With the ASX being down 0.5% since the turn of the year, many Aussie investors are understandably wondering whether 2015 will be a disappointing year. After all, the economy is enduring a challenging period and its near term prospects are uncertain.
However, with a relatively wide margin of safety on offer at the moment, it could be the perfect time to buy high quality shares. Do these three stocks fit the bill?
Brambles Limited
Pooling solutions company Brambles Limited (ASX: BXB) could prove to be a stunning buy at the present time. That's because it has a relatively high beta of 1.15, which means that its shares should move by 1.15% for every 1% move by the wider index. And, with the RBA apparently readying itself for an interest rate cut, the ASX could receive a short-term boost and see its level move higher, which would clearly be great news for investors in Brambles.
In addition, Brambles also offers good value for money compared to the index. For example, it has a price to earnings growth (PEG) ratio of 1.81, which is lower than the ASX's 2.03 and means that share price growth could be on the cards.
Insurance Australia Group Ltd
The last year has been a good one for investors in Insurance Australia Group Ltd (ASX: IAG), with the insurer's share price rising by an impressive 9%, while the ASX is up just 1%.
Looking ahead, there could be more growth to come, since IAG is expected to grow its bottom line by 5.9% next year, which is roughly in-line with that of the wider market and comes after a period of improved finances for the business. For example, it has increased cash flow at an annualised rate of 17.2% over the last five years and this puts it on a firmer financial footing to deliver future growth.
It also has a P/E ratio of just 12.1, which means it could be a strong performer this year.
Woodside Petroleum Limited
Shares in Woodside Petroleum Limited (ASX: WPL) have made a bad start to 2015, with them being down 14% since the turn of the year. Clearly, they are likely to remain volatile, but could be worth buying for the long term.
That's because Woodside trades on a very reasonable valuation even when its deteriorating bottom line is take into account. For example, using next year's expected earnings, Woodside trades on a P/E ratio of 15, which is only slightly higher than that of the ASX, and with most investors being of the view that the oil price will rebound over the medium to long term, Woodside could be a sound buy for 2015 and beyond.
