Overall, the ASX has made a good start to the year. After all, it has risen by 4.5% in less than five months which, when you consider the degree of uncertainty surrounding the future performance of the Aussie economy, is a decent result.
Certainly, it could be argued that stocks should rise by a greater amount following two interest rate cuts that have sent the interest rate to just 2%. However, unemployment remains stubbornly high, there is a risk of a housing bubble, iron ore prices have sunk further, and the Chinese economy continues to experience a soft landing. As such, an annualised growth rate of around 14% (which the ASX remains on target to achieve if it mirrors its performance in the first four months throughout the rest of the year) would be a positive result.
And, to help the ASX move to higher highs during the remainder of 2015 and beyond, here are three stocks that offer excellent growth prospects and which trade at appealing prices.
Ramsay Health Care Limited
A major benefit of investing in Ramsay Health Care Limited (ASX: RHC) is that it provides a relatively high degree of regional diversification. For example, it is the major private hospital operator in Australia and also has significant operations in Europe, as well as a recently announced joint venture in China. This means that its growth profile is well balanced and is less likely to be hurt by weakness in one region of the global economy.
Furthermore, Ramsay has an excellent track record of growth, with it having increased its bottom line at an annualised rate of 17.2% during the last five years. And, looking ahead, it is forecast to grow net profit by 19.7% per annum in the next two years, which puts it on a highly appealing price to earnings growth (PEG) ratio of 1.59.
Transurban Group
It may be surprising to class Transurban Group (ASX: TCL) as a growth stock. After all, the operation of toll roads and tunnels is perhaps viewed by many investors as a quasi-utility rather than a high-growth area. However, Transurban has increased its earnings by 19.1% per annum over the last ten years and, looking ahead, is expected to up this rate of growth over the next two years, with annualised growth of 29.4% being forecast.
Despite such a bright growth profile, Transurban trades on a PEG ratio of just 1.28, which is less than the ASX's PEG ratio of 2.31. And, with a yield of 3.7%, Transurban also offers a great income to go alongside its value and growth appeal.
Domino's Pizza Enterprises Ltd.
With Domino's Pizza Enterprises Ltd. (ASX: DMP) seeking to double its store footprint in Japan, it could benefit from lower interest rates and a subsequently weaker Aussie dollar. And, looking ahead, it has superb growth prospects, with the fast food company forecast to increase its bottom line from $0.54 per share last year to $0.89 in financial year 2016, which is a rise of 65% in just two years.
Of course, this rate of growth is hardly a major surprise, since Domino's has seen its profitability increase at an annualised rate of 16.8% during the last ten years. And, with Domino's continuing to refine its offering in terms of new menu items and a reported GPS tracking service for its home deliveries, its PEG ratio of 1.96 still looks appealing compared to the ASX's PEG ratio of 2.31.
Clearly, finding the best stocks for the long term is a tough ask – especially when work and other commitments limit the amount of time you can spend trawling through the index for them.
