2014 has been a tough year for the FTSE 100. It has been weighed down ? especially of late ? by a weak Eurozone, fears about the spread of Ebola and the US ending its monthly asset repurchase programme.
As a result, many of the index?s biggest names have delivered negative returns to investors during the year.
However, a number of companies are now significantly more reliant upon emerging markets for sales growth than they are upon the Eurozone and developed world. As such, they…
2014 has been a tough year for the FTSE 100. It has been weighed down – especially of late – by a weak Eurozone, fears about the spread of Ebola and the US ending its monthly asset repurchase programme.
As a result, many of the index’s biggest names have delivered negative returns to investors during the year.
However, a number of companies are now significantly more reliant upon emerging markets for sales growth than they are upon the Eurozone and developed world. As such, they could be better placed to deliver stronger growth and share price performance than the FTSE 100 moving forward.
With that in mind, here are three companies that could smash the FTSE 100 in 2015.
While Diageo’s (LSE: DGE) (NYSE: DEO.US) bottom-line growth has been stunted over the last year, it continues to have superb long-term potential. Most of this is derived from a relatively high exposure to emerging markets, where Diageo’s premium stable of brands is proving to be increasingly popular among the rising middle class.
Although Diageo’s growth potential is clear, it continues to offer top notch defensive qualities, too. For example, it has a beta of just 0.65 (meaning its shares should fall by 0.65% for every 1% fall in the wider index) and, with sales of alcoholic beverages being relatively stable, it should offer a consistent and highly defensive shareholder experience moving forward. As such, it has the potential to beat the FTSE 100 in 2015.
While the recent update from Burberry (LSE: BRBY) disappointed a number of investors, the company was still able to increase sales by 14% in the first half of the year. This is a very impressive result given that the Eurozone has been very weak and sales in China have softened somewhat, and it further highlights just how strong the Burberry brand is, too.
Indeed, Burberry has strong growth potential, with its bottom line expected to increase by 9% next year. This could prove to be the catalyst to push shares higher – especially when other brands such as Mulberry are failing to successfully compete at a similar price point — and, as such, it could beat the FTSE 100 in 2015.
Although Neil Woodford recently sold shares in Reckitt Benckiser (LSE: RB), the consumer staples and health care company still may have huge potential. It certainly has a very impressive track record of growth, with the company’s bottom line having grown in each of the last five years.
Furthermore, with emerging markets still experiencing a transitionary period, there seems to be tremendous opportunity for Reckitt Benckiser to build on its already well-established brand loyalty and increase its top and bottom lines moving forward.
With excellent defensive qualities (including a beta of just 0.75), Reckitt Benckiser, alongside Burberry and Diageo, could outperform the FTSE 100 in 2015.
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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has recommended Burberry. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.