3 stocks with big upside potential in 2015

There are a whole host of reasons to buy a slice of a company at a given time.

For example, its shares may look cheap, it could have upbeat growth prospects, its yield could be superb, or it could be an exciting turnaround play.

Whatever the reason to buy, often the best time (in hindsight) to do it is when the future appears to be rather uncertain, since a greater margin of safety can be on offer.

And, with that being the situation at the present moment, here are three stocks that may be worth adding to your portfolio right now.

CSL Limited

Back when CSL Limited (ASX: CSL) had a P/E ratio in the early 20s, many investors felt that its shares were due a pullback as a result of a rather rich valuation. However, during the course of 2014, its share price has risen by 22% so that CSL now trades on a P/E ratio of 26.8.

Certainly, its shares may not perform as well next year, but the market seems to be happy to continue to increase the company’s rating, particularly at a time when many of Australia’s biggest companies are struggling to post reliable and impressive growth numbers.

So, with CSL having delivered an annualised increase in cash flow and earnings of 11.6% and 10.8% over the last five years, it seems to be worthy of an even higher P/E ratio. That’s especially the case when the pharmaceutical play is forecast to produce earnings that are 36% higher in FY 2016 than they were in FY 2014.

Fortescue Metals Group Limited

Recent weeks have seen Fortescue Metals Group Limited’s (ASX: FMG) share price collapse as the company slashed its capital expenditure and management team in an attempt to reduce its cost curve.

Clearly, there is only so much the company can do to reduce costs but, looking ahead, there could be light at the end of the tunnel. That’s because interest rate cuts in China may spur demand for iron ore over the medium term and, for patient longer-term investors, Fortescue could make sense as a potential value and turnaround play.

Certainly, it is dirt cheap at the moment. For example, its shares trade below net asset value and have a forward yield of 4.1%, which for a company not known as a strong dividend play, indicates that they are very cheap.

As a result (and despite likely volatility in the short run), Fortescue could be worth buying now for the long term.

Transurban Group

While Fortescue’s share price has been hugely volatile of late, investors in Transurban Group (ASX: TCL) have had a relatively steady ride. Its shares have gradually posted impressive gains over the last year and, as a result, now trade on a hugely rich P/E of 41.

Despite this, there is scope for a higher rating since, as with CSL, investors are seemingly willing to pay sky-high prices for relatively consistent and high levels of growth.

So, with Transurban expected to increase its bottom line by 26.7% per annum over the next two years (and the company having posted cash flow and earnings gains of 13.9% and 19.1% respectively per annum over the last ten years), its share price could move higher next year.

That’s especially the case since Transurban still has a partially franked yield of 4.3% to entice income as well as growth investors to buy a slice of it.

While Transurban, Fortescue and CSL could be worth buying at the moment, there is another ASX stock that the analysts at The Motley Fool think could be a much better opportunity.

In fact, it's recently been named as The Motley Fool's Top Stock For 2015 and, as a result, it could make a real difference to your portfolio returns next year. That's because it offers a potent mix of exceptional growth potential and a hugely attractive valuation.

Click here to find out all about it - it's completely free and without any further obligation to do so.

Motley Fool contributor Peter Stephens does not own shares in any of the companies mentioned.

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