2014 has been tough for most Aussie investors, with the ASX being flat for the year.
However, not all stocks have posted such disappointing share price performance year-to-date, with a number of ASX stocks beating the wider index during the course of the year. Here are three examples that could outperform again in 2015.
Telstra Corporation Ltd
Having risen by 7% since the turn of the year, investors in Telstra Corporation Ltd (ASX: TLS) are sitting on a tidy profit for 2014.
However, there could be much more to come next year, as market sentiment seems to be warming to the company’s strategy of expanding into faster growing markets, notably Asia, which Telstra believes can drive the bottom line upward over the medium term.
In addition, with the situation regarding high speed broadband in Australia being very fluid, Telstra has plenty of opportunity to cash in on the National Broadband Network moving forward. This could provide additional growth to go alongside that derived from its dominant position in the domestic mobile market place.
Although shares have performed well in 2014, they still trade on a P/E ratio of 15.7, which means further share price gains could be on offer next year given Telstra’s growth potential.
Ramsay Health Care
Easily beating the ASX (and Telstra) in 2014, though, is Ramsay Health Care Limited (ASX: RHC). Indeed, the private hospital provider has benefited from considerable market uncertainty and has seen its share price rise by 22% year-to-date as a result.
The main appeal of Ramsay is earnings growth. In this respect, it offers a ‘dual appeal’, in so far as it has hugely impressive growth forecasts combined with a highly consistent and stable track record. For example, the company’s bottom line is expected to rise at an annualised rate of over 17% over the next two years, while over the last 10 years it has risen at a rate of 20.9% per annum.
And, if 2015 proves to be yet another uncertain year for the ASX, it would be of little surprise if Ramsay’s share price moved higher as a result of this dual appeal. Shares in the company may trade on a P/E ratio of 29.6, but a PEG ratio of 1.71 still looks highly appealing for such reliable growth prospects.
Scentre Group Ltd
It’s somewhat surprising that Scentre Group Ltd (ASX: SCG) continues to trade at less than net asset value, since it appears to be well placed to deliver yet more share price gains in 2015.
Indeed, the shopping centre operator has seen its share price rise by 12% in 2014 and yet still has a price to book ratio of 0.98. Furthermore, with an ultra-loose monetary policy looking likely to remain in place in 2015, consumer spending should get a lift from low interest rates for a good while longer.
Scentre has also reported 15 consecutive months of increasing retail sales in Australia, meaning momentum appears to be with the stock. Meanwhile, a yield of 5.8% should help to keep demand for its shares buoyant throughout the next year, too.
5 stocks under $5
We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
Motley Fool contributor Peter Stephens does not own shares in any of the companies mentioned.
- Retirement savings: I’d buy cheap stocks after the market crash to retire early – July 11, 2020 8:30am
- Why a second stock market crash of 2020 could be your chance to make a million – July 11, 2020 7:30am
- These are the 3 steps I’d take to build a dividend share portfolio right now – July 10, 2020 7:30pm