This week’s production report from BHP Billiton (LSE: BLT) (NYSE: BBL.US) showed that the company is not slowing down its ambitious production targets. In fact, while politicians and its rivals are encouraging it to reduce the production of iron ore so as to provide some stability for the wider Australian economy, BHP Billiton is more focused on lowering its cost curve and also on successfully spinning off its non-core assets via the South32 project.
And, with BHP Billiton having one of the lowest cost bases in world mining, its future potential relative to its peers looks bright. Furthermore, its yield of 5.5% indicates that its shares offer excellent value for money at the present time.
Unilever’s (LSE: ULVR) recent update showed that the economic challenges facing two of its key markets, China and Europe, may be subsiding. In fact, the company’s sales numbers were perhaps slightly better than anticipated, and this bodes well for the company’s long term future, since it stands to benefit greatly from the effects of Eurozone quantitative easing and the possibility of Chinese stimulus.
And, while Unilever trades on a price to earnings (P/E) ratio of 22.5, the consistency and robust nature of its earnings profile means that it remains a great value company to invest in at the present time.
While many of the larger pharmaceutical companies garner most of the headlines, with their potential for bids and takeovers, BTG (LSE: BTG) remains one of the most appealing health care companies listed in the UK. Certainly, its share price performance has been somewhat lacking in recent months, with it being down 6% since the turn of the year. However, this makes it an even more appealing buy at the present time.
For example, BTG trades on a price to earnings growth (PEG) ratio of just 0.5, which indicates that its shares are dirt cheap at the present time. Sure, it needs to deliver on its optimistic sales and profit forecasts, but with such a wide margin of safety it can afford to disappoint somewhat in the short run and still prove to be an excellent long term buy.
While fossil fuel power generation is set to become a thing of the past, coal fired power station, Drax (LSE: DRX), remains a great stock to own. That’s because it is in the process of becoming a predominantly biomass-fuelled power station, with its outgoing Chairman this week stating that the company is delivering an 86% reduction in carbon emissions through the use of biomass rather than coal.
And, while the issue of subsidies may cause investor sentiment to be held back over the short to medium term, Drax offers its investors a wide margin of safety. For example, it has a PEG ratio of just 1.1, which indicates that even though it is enduring a period of significant change, it remains a great value company that has significant upside potential.
Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.
Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.
The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.
But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.
Peter Stephens owns shares of BHP Billiton and Unilever. The Motley Fool UK has recommended BTG. The Motley Fool UK owns shares of Unilever. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.