Although the ASX is once again at six-year highs, having recovered from its 'winter dip', there are still a number of stocks out there that offer growth at a reasonable price. Indeed, they may not trade on super-cheap valuations but, when their strong growth prospects are taken into account, they seem to offer good value and could make a positive contribution to your portfolio. Here are three such examples.
Nufarm Limited
2014 has been disappointing thus far for investors in Nufarm Limited (ASX: NUF), with the crop protection company seeing its share price rise by 2%, which is less than the 5% gains of the ASX. However, the future could be a lot different for Nufarm and its investors. That's because the company is forecast to grow earnings by 25% over the next two years, which is very impressive and could be the catalyst for share price increases. However, Nufarm isn't priced for growth, since its P/E ratio is just 13.9, which is less than the ASX's 16.3, and means that shares in the company trade on a PEG ratio of just 0.6. Growth at a reasonable price indeed.
Boral Limited
Unlike Nufarm, shares in building materials company Boral Limited (ASX: BLD) have performed well in 2014, being up 11% year-to-date. However, they could have further to run, since the company is forecast to deliver strong growth numbers over the next two years. The company's bottom line is all set to rise by 40.3% over the next two-year period, which makes a P/E of 26.4 look reasonable given the potential growth of earnings per share. Indeed, Boral trades on a PEG of just 0.7, which is well below the ASX's PEG of 2.2, and provides evidence that investors can buy growth at a reasonable price.
Cochlear Limited
Meanwhile, shares in Cochlear Limited (ASX: COH) have gained 18% during the course of 2014, easily beating the ASX. At first glance, they may appear to be hugely expensive, since they trade on a P/E ratio of 39.2. That's an incredible 140% higher than the ASX's P/E of 16.3.
However, where Cochlear has potential is with regard to its growth prospects, with the company forecast to increase its bottom line by 35.8% over the next two years. This means that Cochlear could have more upside potential, since its PEG ratio is a very appealing 1.1. Cochlear could prove to be a sound investment at current price levels.
