Today I’m looking at three stocks that could outperform the market over the medium term. 

Gambling merger

Gambling company Ladbrokes  (LSE: LAD) is on the brink of a transformational acquisition of Coral Group. This integration will create the UK’s largest licensed betting office estate and make over £65m of cost synergies per annum. The merger is currently being analysed by the Competition and Markets Authority but the market expects the acquisition to be given the OK shortly. Providing the deal goes through, the company looks somewhat undervalued compared to peer Betfair, which is trading on 25 times earnings. In the Q1 2016 trading statement group revenue was up over 10% year on year, and importantly digital revenue was up over 36% — this is an area where Ladbrokes trails rivals. The company should see earnings per share rise substantially next year and the shares should really be trading around the 200p mark at the least. 

Oil recovery

Oil favourite Tullow Oil  (LSE: TLW) looks like the perfect stock for investors looking to play the oil price rise. The company produces over 65,000 bopd mainly from large developments in Africa. Tullow has a net debt of $4.5bn but ample headroom with over $1.3bn in unused debt capacity and free cash. Tullow is planning to bring the TEN development online in July/August of this year and the company believe the annualised 2016 production of TEN will be 23,000 bopd (net 11,000 bopd). This increased production should help Tullow keep debt capacity low by the increase in cashflow coming into the company. Tullow is also drilling exploration wells in Africa and Europe which could act as small catalysts for the share price in the future. For obvious reasons the share price is heavily linked to the oil price, and I think that Tullow is one of the best ways to play the increasing oil price.

Flying high

Today easyJet (LSE: EZJ) released its May 2016 passenger statistics and shares are down by just over 1%. The company saw a 5.7% year on year increase in passengers which is encouraging especially in a month with a major air disaster. easyjet released half year results on the 10th May which were impressive and indicated to me the business could have a great year. The company made a loss of £24m but this was due to an adverse currency impact and the company made a constant currency profit of £5m. This half of the year is by far the weakest so any profits over this time are great going forward. Passenger number were up by 7.4% and the company returned over 55p a share to shareholders in the form of dividends over the six months. easyJet trades on a price to earnings ratio of only 10 and pays a hefty dividend and this is why I prefer the stock to rival Ryanair

These three shares could all substantially outperform the market over the next year or two. Share prices may begin to rise following the EU referendum as fund managers that have been avoiding UK mid/large cap companies will begin to invest in the index again. 

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Jack Dingwall 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.