2014 has been a very mixed year for ASX stocks. Indeed, with the declining price of commodities such as iron ore and oil, many of our top resource plays have endured a challenging year.
However, there have been a number of winners, too. In fact, here are three stocks that have all comfortably outperformed the ASX during the course of 2014 and, perhaps more importantly, have the potential to continue to do so in 2015, too.
Suncorp Group Ltd
Despite having a challenging start to the year, shares in Suncorp Group Ltd (ASX: SUN) have easily beaten the ASX year-to-date, being up 11% versus a 1% gain for the ASX.
This strong performance could continue in 2015, since Suncorp is in the midst of a process to simplify its business model and reduce its cost base. This should help to propel the company to a bottom line that is far healthier in the current year than it was last year, with earnings per share due to be $1.04 versus $0.57 last year.
With an improved bottom line, Suncorp should be able to maintain dividends close to their current level over the medium term. And, with shares in the diversified financial play yielding a fully franked 5.8%, high demand for them could continue through 2015. This could be amplified if the RBA maintains its ultra-loose monetary policy, which makes high yielding shares seem all the more attractive.
Having made new record highs in 2013 and 2014, shares in Amcor Limited (ASX: AMC) are enjoying something of a purple patch. After all, they are up a whopping 115% in the last five years and have outperformed the ASX by 12% during the course of 2014.
In terms of the company’s future, it has major plans to expand into emerging markets, but also to improve on its margins. Certainly, profit in the near term is set to disappoint, with the company’s bottom line expected to fall by 7.5% in each of the next two years.
However, looking further ahead highlights the significant potential that is on offer at Amcor, with the global packaging industry having the scope to benefit from an increasing population and the development of emerging markets. As such, with a P/E ratio of 16.3 and a yield of 3.7% (unfranked), Amcor could make new all-time highs in 2015, too.
Ramsay Health Care Limited
With all the uncertainty and turbulence that has been a feature of investing in 2014, it’s perhaps of little surprise that the country’s largest private hospital operator, Ramsay Health Care Limited (ASX: RHC) has benefitted hugely. Indeed, its shares have risen by 21% in 2014 and could be due for more of the same next year.
That’s because Ramsay seems to have the perfect mix of growth potential and stability through which to maintain high demand for its stock. For example, the company is expected to increase its bottom line by 17.3% in each of the next two years, with the demographic tailwind of an ageing population making its longer term future appear more enticing, too.
While shares in the company trade on a P/E ratio of 29.6, their rating could move higher. This would be especially true if the ASX had another lacklustre and uncertain year in 2015, with investors seeking out relatively reliable and consistent stocks such as Ramsay as a result.
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*Extreme Opportunities returns as of June 5th 2020
Motley Fool contributor Peter Stephens does not own shares in any of the companies mentioned.
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