3 Stocks Set To Deliver Exceptional Growth In 2015: Prudential plc, Glencore PLC And Meggitt plc

Royston Wild explains why growth is set for take-off at Prudential plc (LON: PRU), Glencore PLC (LON: GLEN) and Meggitt plc (LON: MGGT)

| 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.

Today I am highlighting three FTSE 100 superstars primed for stunning earnings growth in 2015.

Prudential

Life insurance giant Prudential (LSE: PRU) (NYSE: PUK.US) is a terrific growth pick for next year and beyond, in my opinion. Not only does the company’s global span giving it tremendous exposure to the economic recovery in the US and UK, as well as the hot growth markets of Asia, but Prudential’s aggressive acquisition programme promises to give earnings a further shot in the arm.

‘The Pru’ has been a consistent deliver of growth for many years now, and has punched earnings expansion of 17.6% during the past five periods. And even though poor investor appetite earlier this year is expected to see earnings growth slow to just 7% in 2014, to 97.3p per share, a solid 13% increase is anticipated for 2015 amid improving market sentiment, to 110.1p.

And I believe these projections makes Prudential excellent value for money. A P/E multiple of 16.1 times prospective earnings for 2014 falls to 14.2 times for next year, below the benchmark of 15 times which represents decent value for money.

And next year’s growth also creates a price to earnings to growth (PEG) readout of 1.1 — any value around or below 1 is widely considered too good to pass up.

Glencore

With significant asset-shedding and cost-cutting ratcheting through the gears, the earnings outlook at Glencore (LSE: GLEN) continues to improve markedly.

Indeed, Glencore is expected to experience a seachange in its earnings profile from 2014, snapping back from two years of heavy, double-digit dips with a fractional improvement to 33.2 US cents per share. And growth is expected to rocket 32% higher to 43.9 cents next year as restructuring work continues.

Consequently a P/E multiple of 15.4 times for this year collapses to just 11.6 times for 2015, while a PEG rating of 0.4 further illustrates the excellent value on offer.

Of course investors run the risk that further weakness across Glencore’s key commodity markets could put paid to these spritely projections.

But it could be argued that these perils are already baked into the price, particularly for 2015. Meanwhile signs of mothballed mining capacity across the globe — allied with the potential for further heavy stimulus from commodities glutton China — also bodes well for earnings next year.

Meggitt

Weapons builder Meggitt (LSE: MGGT) is in terrific shape to benefit from recovering economic growth in the West. The business is a major supplier to the UK and US militaries, and I expect an environment of growing geopolitical conflict — from the threat of ISIS in Iraq and Syria, through to China’s armed expansion — to keep sales ticking resolutely higher.

The company is predicted to punch a colossal 17% earnings decline in 2014, to 31.3p per share on the back of lumpy military sales, although a recovery in its critical markets is expected to underpin a solid 14% recovery in 2015, to 35.5p.

Accordingly Meggitt’s P/E multiple of 15.7 times for this year slips to a very attractive reading of 13.9 times in 2015. And the arms builder’s decent value relative to its growth prospects is underlined by PEG reading bang on the bargain watermark of 1.

As well as its involvement in military programmes, Meggitt also has tremendous exposure to the red-hot civil aerospace sector through hardware and aftermarket sales, another major lever for earnings growth.

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.

Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »