With the end of financial year fast approaching investors are preparing themselves for an onslaught of bad news and weak earnings reports. The retail sector has taken centre stage over the past week with a multitude of retailers including Reject Shop Ltd (ASX: TRS) announcing downgrades.
The news from the resources sector and mining services stocks is unlikely to fare any better either, with investors having already substantially downgraded their expectations for commodity-exposed companies. In fact, across the board, market pundits are expecting a lacklustre upcoming reporting season, however amongst the rubble there will be some gems.
More importantly, there are some gems which not only have strong historic earnings growth, but that continue to have great future prospects. The following four companies should grow earnings significantly in coming years, making them worthy contenders for addition to a long-term growth portfolio.
Slater & Gordon Limited (ASX: SGH) has provided shareholders with a total shareholder return (TSR) of 26.7% over the past five years. With analyst consensus estimates (provided by Morningstar) suggesting double digit earnings growth over the next two years and the stock trading on a reasonable price-to-earnings ratio (PE) of 17.3, it looks an enticing long-term bet.
Ainsworth Game Technology Limited (ASX: AGI) has provided an outstanding TSR of 124% to its shareholders over the past five years and with strong earnings growth forecast over the next two years, coupled with a 17.7 PE multiple, this gaming company looks like an appealing contender for a growth portfolio.
Ardent Leisure Group (ASX: AAD) has also produced exceptional TSR of 23.1% over the last half decade. A defensive asset base, a PE of 18.8 and forecast earnings and dividend growth make Ardent another worthy stock to consider.
Amcom Telecommunications Limited (ASX: AMM) boasts a TSR of 49.4% for the past five years and forecast earnings growth of around 15% and 20% respectively for the next two years. Given the long-term outlook for telecommunications is good, the PE of 21.6 doesn’t appear excessive.