With interest rates being just 2.5%, many investors have understandably been focused on dividends and the prospects for generating a higher income than cash savings.
However, this has meant that a number of high quality ASX stocks that have strong growth prospects over the next year are arguably not as popular as they perhaps should be. In other words, bargains could be on offer with regard to growth stocks.
Indeed, here are three stocks that, despite having excellent growth potential for 2015, are still trading at very attractive share prices.
BHP Billiton Limited
While profit at BHP Billiton Limited (ASX: BHP) is due to fall by 15.8% in the current year, with the falling price of commodities hitting the company's bottom line hard, next year is set to see a vast improvement.
Indeed, with BHP mothballing several projects (for example, there have been no new iron ore projects since 2011 according to the company's recent AGM), cutting costs and becoming much leaner, the company's bottom line is due to rise by 9.6% next year. However, the market doesn't seem to be pricing in this potential rebound in profitability, and so BHP trades on a P/E ratio of just 12.6 at the present time. That's far lower than the ASX's P/E ratio of 15.1 and means that there is scope for share price gains moving forward.
Furthermore, with a fully franked yield of 4.3%, BHP still has appeal as an income stock, too. As a result, it could deliver compelling share price growth in 2015.
Macquarie Group
Macquarie Group Ltd (ASX: MQG) has delivered strong share price gains in 2014, with the investment bank and fund manager seeing its share price rise by 6% (versus a fall of 1% for the ASX) during the course of the year.
Of course, Macquarie benefits most from bull markets and, even though the ASX has seen a lacklustre 2014, it remains at a moderately high level by historical standards. As such, Macquarie's income has been given a boost and this means that it is on-track to grow its bottom line at an annualised rate of 10% over the next two years.
Certainly, an ASX pullback could hit Macquarie hard (it has a beta of 1.11, for example), but the market seems to be pricing in such a prospect since shares in the company have a PEG ratio of just 1.46. As such, there seems to be share price growth potential on offer – especially if the ASX has a better year in 2015 than it has in 2014.
Santos Ltd
The market also seems to be failing to price in the prospects of oil and gas producer, Santos Ltd (ASX: STO), with its shares falling to their lowest levels since April 2013 on the back of an oil price that is down by more than a quarter during 2014.
This, though, could mean a great opportunity exists to buy shares in the company at a relatively low price, since Santos has huge potential when it comes to LNG production. Indeed, the company is expected to increase earnings at an annualised rate of 25.1% over the next two years as it ramps up LNG output.
These improved prospects, though, do not seem to be priced in to the company's current share price, since Santos trades on a PEG ratio of just 0.83. Therefore, now could be a great time to buy in to the Santos growth story, with share price gains on the cards for 2015 and beyond.
