3 Sexy Growth Stocks For 2015: ARM Holdings plc, Barclays PLC And easyJet plc

These 3 stocks could be top performers next year: ARM Holdings plc (LON: ARM), Barclays PLC (LON: BARC) and easyJet plc (LON: EZJ)

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

ARM

Although ARM’s (LSE: ARM) (NASDAQ: ARMH.US) forecast earnings growth rate is perhaps not quite as impressive as it once was, it remains a hugely appealing growth play nonetheless. That’s because the Cambridge-based technology company is expected to increase its bottom line by 13% in the current year, and by a further 23% next year.

That’s around four times the anticipated growth rate of the wider index next year and, as a result, ARM trades on a rather heady price to earnings (P/E) ratio of around 40. While high, ARM’s P/E ratio has been higher and, when combined with the company’s growth forecasts, it equates to a price to earnings growth (PEG) ratio of 1.4.

This indicates that growth is on offer at a reasonable price (especially when the FTSE 100 has a PEG ratio of around 2.5) and means that ARM could be a strong performer next year.

Should you invest £1,000 in Barclays right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Barclays made the list?

See the 6 stocks

Barclays

Also forecast to post stunning earnings numbers next year is Barclays (LSE: BARC) (NYSE: BCS.US). While a number of its peers are struggling to deliver meaningful bottom line rises, Barclays is expected to have earnings that are 21% up on last year when it reports its 2014 annual results. Furthermore, it is set to follow this up with even better growth of 29% next year, which shows that Barclays is an enticing growth stock for the medium term.

In addition, with Barclays trading on a PEG ratio of around 0.5, it seems to offer such excellent growth prospects at a very reasonable price. As a result, it could prove to be a superb buy at the moment, with 2015 looking all set to be a great year for investors in the bank.

easyJet

Although the falling price of oil has hurt a vast number of companies, those in the travel sector have benefitted hugely. Partly as a result of this, shares in easyJet (LSE: EZJ) have outperformed the wider index in 2014 and, looking ahead, they could do the same next year.

Certainly, the oil price looks set to remain at relative lows for the foreseeable future and this should help to boost easyJet’s bottom line moving forward. For example, it is forecast to increase earnings per share by 11% next year and, with shares in the company trading at a discount to the wider index, they seem to offer excellent value for money as well as compelling growth prospects.

In addition, with easyJet yielding over 3% and having a payout ratio of just 40%, there seems to be significant scope for dividend increases over the medium term. This could raise the appeal of the company and offer an extra boost to its share price in 2015.

Like buying £1 for 31p

This seems ridiculous, but we almost never see shares looking this cheap. Yet this Share Advisor pick has a price/book ratio of 0.31. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 31p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 10%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares of Barclays. The Motley Fool UK has recommended ARM Holdings. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

Here’s the Tesco share price forecast for the next 12 months!

Tesco's valuation has dropped to multi-year lows after recent share price weakness. Is now the time to consider buying the…

Read more »

Illustration of flames over a black background
Investing Articles

Just released: March’s higher-risk, high-reward stock recommendation [PREMIUM PICKS]

Fire ideas will tend to be more adventurous and are designed for investors who can stomach a bit more volatility.

Read more »

Investing Articles

I asked ChatGPT for the best FTSE 100 investment trust to buy… here’s what it said

There aren't many FTSE 100-listed investment trusts and according to ChatGPT there’s only one winner. Dr James Fox explores.

Read more »

Investing Articles

How much should investors put in an ISA to achieve the average UK wage in passive income?

Millions of Britons use the Stocks and Shares ISA as a vehicle to build wealth, but a successful investor can…

Read more »

Investing Articles

2 cheap FTSE dividend stocks to consider buying for an ISA

The deadline for using up the Stocks and Shares ISA allowance is almost upon us. Paul Summers has spotted two…

Read more »

Investing Articles

£20k in a Stocks and Shares ISA? Here’s how an investor could target £1,342 in passive income each month

Christopher Ruane explains how a long-term approach to investing a Stocks and Shares ISA could generate a four-figure monthly income.

Read more »

Shot of an young Indian businesswoman sitting alone in the office at night and using a digital tablet
Investing Articles

Millions are missing out on ISA account benefits! Here’s what I’m doing now

Swathes of people are missing the chance to supercharge their returns with a Stocks and Shares or Lifetime ISA account.…

Read more »

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Investing Articles

Here’s my plan to survive and thrive in a stock market correction

A falling stock market can be an opportunity, but investors need a plan. Stephen Wright shares his strategy for taking…

Read more »