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Should you buy Veda Group Ltd in 2015?

Since listing on the Australian Securities Exchange in December 2013, Veda Group Ltd (ASX: VED) has delivered excellent returns to shareholders, rising just over 31% in that time. That compares to a 2.6% rise from the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO), and the good times could certainly continue into the New Year.

Veda Group is a data analytics business which enjoys a monopolistic position in the Australian market. It provides data to its customers related to people’s and business’ credit histories, allowing them to carefully select which clients to extend credit to. With interest rates remaining low, credit growth should continue to expand which makes the services that Veda Group provides more important than ever before (particularly in the aftermath of the Global Financial Crisis).

The company should also benefit from the Comprehensive Credit Reporting regime introduced earlier this year. The regime will enhance Veda’s product offering by allowing it to collect and sell more in-depth credit history analysis which could result in explosive returns in the long-run.

Importantly, Veda has also proven its resilience across economic cycles, having developed a strong track record for revenue and earnings growth which makes the stock seem like a much safer investment. The company provided a chart of its revenue growth in an Investor Presentation in August this year:

veda

Source: Veda Group FY14 Investor Presentation

Of course, past results should never be relied upon for future returns, but they can certainly be an indication of a company’s strength and consistency.

At $2.29, Veda Group’s shares are no screaming bargain but it’s a  justifiable price to pay for a high quality company with such strong earnings growth potential. As such, Veda Group certainly seems capable of delivering market-beating returns in 2015 and in the ensuing years.

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Motley Fool contributor Ryan Newman owns shares in Veda Group Ltd. You can follow Ryan on Twitter @ASXvalueinvest.

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