With just a few more trading days left this year, I wanted to go back over the biggest share price gainers in the S&P/ASX 200 Index (ASX: XJO) (Index: ^AXJO) and see what their prospects are for 2015.
Here are the top five companies according to the price gains over the past twelve months.
#5 Vocus Communications Limited (ASX: VOC) +95%
This telecommunications operator has an internet and data centre network connecting across ANZ, Hong Kong, Singapore and the US. FY 2014 underlying earnings climbed 56% to $13.6 million. Currently, it is making a takeover offer for Amcom Telecommunications Limited (ASX: AMM), which has network infrastructure centred in Perth and has revenues and underlying earnings around $170 million and $23.2 million, respectively.
Expanding networks that link western and eastern Australia as the national broadband network is rolled out is Vocus' goal. If the takeover is successful, earnings are expected to climb.
#4 Northern Star Resources Ltd (ASX: NST) +102%
The gold miner is one of the lowest-cost producers, so with gold prices stabilising, earnings rose in the double digits in FY 2014. Acquisitions also added production volume. Another plus is the low Aussie dollar which gives earnings a boost since gold is sold in US$.
It is starting a $50 million exploration program, which has already uncovered a high-grade discovery at its White Feather project. The company's target is to keep all-in sustaining costs to around $1,050. Higher gold production could keep the share price gains coming into 2015 as long as gold prices hold up.
#3 Qantas Airways Limited (ASX: QAN) +118%
Once down under $1 a share in December 2013, the airline company is flying high at $2.39. It has started its cost cutting and business streamlining program designed to take away about $2 billion in operating costs over three years. Some headway has been made, but the sudden rise in share price starting in late October may be due to the plummeting oil prices. Fuel is a very big expense for the airline and the 40%+ world oil price fall couldn't have come at a better time.
The lower fuel cost gives the company more breathing room as it continues its transformation program. If world oil prices stay low or slip down further, I would expect to see further gains from Qantas.
#2 Sirtex Medical Limited (ASX: SRX) +143%
The company may get a huge boost in orders and sales in the US if its SIR-Spheres liver cancer treatment product is adopted as a first-line cancer therapy treatment. Currently, it is a secondary treatment when patients don't respond well to initial treatments. Should upcoming clinical trial results suggest SIR-Spheres are an appropriate first-line treatment, production is projected to triple.
Investors have been jumping onto the stock well before the trial results are known, so there is an element of speculation, as well as a hefty premium to pay now at a 55 price-earnings multiple. Later investors should be careful about a potential sell-off when the trial results are released.
#1 Liquefied Natural Gas Ltd (ASX: LNG) +741%
This stock's one-year gain would have been even larger had it not sold off about 44% since September. The company is developing an LNG processing facility in Louisiana, USA that could process about 8 million tonnes of LNG. Australian investors and even big US fund managers jumped on this stock when it was at much lower prices. Now it is $2.48.
The recent and severe world oil price slump has caused oil and gas related stocks big and small to be repriced by investors. This could depress the US shale oil market, which is set to begin exporting over the next several years if US government restrictions are lifted. If oil prices make new lows and establish a lower price range, the company could see more downward share price pressure. Completion of the processing facility is forecast around 2018, so a lot could happen between now and then.
