While certain sectors tend to offer better growth prospects than others, the truth is that any sector can include stocks with stunning growth potential. Certainly, it may not seem that way at the moment, with the mining and energy sectors apparently offering little in the way of growth, but there are always a number of superb opportunities even when the outlook for the Aussie economy and the ASX is somewhat uncertain.
With that in mind, here are three stocks from different sectors that all have a couple of things in common: they share bright futures and, while they may not be dirt cheap at the present time, they seem to offer good value for money based on their long-term potential.
Oil Search Limited
Although the oil price has spiked recently to around $60 per barrel, shares in Oil Search Limited (ASX: OSH) are still down 1% since the turn of the year. However, Oil Search has a much brighter outlook than many of its peers, with its Papua New Guinea liquefied natural gas (LNG) project set to increase the company's top and bottom lines even though a lower oil price is hurting the return on the 26m-28m barrels of oil equivalent that the company is forecast to produce this year.
In fact, Oil Search's net profit is set to rise by 12.4% per annum during the next two years and, while it has a price to earnings (P/E) ratio of 24.5, its price to earnings growth (PEG) ratio of 1.98 compares favourably to the ASX's PEG ratio of 2.30.
Amcor Limited
On the face of it, packaging company Amcor Limited (ASX: AMC) does not appear to be an appealing growth stock. After all, it is expected to see its bottom line fall by 11.4% in the current year before rising by just 4.5% next year. However, Amcor offers huge long-term potential due to its increasing exposure to fast-growing markets across the developing world, which could boost investor sentiment at a time when the Aussie economy is enduring a challenging period.
Furthermore, Amcor has an excellent track record of profit growth. For example, its earnings have grown by 8.4% per annum during the last ten years and, with a beta of 0.9, it remains a relatively defensive stock that could offer reduced volatility over the short to medium term. In addition, Amcor's price to sales (P/S) ratio of 1.53, compares favourably to the 1.61 of the ASX.
Cochlear Limited
Clearly, the last five years have been disappointing for hearing device company, Cochlear Limited (ASX: COH). That's because it has posted an annualised fall in its bottom line of 6.8%, with its shares rising by just 8% during the period, which compares unfavourably to the ASX at 17% during the same time period.
Looking ahead, though, Cochlear is expected to post annualised growth in earnings of 38.9% during the next two years and, while it has a P/E ratio of 30.2, its PEG ratio of just 0.78 indicates that exceptional growth is on offer for a reasonable price. Furthermore, with a beta of 0.5, Cochlear also has defensive value and growth appeal.
