2014 has been something of a disappointment for investors in the UK stock market. That?s because the FTSE 100 has made little in the way of gains, being up just 2% since the turn of the year. This follows the 13% gain made in 2013. So, on a relative basis, 2014 has not quite been what most investors had hoped for.
However, a number of UK-listed companies continue to have huge potential. Here are three that could make a positive contribution to the wider…
2014 has been something of a disappointment for investors in the UK stock market. That’s because the FTSE 100 has made little in the way of gains, being up just 2% since the turn of the year. This follows the 13% gain made in 2013. So, on a relative basis, 2014 has not quite been what most investors had hoped for.
However, a number of UK-listed companies continue to have huge potential. Here are three that could make a positive contribution to the wider index, and to your portfolio, moving forward.
Although the FTSE 100 has made gains of just 2% in 2014, ARM (LSE: ARM) has performed much worse year to date, with shares in the UK tech firm being down 9%. However, they have shown strength in the last few months, backed by an upbeat set of results that showed ARM’s business model remains sound and able to deliver impressive levels of growth.
Indeed, ARM is all set to post bottom line growth of 10% in the current year and 22% next year. Certainly, investors are being asked to pay for such strong growth rates, with ARM trading on a price to earnings (P/E) ratio of 43. However, when combined with next year’s forecast growth rate, this gives a price to earnings growth (PEG) ratio of just 1.5, which shows that ARM offers growth at a reasonable price.
It’s been a different story for Aviva (LSE: AV) in 2014, with the insurance play being up 18% since the New Year. However, there could be more to come, since the company is expected to increase its net profit by a highly impressive 10% next year. With shares in the company trading on a P/E of just 11.3, this equates to a PEG ratio of 1.0, which is hugely attractive.
Clearly, Aviva does not offer the income potential that it once did. New management cut the dividend in March 2013 and it is yet to return to the pre-cut level. However, the company’s new strategy of slimming down the business and focusing on the most profitable regions, while simple, seems to be highly effective. As a result, Aviva could have a very bright future.
Sentiment surrounding Standard Chartered (LSE: STAN) has been weak during 2014, with shares in the bank falling by 9% since the turn of the year. This is perhaps understandable, with half-year profit falling by 20% and uncertainty over the recent fine weighing heavy on investors’ minds.
However, Standard Chartered is all set to bounce back in 2015. It is forecast to increase earnings by 10% and, with sentiment weak, shares in the bank offer great value for money right now. They trade on a P/E of just 11.2, which equates to a PEG ratio of only 1.0. With the company well-placed to benefit from further Far East growth, now could be a superb opportunity to buy shares in Standard Chartered.
Of course, ARM, Aviva and Standard Chartered aren't the only companies that could make a positive contribution to your portfolio. That's why we've put together a free and without obligation report on 5 shares that could boost your finances.
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Peter Stephens owns shares of Aviva. The Motley Fool UK owns shares of Standard Chartered and has recommended shares in 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.