As we move into the new year now is a great time to have a look at your portfolio and see if there are any new shares you could add to supercharge it and give you a prosperous year ahead.
Two such shares you should consider adding to your portfolio in 2016 are ARB Corporation Limited (ASX: ARB) and Caltex Australia Ltd (ASX: CTX).
ARB Corporation Limited
ARB designs, manufactures, distributes and sells high quality four-wheel drive vehicle accessories and light metal engineering works. With distributers based in over 100 countries worldwide the company is positioned well to continue the strong growth it has been showing recently that caused it to gain 40% in 2015.
In the last 10 years the company has grown its earnings by an impressive 11% per annum and is currently forecasted to continue this trend for the next two years at least.
With demand for the company's products remaining healthy all around the world, a strong balance sheet, and long-term growth plans both in Australia and in its export markets, I believe earnings could maintain this level of growth beyond the forecasted two years, making it a great addition to your portfolio in 2016.
Caltex Australia Ltd
Caltex holds a massive 35% market share in Australia meaning it's hard to drive anywhere without driving past a service station run by the company. This gives it a real competitive advantage. Following the market-beating return of 6.80% last year there could be further gains ahead for investors in 2016.
In the industry gross retail margins, the difference between retail prices and published wholesale prices, are at some of their highest levels since the Australian Competition and Consumer Commission (ACCC) began monitoring them in 2002. According to a report released by the ACCC in December the gross retail margin has increased to 11.8 cents per litre.
Revenue has grown by 6.1% per annum in the last five years. Supporting further growth is the upward trend we are seeing in new motor vehicle sales which is shown in the chart below.
Source: Australian Bureau of Statistics
With widening gross retail margins, increasing new motor vehicles sales, and a certain level of omnipresence on our roads, 2016 looks like it will be a prosperous year for Caltex.
