The S&P/ASX 200 Index (ASX: XJO) has experienced a purple patch of gains. Wednesday saw Australian shares notch their ninth daily rise from 10 days of trade. The rally has added over 8% to the S&P/ASX 200 Index, since the post-Brexit low of 27 June.
Relevantly for investors, the broad-based upswing has seen stocks like CSL Limited (ASX: CSL), Cochlear Limited (ASX: COH), Transurban Group (ASX: TCL) and Sydney Airport Holdings Ltd (ASX: SYD) trade at or near all-time highs, meaning investors are left paying premium prices for top-quality companies.
Nevertheless, I believe there is still value to be had on the Australian stock market, with the following three shares all buys at current prices.
Retail Food Group Limited (ASX: RFG)
Despite Retail Food Group's management quashing speculation that it is in engaged in discussions to acquire the failed Eagle Boys pizza chain, I believe its shares (and earnings) still have room to grow from current prices.
The pizza-cum-cafe-cum-bakery conglomerate has experienced tremendous year-on-year profit and revenue growth, yet trades on a very reasonable price-earnings ratio. If this growth rate can continue, Retail Food Group's current share price looks cheap by any measure.
Pleasingly, Retail Food Group's management has shared its spoils with investors, upping its dividend 19 consecutive times over the last 10 years with every indication that this trend will continue into the future. Accordingly, Retail Food Group is one company to buy today with its growing dividend yield and strong growth prospects.
Sirtex Medical Limited (ASX: SRX)
As I wrote here last month, Sirtex's share price seems to undervalue the global life science company's underlying business. Management provided an update at the start of June indicating that its reported sales dose growth for the full year was likely to be 15-17%, down from its trend of 19.7% in prior years.
Whilst clearly a slowdown in growth, the important fact is that the company is still growing at astronomical rates. A recent update confirmed guidance (at the top-end), after management reported unaudited sales doses grew at 16.4%, demonstrating its 'slowdown' is not as bad as the market feared.
Although Sirtex's share price has rallied over 20% as a result of the announcement, I believe the company has a long way to go based on its late stage research and development pipeline.
Telstra Corporation Ltd (ASX: TLS)
It's boring, but reliable; Telstra is one stock which belongs in any investor's portfolio as the ubiquitous telecommunications giant continues to grow steadily. Although capital appreciation is unlikely to match that of years gone, Telstra's coveted fully-franked dividend is as safe as houses in the current economic climate, making it one stock to own with interest rates at record lows.
As CEO Andrew Penn has already indicated Telstra will undertake shareholder friendly capital management activities when it announces full-year results in August this year, I believe the stock should be well supported moving forward.
