Although it can be dangerous for investors to place too much emphasis on a company's track record, it can be a great place to start searching for ideas.
Three of the best S&P/ASX 200 (ASX: XJO) (Index: ^AXJO) companies which investors should have on their watchlists in 2015 are Slater & Gordon Limited (ASX: SGH), Northern Star Resources Ltd (ASX: NST) and SEEK Limited (ASX: SEK).
Slater & Gordon is Australia's leading personal injury law firm, having produced share price gains of around 222% over the past two years. Looking forward, it is rapidly expanding into the UK, a market five times larger than ours, whilst simultaneously moving into 'general legal services' locally. Investors should find a spot for this one on their watchlists.
Whilst Slater & Gordon has been great, gold miner Northern Star Resources has produced spectacular shareholder returns in the past five years, with its share price climbing 12,177% – turning a $1,000 investment into over $121,000 before dividends! Whilst the quantum of its historical growth is unlikely to be emulated in coming years, the company appears likely to extract value for shareholders who are comfortably holding resources stocks.
Finally, despite its share price falling around 4% in the past 12 months, SEEK should be on all investors' watchlists. The near $6 billion company has seen its share price rise from under $6 in 2012 to over $17.30 today. Whilst it is undoubtedly the preeminent channel for recruiters and job seekers here in Australia, its strategic holding in China's Zhaopin and Brasil Online provide fantastic long-term upside.
Should you buy them today?
I think Slater & Gordon offers suitable upside for investors to justify a purchase of stock at current market prices. SEEK, however, is richly priced and if it cannot live up to expectations, it'll likely be heavily sold down. Therefore investors should probably hold off buying until we see some meaningful retreat in share price. Northern Star Resources looks the cheapest of all three companies on conventional metrics but it is a gold miner which is dependent on volatile commodity prices, so it's important to factor this in before committing to a purchase.
