Today I am detailing three of the hottest growth stocks currently available on the London markets.
Barclays
Shares in Barclays (LSE: BARC) (NYSE: BCS.US) have trended lower in recent weeks, settling down after the bank’s explosive start to the year. Still, I believe that this weakness is likely to prove temporary as the firm’s terrific earnings prospects continue to improve.
City analysts expect 2014to have represented a landmark year for the bank, the 13% earnings rise heralding an end to the consistent bottom-line volatility seen since the 2008/2009 banking crisis took hold. Indeed, current forecasts signal further earnings rises to the tune of 45% and 18% for 2015 and 2016 correspondingly.
These projections leave Barclays changing hands on an ultra-low P/E ratio of 10 times predicted earnings for this year, bang on the threshold of 10 times which indicates stunning value for money. And this falls to just 8.5 times for 2016. With the firm’s Transform package cost-stripping package still delivering in spades, and the UK economic recovery boosting retail trade, I believe that Barclays is an irresistibly-priced pick at the current time.
Dixons Carphone
I reckon that Dixons Carphone (LSE: DC) is in prime position to benefit from improving retail conditions in both the UK and across Europe. Not only is the electrical goods giant’s Carphone Warehouse division enjoying market share gains, no doubt helped by Phones 4 U’s demise last year, but careful promotion activity and cross-selling opportunities across the group are also helping to boost the top line.
The City expects Dixons Carphone to stage an impressive 24% earnings bump in the year ending April 2015, resulting in an earnings multiple of 18.4 times. But with further expansion of 21% and 11% pencilled in for fiscal 2016 and 2017 correspondingly, the P/E ratio is driven to just 15.5 times and 13.7 times for these years.
And Dixons Carphone’s exceptional value relative to its earnings prospects is highlighted by PEG ratings of just 0.6 for this year and 0.7 for 2016 — any reading below 1 is usually considered tremendous bang for one’s buck.
Standard Life
Life insurance colossus Standard Life (LSE: SL) continues to enjoy bumper business inflows, and group assets under administration fell just short of the £300bn marker last year at £296.6bn, still representing an eye-popping 38% year-on-year rise.
With the company’s wide range of products giving it excellent exposure across the savings, investment and pensions markets, and Standard Life stepping up its efforts on the acquisition front — the insurer entered the potentially-lucrative advice market by purchasing Pearson Jones in February — I believe investors can expect business to rev higher in the coming years.
Standard Life is predicted to follow last year’s meaty 13% earnings improvement with a stratospheric 88% increase in 2015, creating a P/E multiple of 16.4 times. And this falls to just 13.5 times for 2016 as earnings are predicted to grow an extra 19%. Although these figures may not be spectacular, Standard Life’s terrific value is underlined by a PEG readout of just 0.2 for this year and 0.7 for 2016.
