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Peter Switzer: Hello and welcome to Switzer Investing Insights brought to you by nabtrade. Today I want to do something really interesting. You see, I get questions often either on TV or in public arenas, which indicates that a lot of normal investors don't have the same kind of inside information that a lot of professionals have. The professionals have access to the kind of information that brokers and analysts and other market participants are looking at every day.
Peter Switzer: So I thought I would go to FNArena and look at some of the top 50 stocks in the ASX200 index to see which ones of those, according to the experts, has the potential of a double-digit gain in 2019.
Peter Switzer: What you're seeing on screen are the top 20 stocks that have potential for a double-digit gain. Now, the size of gains are so big that even if the analysts and experts are only half right, they'll still be pretty decent returns. Amcor (AMC) have 14% upside, and all the analysts surveyed by FNArena gave this stock the thumbs up. ANZ was one of the most favoured amongst the financial stocks, up 15.1%. Coles (COL), 12.9%, lots of analysts believe that eventually a stock like this that has been taken out of Wesfarmers will eventually have some re-loving happening somewhere down the track. As you can see, a lot of the analysts do like the stock.
Peter Switzer: Macquarie (MQG), 13.2%, that's probably linked to the belief that the US economy will do better, were the thoughts when the big sell offs before December and the stock market were noted. South 32 (S32) is very popular. Suncorp (SUN), 20.6%. As I said earlier, even if only half of this is right, this still wouldn't be a bad gain, particularly when you throw in dividends and franking credits. Westpac (WBC), 12.7%. And Woodside, 12.8%, clearly resting on the idea that OPEC and the northern OPEC rivals will get their act together and keep energy prices relatively high in 2019.
Peter Switzer: That was the double-digit gainers in the top 20. Even though I'm not as bullish about stocks this year as I was at the beginning of 2017, before we started hearing about a Trump trade war and the royal commission into financial institutions, I still believe stocks are heading up over 2019. And that's why I'm keen to look for quality companies, namely top 50 companies, that have a great potential of a double-digit gain.
Peter Switzer: Now I'm going to concentrate on the stocks number 21 to 50 to see which ones the analysts, the experts, believe have the potential for double-digit gain.
Peter Switzer: Here is a list of the double-digit gainers in the group of stocks numbered 21 to 50 in the ASX200 index. Aristocrat Leisure (ALL), 35.7% upside, and most analysts really still like the stock despite the fact it has not responded. It probably has had the difficulties of the sell-off pre-December. Charlie Aitken still repeats his affection for the stock and his belief that this potential upside, 35.7%, is quite significant. Caltex Australia (CTX), 18.5%. James Hardie (JHX), 38.8%. Lend Lease (LLC) has been a disappointing company but a lot of the analysts believe a lot of its problems are now behind them, 25.2%. Oil Search (OSH) is always loved by lots of the analysts, a 14.7% upside there clearly linked to a belief that energy prices are going to go up and not down. Origin Energy (ORG), 21.5%. QBE, this is a company that does well when interest rates rise, particularly in the USA. We know that the fed is going to control the rate of interest rate rises, but still. The US and surrounding economies are now experiencing higher interest rates, and that's usually good for QBE.
Peter Switzer: Finally, Santos (STO), this is a changed company since it's had a new CEO in Kevin Gallagher, and the company has done well ever since. The analysts believe there's plenty of upside for Santos at 15.7%.
Peter Switzer: That's the wrap-up of the companies in the top 50 stocks in the ASX200 Index that have potential upside of double-digit gains. The size of the gains are so big when you think about it, and I made this point earlier in the piece, that even if the gains are only half of what's been predicted, they will be substantial gains. When you add in dividends and franking credits, there's a potential swag of very good companies worth considering when you're putting together your portfolio ideas for 2019. That's Switzer Investing Insights brought to you by nabtrade. Thanks for joining us.
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The content on Switzer Super Report has been prepared without taking account of individual financial, objectives, needs or financial situation. It does not constitute formal advice. Before acting, any individual should consider the appropriateness of the information, having regard to the individual’s financial situation, needs and objectives. Past performance is not a guide for future performance. AFSL 286 531.
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