HOW THEY WERE CHOSEN

Bell Direct is an online investing platform backed by stockbroking firm Bell Potter Securities. Our list of the top 50 stocks to watch in 2021 is based on data that is available on the Bell Direct website and provided by Bell Potter. In determining the list, we have focused on companies that attained a buy rating from Bell Potter. These companies are likely to generate a total shareholder return of at least 15% over the next 12 months. It is important to note that the list was compiled mid-December and is based on our recommendations at this time.

We have also screened the list to include companies with a market size of more than $200 million. The list only includes direct Australian equities that can be bought and sold on the ASX and excludes listed products like exchange traded funds, listed investment companies and listed retail trusts.

We have also excluded from the list stocks that are regarded as speculative. The list is ranked based on expected total return, with those stocks that are likely to generate the largest return at the top of the list. Importantly, the content is classed as general investment advice.

Research process

Bell Potter’s team of analysts has comprehensively researched each company on the list. This research often involves meeting the company’s executives and exploring their facilities. The investment analysts assess each company’s financial performance and their forecasts to derive a business valuation. This valuation is usually based on discounted cash flow analysis of the company’s expected future cash flows.

The valuation is then adjusted to factor in the management team’s experience, as well as any external factors that could impact the business. And the valuation can also be adjusted based on the company’s dividend history and policy.

Taking all of this into account, a target price is determined and peer-reviewed before the research report is published.