Shell
One of the criticisms of Shell (LSE: RDSB) (NYSE: RDS-B.US) in recent years has been its size and inefficiency, with sector peers arguably being leaner, more nimble and more efficient. Under new CEO, Ben van Beurden, Shell has decided to rationalise its business and attempt to offload a number of non-core areas.
Not only does this mean that the company could improve profitability moving forward, it has also improved sentiment in the stock so that it has fallen by just 7% this year, while many of its peers have seen their share prices collapse in the wake of the oil price decline.
With Shell trading on a price to earnings (P/E) ratio of just 9.4, it seems to offer excellent value for money. Should the oil price stabilise in 2015, it could deliver strong share price performance over the next year.
easyJet
One of the beneficiaries of the credit crunch and squeeze on disposable incomes has been easyJet (LSE: EZJ). Its no-frills, budget offering has proved hugely popular with customers, with the company’s bottom line rising at an average rate of 49% per annum over the last five years.
While the falling oil price has helped easyJet this year in terms of it having lower costs, the decision by easyJet’s CEO, Carolyn McCall, to also focus on business customers is a key factor behind the company’s continued growth prospects. By doing so, easyJet has opened up another potential growth market, with it flying a record 12 million business passengers and the rate of growth increasing by an impressive 8.5% this year.
In addition, business customers tend to pay a higher rate and book later, with easyJet’s decision to offer allocated seating being the key reason for the rise in demand from business people. With the company trading on a P/E ratio of 12.7 and being forecast to grow earnings by 10% next year, it could be a top performer in 2015.
ITV
Clearly, ITV (LSE: ITV) has benefitted from an upturn in the UK economy, with advertising rates moving higher as the UK economy has recovered. However, the quality of programmes on the channel has improved hugely during the course of 2014 and, with the addition of niche channels such as ITVBe (which is aimed at women), ITV seems to be in a much stronger position when it comes to negotiating with companies regarding advertising rates.
Of course, CEO Adam Crozier has been at ITV since April 2010 and during his tenure the company’s share price has risen by an incredible 250%, while the FTSE 100 is up just 12%. Looking ahead, ITV is forecast to grow earnings by 18% in the current year, and by a further 10% next year. With shares in the company trading on a P/E ratio of 15.5, more share price gains could be on the cards.
Imperial Tobacco
The tobacco industry is currently undergoing a significant change, with e-cigarettes proving to be hugely popular among younger smokers in particular and having the potential to become the ‘new normal’ when it comes to nicotine delivery. So, it was highly encouraging to see that Imperial Tobacco (LSE: IMT), under CEO Alison Cooper, has acquired the biggest selling e-cigarette brand in the US, Blu. This appears to be a very encouraging and logical move for the business that could set it up for strong bottom line growth over the medium to long term.
In addition, under Alison Cooper, investors in Imperial continue to enjoy excellent increases in dividends per share. For example, they rose by over 10% this year and have grown in every year that she has been CEO. And, with Imperial still trading on a P/E ratio of just 12.9 despite its share price rising by 16% this year, it seems to still be a superb buy for 2015 and beyond.
