power Station for $151 million to APA Group (ASX: APA). This puts it on target to sell $1 billion of non-core assets by FY 2017.
I believe AGL represents a good long term investment prospect that should produce steady growth and a solid dividend.
Australian Pharmaceutical Industries Ltd (ASX: API)
The owner of the Priceline, Soul Pattinson and Pharmacist Advice brands received a strong buy rating at the end of last week. This shouldn't come as a surprise to its shareholders who saw the company deliver an 18% increase in underlying profit at its recent interim results.
The company's pharmacy distribution business has been holding back the company somewhat recently, but management believes that this will start to pick up in due course and complement the accelerating growth of its core business.
The company has plans to grow its store count from 425 stores to 500 within the next few years. I believe this 18% growth in its store network should allow the company to continue growing its sales for a number of years, making an investment today potentially very profitable in my opinion.
Foolish takeaway
Of course, brokers don't always get their ratings right. But I would have to agree with them this time. I believe both shares have the potential to be good long term investments. Just like these fantastic shares are also. Have a look and see for yourself!
