Fortescue Metals Group Limited
Although shares in Fortescue Metals Group Limited (ASX: FMG) have had a disappointing number of months due to a falling iron ore price, being a long-term shareholder in the company has still been a worthwhile experience. That's because Fortescue has delivered an annualised total return of 19.8% during the last 10 years, which is very impressive.
And, while in the short run its share price could come under further pressure, it seems to offer good value at the present time. For example, it trades on a forward price to earnings (P/E) ratio of just 13.7, which takes into account next year's forecast fall in earnings. As such, it could be due an upward rerating and make for a sound long-term buy.
Scentre Group Ltd
For most investors, a mixture of great growth prospects and a reasonable valuation is difficult to find. After all, most stocks that offer upbeat growth prospects tend to be priced fairly highly.
However, Scentre Group Ltd (ASX: SCG) seems to offer strong growth potential at a reasonable price relative to the ASX and also to the wider real estate sector. That's because Scentre has a price to earnings growth (PEG) ratio of 1.91 which, while the ASX has a PEG ratio of 2.24 and the real estate sector has a PEG ratio of 2.95, indicates that it could deliver impressive relative performance moving forward.
And, with Scentre having delivered a total shareholder return of 24.8% per annum over the last three years, it has a great track record that looks set to continue.
Amcor Limited
Although investor sentiment has picked up this year as the interest rate cut brings the promise of improved economic performance, the Aussie economy may take longer than expected to come through its current challenges. After all, low commodity prices look set to stay and, with there being a time lag on interest rate cuts, 2015 could still turn out to be a tough year.
So, the relative stability offered by Amcor Limited (ASX: AMC) could see its shares become more in-demand during the course of the year. For example, Amcor has increased cash flow per share at an annualised rate of 7.2% during the last year, which provides evidence of its stability, while its price to sales (P/S) ratio of 1.62 versus 2.51 for the materials sector highlights its strong relative value. As such it could be a strong performer this year.
Of course, finding the best stocks for the long term is a tough task – especially when work and other commitments limit the amount of time you can spend trawling through the index for them.
