THE FIVE BEST ASX STOCKS FOR 2016

Transcription

1 THE FIVE BEST ASX STOCKS FOR 2016

2 THE FIVE BEST ASX STOCKS FOR 2016 By Kris Sayce, Editor, Money Morning The hardest thing for any investor when it comes to buying stocks is to know where to start. There are more than 2,000 stocks listed on the Australian Securities Exchange (ASX). On any given day, a bunch of those stocks will rise, and a bunch will fall. Obviously, you want to invest in the stocks that will rise. In this special report, I ll highlight the five Aussie stocks that my analysis shows have the best chance of rising in Whether you re a novice investor ready to take your first steps into the stock market, or a seasoned veteran looking for your next punt (or investment), this report can help you take the next step. In a moment, I ll reveal which five stocks you should consider buying right now, and why these five stocks could be the best performers on the ASX over the next year. But first, let me introduce myself Welcome to Money Morning My name is Kris Sayce. I m the editor of Money Morning, the free daily eletter you ve just signed up for. I ve been in the investment markets for nearly 20 years. I first cut my teeth on the market in the City of London. Today, I write to more than 90,000 Aussie investors each day in Money Morning. And the research firm I run Port Phillip Publishing helps more than 40,000 Aussies manage their finances by providing timely and actionable investment advice. We ve got a pretty good track record too, which is why we re Australia s largest financial publishing firm. As part of that service, I also write, research and edit a monthly premium investment advisory, Tactical Wealth. In that monthly advisory, I show Aussies which stocks to buy (and sell), and help them make the most of the current market conditions regardless of whether the market is going up or down. Today, in this report, I ll let you inside some of the research I do for Tactical Wealth. I ll also give you a flavour for some of the subjects we write about each day in Money Morning. So, let s get cracking as I reveal my five best ASX stocks for

3 2016 s Best Stocks #1 CSR Ltd [ASX:CSR] CSR is Australia s leading building products company. It has a market capitalisation of around $1.5 billion. The share price has fell in 2015, but gains are possible if the Aussie property market continues to grow, and if interest rates stay low for an extended time. I expect CSR to continue to grow revenue and profits in 2016 and to maintain a healthy dividend (currently around 6.9%) with further room for growth. Buy CSR Ltd if you agree with me that interest rates will stay low in s Best Stocks #2 Fortescue Metals [ASX:FMG] Fortescue is Australia s third biggest iron ore producer. The stock has slumped since the resources peak in But despite the negative news on iron ore, China remains a huge buyer of the resource. And given that projections are for China s economy to double within the next 12 years, this will no doubt lead to further demand for iron ore and other Aussie resources. This is a high risk play, but I expect that 2015 will have been the bottom of the resource cycle and 2016 will be the year of recovery. Buy Fortescue if you agree with me that 2016 is the turnaround year for the Aussie resources sector s Best Stocks #3 Qantas [ASX:QAN] The Qantas share price was ravaged by higher costs, including a high oil price. But with the slump in oil prices, this has been a fillip for the Qantas stock price. Qantas still dominates the Aussie market, and remains one of the preferred carriers for Aussies travelling overseas. Providing oil prices remain relatively low in 2016, I expect the stock to keep rising in the years ahead. It could even lead to a resumption of dividend payouts in Buy Qantas if you agree with me that lower oil prices will provide a boost to Qantas s profit potential s Best Stocks #4 JB Hi-Fi [ASX:JBH] recovered well in 2015 after a rotten 2014 for Aussie retailers. The high Aussie dollar made it more cost effective for Aussie consumers to do their discretionary spending offshore via the internet. High local petrol prices also had a negative impact on most discretionary retailers. But that has changed. Oil prices are lower and so is the Aussie dollar. 3

4 That means it s no longer as cost effective for consumers to buy goods offshore. This should provide a boon to the retail sector. And although the internet will continue to provide competition for JB Hi-Fi, it has a great history of innovating and adapting to changing market trends. Buy JB Hi-Fi if you agree with me that this Aussie retailer can bounce back on low oil prices, the lower Aussie dollar, and increased consumer spending s Best Stocks #5 Macquarie Group [ASX:MQG] Macquarie Group had to remodel its business after the collapse of the infrastructure investing model in Since then the company has refocussed its business on wealth management and trading. The company is also trying to increase market share in the mortgage business through partner Yellow Brick Road. The Macquarie share price skyrocketed in early 2015 and has remained high in a relatively sticky economic environment. If consumer confidence improves in 2016 and investors begin to take more risks by allocating assets to stocks and other investments, this should be a boost for Macquarie. Buy Macquarie Group if you agree with me that the company can make the most of increased consumer confidence and a greater amount of investor risk-taking. So, those are my top five stocks for Naturally, anything could happen between now and the end of But if I m right about the broad direction of the market, these stocks should do well and even outperform the index. Just remember that although I believe these are the best five stocks for 2016, they may not suit your risk or investing profile. You should do your own research on these opportunities, and if necessary, consult an advisor for personal financial advice. But looking at the top stocks on the ASX is just one part of what we do each day at Money Morning Your subscription to Money Morning The truth is we explore dozens of stories in Money Morning (the free e-letter you ve just signed up for), depending on news and the trends we see forming. And as you ll see, the financial world and the investment markets cover so many different topics, so by necessity, Money Morning does too. Each day, we look at current events and try to anticipate the events of the future for our readers to profit (and protect themselves). 4

5 There is a whole world of ideas from history to economics to geopolitics and that s just for starters. There s also the events that impact on your daily life, from interest rates to stock markets to house prices and commodity prices. But don t think we ll just rehash stuff you ll read in the mainstream press. Our goal is to present ideas to you that never follow the crowd. We look at things differently and do this every day for our readers. It s often unique and always entertaining. Make sure to check out our website for the latest articles, commentary and updates on resources, small-cap stocks, asset allocation and other stories. You should find the first issue of Money Morning in your inbox within the next couple of days. Until then, I hope you have found this report useful, and I look forward to you staying on as a Money Morning reader. Kris Sayce Editor, Money Morning Warning: While useful for detecting patterns the past is not a guide to future performance. The value of any investment, and the income derived from it, can go down as well as up. For any investment, never invest more than you can afford to lose, and keep in mind the ultimate risk is that you can lose whatever you ve invested. While useful for detecting patterns the past is not a guide to future performance. Some figures contained in this report are forecasts and may not be a reliable indicator of future results. All advice is general advice and has not taken into account your personal circumstances. If in doubt of the suitability of an investment please seek independent financial advice.please download and read our Financial Services Guide: Money Morning is published by Port Phillip Publishing Pty Ltd. Registered Office: Port Phillip Publishing Ltd Pty, Bridport St, Albert Park 3206 Port Phillip Publishing (ACN: ) (AFS License: ). All content is 2016 Port Phillip Publishing Pty Ltd. All Rights Reserved. cs@moneymorning.com.au 5