Over the last month, the ASX has risen by a hugely impressive 3.5%. That's more than it managed in the first nine months of the year and shows that, while volatile, the ASX offers superb capital gains potential over the short, medium and long term.
However, there are a number of stocks that have beaten it over the last month and which could continue to do so. Here are three great examples that could be worth adding to your portfolio right now.
National Australia Bank
Having risen by 5.8% in the last month, investor sentiment in National Australia Bank Ltd. (ASX: NAB) seems to be gaining momentum. Indeed, it could continue to strengthen, since the bank offers superb growth potential, with its bottom line expected to increase at an annualised rate of 17.5% over the next two financial years.
Certainly, share price gains have meant that its P/E ratio has expanded and now sits at a rather rich 16. However, strong growth prospects mean it could be worth a premium and, with a PEG ratio of just 0.91, NAB seems to offer excellent share price appreciation potential.
Although its cost to income ratio and return on equity remain disappointing, new management seem to have the backing of the market to turn things around. As a result, it could beat the ASX moving forward.
Suncorp Group
With its cost-cutting programme in full-swing, Suncorp Group Ltd (ASX: SUN) seems to be gaining favour among investors. Indeed, the diversified banking and insurance stock has seen its share price rise by 4% in the last month. That's a 13% gain for 2014 and, better still, there could be more to come.
That's because despite having a P/E ratio of 20.2, Suncorp's PEG ratio is around 0.5 as a result of its superb growth prospects. Its bottom line is being aided by an efficiency programme that aims to make the bank/insurer leaner, more efficient and more profitable.
Allied to strong growth potential is a fully franked 5.7% yield that should mean investor demand remains buoyant.
AMP Limited
6% gains in the last month have been recorded for AMP Limited (ASX: AMP), with the wealth advisor announcing ambitious plans to take a 19.9% stake in China Life Pension Company for around $240 million.
This deal seems to make sense for AMP, since it provides it with access to a potentially large pool of investors that should grow as China continues its path towards developed status. As a result, AMP's long-term growth prospects appear to be very strong – and worth paying for.
While shares in the company currently trade on a P/E ratio of 17.6, AMP's strong growth prospects mean it has a PEG ratio of just 0.58. As such, it could continue its strong performance and continue to beat the ASX.
