Owning shares in AMP Limited (ASX: AMP) has proven to be a worthwhile endeavour in recent years, with the wealth management company delivering total shareholder returns of 21.7% per annum during the last three years.
Looking ahead, it could continue to offer excellent capital gains, since it is forecast to post exceptional earnings growth numbers which more than make up for a premium valuation. For example, AMP has a price to earnings (P/E) ratio of 18.4 but, despite this, its price to earnings growth (PEG) ratio still comes in at just 0.59.
Therefore, with its share price currently indicating that growth is on offer at a reasonable price, AMP could be worth buying at the present time. And, with a beta of 1.62, its shares could beat an ASX that looks set to benefit from further cuts in the interest rate throughout the course of the year.
With its share price having rebounded following a mixed set of results in recent weeks, now could be a great time to buy a slice of CSL Limited (ASX: CSL). Certainly, its bottom line growth rate has been scaled back somewhat, but it still offers double-digit growth potential in the long run, which remains very impressive and relatively rare among major ASX stocks.
Furthermore, CSL could prove to be a good value stock at the present time since, although it trades on a relatively high rating, its growth potential may help to improve investor sentiment and push its share price higher.
For example CSL trades on a P/E ratio of 25.1 but, with its bottom line forecast to rise by 21.1% per annum over the next two years, it still seems to make sense as an investment. Given the recent dip in its share price, this could be the perfect time to buy it for its long term and relatively defensive growth prospects.
Oil Search Limited
Looking back at the earnings track record of Oil Search Limited (ASX: OSH) over the last five years is unlikely to convince potential investors that it is worth buying a slice of the company. That’s because it has declined at an annualised rate of 10.8% during the period, which is clearly a disappointing result.
However, in the last year Oil Search’s profit has risen by a whopping 54.9% and, in the next two years, it is expected to increase by around 58.4% per annum as its exposure to liquefied natural gas (LNG) starts to make a real impact on its income statement.
In addition to offering stunning growth prospects, Oil Search remains a relatively good value stock. For example, its price to book (P/B) ratio of 2.93 may seem somewhat high at first glance but, when you consider its growth prospects relative to the majority of its index peers, it seems to be worth a premium to the ASX’s P/B ratio of 1.29. As a result, it could be worth buying at the present time.
Where to invest $1,000 right now
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Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
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Motley Fool contributor Peter Stephens does not own shares in any of the companies mentioned.
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