Oil Search Limited
Shares in Oil Search Limited (ASX: OSH) were weaker yesterday as the company released a mixed fourth quarter update. Although production for the full-year tripled, the Papua New Guinea oil and gas producer expects to cut spending next year in the wake of severe oil price declines that are also set to impact on the price of liquefied natural gas (LNG) moving forward.
Of course, Oil Search remains a very appealing investment even though it is scaling back its operations. For example, it continues to offer excellent earnings growth potential, with the company's bottom line being expected to rise by 47.3% per annum over the next two years, with the ExxonMobil operated LNG project in Papua New Guinea set to make a major difference to earnings in the future. As a result, it could act as a catalyst and improve market sentiment in Oil Search, thereby pushing the company's share price higher this year.
Macquarie Group Ltd
Looking back at the last five years, Macquarie Group Ltd (ASX: MQG) hardly stands out as a company with excellent growth prospects. That's because it has managed to only increase its bottom line at an annualised rate of 3.8%, which is not exactly emphatic and has been a reason why the company's share price has underperformed the ASX by 1% during the period.
However, looking ahead, Macquarie is forecast to post earnings growth of 11.7% per annum over the next two years. That's higher than the wider market growth rate but, despite this, Macquarie still trades at a discount valuation to the wider market. For example, it has a price to earnings (P/E) ratio of 14.6, while the ASX has a P/E ratio of 15.2. As a result, Macquarie seems to offer good relative value and could see its share price move higher.
Amcor Limited
With the future for the Aussie economy and ASX looking somewhat uncertain at the present time, defensive stocks could prove to be popular among investors who are looking for a degree of certainty in the short term. That's one reason why shares in Amcor Limited (ASX: AMC) could have a good year, since the packaging company has a beta of 0.9 and this means that its share price should move by 0.9% for every 1% move in the wider index.
In addition, Amcor also offers an impressive track record of growth. For example, it has increased cash flow per share at an annualised rate of 7.2% over the last five years and dividends per share have also been raised at a brisk pace of 8.1% per annum over the same time period. This may provide investors with confidence regarding Amcor's future performance and, as a result, it could be seen as a lower risk stock.
