9 Top Australia Investment Options

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When investors were looking for emerging markets that were still enjoying growth during the massive financial crisis and recession of the west, many overlooked the gem down under that is Australia. The Pacific nation enjoyed growth in every quarter except for one in the past few years, avoiding the technical definition of a recession.

And Australia’s strength isn’t anything new. Thanks to rich natural resources such as mineral deposits and fossil fuels, the Australian economy expanded 3.3% percent over the last year – only slightly below the nation’s average growth rate of 3.54% since 1960, according to the World Bank. By way of comparison, from 1948 until 2010 the United States’ average annual GDP Growth was 3.28% according to the World Bank – so the Aussies are beating us both in the short and the long term.

If you’re looking to diversify your holdings with some great overseas plays, consider Australia. Here are a few top Australian equities and ETFs investors might look into – but make note of the pink sheet stocks that have ultra-low trading volumes. You must always place limit orders when buying thinly traded stocks like these, and perhaps are wise to spread large purchases out over several days to prevent from skewing prices. Though all of these stocks have decent market capitalization, it’s the liquidity and volume you need to be aware of.

Amcor Limited (AMCRY)

Market Cap: $7.8 billion

Avg. Volume: 9,000 shares

Amcor Limited (PINK: AMCOR) is an Australian packaging company that operates in Australia and New Zealand, as well elsewhere in the globe.  In February, Amcor acquired Alcan Packaging global Pharmaceuticals, global Tobacco, Food Europe and Food Asia divisions. 2010 has been kind to Amcor, as the stock has gained nearly +15% year-to-date, compared to the broader markets which have remained even. Likewise, over the past 12 months, the stock has climbed an impressive +29.5%.

Australia and New Zealand Bank (ANZBY)

Market Cap: $57 billion

Avg. Volume: 36,000 shares

Australia and New Zealand Bank (PINK: ANZBY) provides various banking and financial products and services to its retail, small business, corporate and institutional clients.  Last September, the company reported having 1,352 branches globally. In March, ANZBY purchased the Royal Bank of Scotland’s (NYSE: RBS) retail and commercial business in Hong Kong.  Since January, ANZBY’s stock has jumped +10.2%, and it has climbed 17.4% in the last year.  Experts are predicting a sales growth of +27.2% for the year, and the company reported an impressive net profit margin on +26.7% last quarter.

BHP Billiton Limited (BHP)

Market Cap: $203.6 billion

Avg. Volume: 3.5 million shares

Based in Melbourne, BHP Billiton Limited (NYSE: BHP) is a diversified natural resource company and a large-cap mining giant. BHP extracts and processes minerals, oil and gas from its operations areas in Australia, North America, South America and southern Africa. While BHP’s stock has slipped slightly in 2010, down -4.5%, it is still up +9.4% over the past 12 months – almost parity to the Dow Jones. In its last income statement, BHP announces a quarterly revenue growth of +38.9% year-over-year.  A quarterly earnings growth of +102.1% also has company officials pleased, and if successful the company’s bid for Potash Corp. (NYSE: POT) could prove very profitable.

National Australia Bank Ltd. (NABZY)

Market Cap: $50.4 billion

Avg. Volume: 35,000 shares

National Australia Bank Ltd. (PINK: NABZY) is engaged in a range of financial services, including banking services, credit and access card facilities, leasing, housing, international banking and investment banking, among others.  As its name would suggest, the company is based in Melbourne, Australia. Since January, the stock has remained close to even, posting a loss of just -.9%.  Shareholders are also displeased with a quarterly revenue growth of -8.6% year-over year.  Peaking at $29.45 in 2010, NABZY currently trades at $24.30.

Santos Limited (SSLTY)

Market Cap: $10.1 billion

Avg. Volume: 3,000 shares

Santos Limited (PINK: SSLTY) is involved with the exploration, development, production, transportation and marketing of hydrocarbons in Australia. Since last September, the stock has been anything but stellar, posting losses of -9.6%.  However, Santos has regained some of those losses since January, and is down only -3.6% year-to-date. Despite the down stock price, Santos reported a quarterly earnings growth of +94.1% year-over-year, along with a quarterly revenue growth of +6.5%.  It’s net profit margin of +17.5%, proves this stock is not completely broken, but isn’t a strong buy either.

Telstra Corporation Limited (TLSYY)

Market Cap: $32.6 billion

Avg. Volume: 101,000 shares

Telstra Corporation Limited (PINK: TLSYY) provides telecommunications and information services to domestic and international customers. Telstra’s stock has fallen -14.4% slide since January.  Its last financial statement reported a quarterly revenue growth of -1.7% and a quarterly earnings growth of -5.9%. With a stock price of $13.09, Telstra is trading slightly higher than its 52-week low of $11.50 and could be a good value play if you’re banking on long-term telecom growth in the region.

Westpac Banking Corporation (WBK)

Market Cap: $65.6 billion

Avg. Volume: 15,000 shares

Westpac Banking Corp. (NYSE: WBK) provides various banking and financial services, including retail, business and institutional banking, along with wealth management services.  Located in Sydney, Westpac merged with St. George Bank Ltd in 2008.  While the stock may be down year-to-date, -2.4%, Westpac is still up over the past 12 months, with a +6.1% increase.  Westpac may be an expensive stock at $110.27 per share, but it has posted impressive numbers recently. Its last income statement noted a quarterly revenue growth of 17.9% and a quarterly earnings growth of +32.2%

iShares Australia ETF (EWA)

As the name implies, the iShares Australia ETF (NYSE: EWA) is an exchange traded fund purely focused in Australia. It’s a good way for smaller investors to play the region but stay diversified, since it owns a position in many of the stocks named already here. The top 5 holdings for EWA include BHP Billiton Limited (NYSE: BHP) at 14.2% of holdings, Commonwealth Bank of Australia (PINK: CMWAY) at 8.8%, Westpac Banking Corporation (NYSE: WBK) at 7.4%, Australia and New Zealand Bank (ANZBY) at 6.5% and National Australia Bank Ltd. (PINK: NABZY) at 5.6%. Year-to-date, the EWA ETF is up about 2%.

IndexIQ Australia Small Cap ETF (KROO)

If you want a little more aggressive Australia play, check out the IndexIQ Australia Small Cap ETF (NYSE: KROO). Unlike the iShares ETF, you won’t find any of this stock’s top holdings listed on U.S. exchanges as pink sheets. These are small up-and-comers and purely Aussie plays. KROO top holdings now include Bendigo and Adelaide Bank (ASX: BEN) at 3.1%, CSR Limited (ASX: CSR) at 2.5% and David Jones Limited (ASX: DJS) at 2.4%. All of these Australian-listed stocks have a market cap between $2.5 billion and $3.5 billion, making them smaller and more agile companies but also a little more volatile and risky. The KROO ETF launched just several months ago, but from its debut in March it is up about +2.5% while the Dow Jones is off about -2.5%.

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Article printed from InvestorPlace Media, https://investorplace.com/2010/09/australia-stocks-investment-etf/.

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