Looking into the next six months, there are a number of stocks that have performed exceptionally well in 2014 and could carry through into 2015 if certain growth catalysts continue.
Below are three in particular that have sparked great interest from investors, yet how will they deliver above average share price gains and expected earnings growth over the next year? One is a definite buy for me while the other two have some conditions.
M2 Group Ltd (ASX: MTU), the company which operates Dodo Australia, iPrimus and Commander, covers broadband, mobile, utilities payments, and communications for small and medium-sized businesses. It hit all-time highs in November as it integrates its most recent acquisitions into the business. Earnings growth is forecast to slow down after the same acquisitions boosted revenue and net profit. Will organic growth be enough with competitors like TPG Telecom Ltd (ASX: TPM) expanding its network infrastructure and becoming both a wholesale and retail NBN service provider?
Specialised liver cancer treatment producer Sirtex Medical Limited (ASX: SRX) pulled back sharply from a $29.49 high down to $23.41 last week, but recovered to $27.64 on Friday. Still at a massive 57 price-earnings ratio, investors are anxiously awaiting clinical trial results that may suggest the company’s treatment product, SIR-Spheres, become a first-line treatment for liver cancer that patients receive at initial stages. This could boost production and revenue greatly. The stock is up five times since early 2012 and at such a lofty price multiple now, investors should be wary of a quick sell-off. Better price entry points may appear as we go into 2015, so watch this one, but hold off on starting a position.
In the same healthcare sector, CSL Limited (ASX: CSL) has seen its blood-related medical products grow in demand, especially in China. New production facilities are being developed to meet this demand. Also, a recent acquisition will make the company the second largest influenza vaccine producer in the world. It hit a new high in early December and has pulled back slightly to around $86.36, up 34% in four months. It may pull back further, but this is one stock you should have in your long-term portfolio as it takes a bigger position on the world stage. Specialised products in high demand spell healthy margins and reliable growth in the near future.