2015 is the year of the goat in the Chinese zodiac, which can also mean a sheep by the Chinese character. It's supposed to be a year calmer in nature after 2014, the year of the horse.
But I know the most favourite year among investors is the year of the bull – bull market that is. This new year is starting out with a few headwinds, some left over from 2014. The commodities markets are all pretty much dragging along the bottom and retail trade hasn't shown much improvement.
The solution? Sidestep the problems – follow companies with no direct connections to either headwind and be ready to run with the bulls…not the sheep.
One tried and true fast grower REA Group Limited (ASX: REA) may be in the chute and ready to go this year. In 2014, it acquired US-based Move, Inc in a joint venture deal with media big name News Corp (NASDAQ: NWS). Move, Inc. is the third largest property search website operator. This year we will start to see the first moves REA Group makes in the big US real estate property advertising and search market.
CitiGroup initiated analyst coverage of REA Group in January, showing the acquisition is bringing the operator of realestate.com.au to the attention of more US investors. If REA Group can set a good pace for business in 2015 in the US, I believe the stock is ready to run. Already the consensus earnings forecast is for about 27% annual growth over the next two years, which is a regular pace in line with its past track record.
McMillan Shakespeare Limited (ASX: MMS) is another that could finally take off after a relatively flat year of consolidation. In July 2013 the stock was mauled due to a potential fall in business brought on by proposed changes in fringe benefit tax calculations for people with salary packaging and vehicle leasing agreements.
The legislative changes didn't occur, but the damage was done. The company quietly spent 2014 restoring investor confidence and building up the business. McMillan Shakespeare regularly has solid profit margins and performance indicators like return on equity are in the mid to high-teens, so the company can bounce back. I believe 2015 could be the year for bullish movement.
