Shares in ARM (LSE: ARM) have disappointed over the last year, having fallen by 20% during the period. A possible reason for this is uncertainty regarding the growth rate of the Chinese economy, with the world’s second-largest economy recording GDP growth that’s on the slide. And with ARM being heavily invested in the success of the smartphone market, there may be concerns surrounding sales growth of such products in China.

However, ARM’s latest update indicates that it’s a company with a very bright future. One area in which the company is investing heavily is the Internet of Things, with ARM seeing this as a major growth segment for the long term. It could contribute to improved financial performance in future years and with ARM having an asset-light business model focused on intellectual property rather than the manufacturing process, it seems to be well-positioned to offer double-digit growth over the long run.

With ARM now trading on a price-to-earnings-growth (PEG) ratio of just 0.6, it seems to offer excellent value and looks likely to reverse the disappointing share price performance of the last year.

Positive outlook

Also recording negative returns over the last year have been shares in Spirent Communications (LSE: SPT), with them falling by 13%. While disappointing, the outlook for Spirent remains positive since the company is forecast to increase its bottom line by 15% this year and by a further 17% next year.

Certainly, Spirent’s track record of growth is rather mixed and in the last few years its pre-tax profit has sunk from £79m to just £6m. With guidance having the potential to be downgraded, it could be crucial to have a wide margin of safety before buying-in.

With Spirent having a PEG ratio of just 1, it seems to offer a relatively appealing risk/reward ratio and although its shares could prove to be more volatile than the wider market owing to its less consistent business model, Spirent could be a strong performer over the medium-to-long term.

Buy for the future?

Meanwhile, global mobile satellite communications services provider Inmarsat (LSE: ISAT) has recorded a share price fall of 18% since the turn of the year. This is perhaps unsurprising, since the company reported a fall in earnings of 17% last year and is due to deliver a further decline of 21% in the current year. As such, investor sentiment could come under further pressure in the short run and push Inmarsat’s share price down further.

However, with Inmarsat expected to return to growth in the 2017 financial year, its shares could be worth buying right now. In fact, Inmarsat’s bottom line is expected to increase by 20% next year and with it trading on a PEG ratio of 1.2, it seems to offer a sufficiently wide margin of safety to warrant investment.

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Peter Stephens owns shares of ARM Holdings. 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.