Most stock brokers effectively make their money by encouraging you to buy shares. Specifically, they encourage you to buy shares in companies which they "cover". These covered stocks are generally companies which they either have corporate relationships with or that they hope to have relationships with.
Given the salesman nature of stockbroking it's important to understand the motivation which is often behind a "sales pitch". That being said, brokers do provide a valuable service and their company research and views are often useful.
Here are five stocks which at least two stock brokers are currently recommending as "buys".
- Suncorp Group Ltd (ASX: SUN) has attracted two "strong buy" recommendations. With the company a significant provider of both insurance and banking services, Suncorp offers a unique exposure to both sectors. The stock is currently priced on a forecast price-to-earnings (PE) multiple of around 14 times.
- QBE Insurance Group Ltd (ASX: QBE) has attracted both a "buy" and a "strong buy" recommendation from two brokers respectively. Having emerged from a few difficult years, the stock's forward PE multiple of just under 14 times could turn out to be an appealing entry point in this turnaround story.
- SEEK Limited (ASX: SEK) has garnered two "strong buy" recommendations. While the forecast PE multiple of 35 times is high, the stock's growth profile is certainly above average too.
- ResMed Inc. (CHESS) (ASX: RMD) shares enjoy both a "buy" and a "strong buy" recommendation from two brokers. Trading on a forecast PE of 24 times and with earnings growth of 25% forecast in the 2017 financial year, it's easy to see why this leading medical device company has attracted these positive broker calls.
- Webjet Limited (ASX: WEB) has received two "strong buy" recommendations. Whilst flat earnings are projected for the current financial year, looking ahead to financial year 2017 and 2018 suggests solid growth is expected, which could make the current PE of just under 24 times attractive. (source: Bell Direct).
