3 Unloved Stocks With Huge Potential: ARM Holdings plc, Vodafone Group plc And Standard Chartered PLC


With the FTSE 100 having disappointed in 2014, it’s understandable that many UK investors are feeling rather fed up with the investment world.

Indeed, you’d have made more money through doing nothing that investing in an index that has fallen by 3% year-to-date.

However, there is great hope for UK investors for 2015 and beyond, since there are a number of top quality stocks that could be due for a period of strong performance.

Certainly, many of them have delivered disappointing share price performance in 2014 but, looking ahead, they could be worth buying…

ARM Holdings

With shares in the UK’s most prominent technology firm having fallen by 19% since the turn of the year, they now offer even better value for money. Indeed, ARM (LSE: ARM) (NASDAQ: ARMH.US) now trades on a price to earnings growth (PEG) ratio of just 1.4, which is highly appealing to growth investors and shows that there is upside potential on offer in 2015 and beyond.

However, there’s more to ARM than just the prospects for growth at a reasonable price. Compared to many of its growth stock peers, ARM offers a consistency and strength of earnings growth that is relatively rare. For example, it has increased the bottom line in every one of the last four years, and is forecast to continue this trend over the medium term.

As such, investor demand for its shares could increase significantly moving forward, which would clearly be great news for its share price.


Having sold the ‘crown jewels’ earlier this year, Vodafone (LSE: VOD) (NASDAQ: VOD.US) has been left with a business that is severely lacking growth potential. Indeed, the sale of Vodafone’s stake in Verizon Wireless left it mainly focused on Europe, which is proving to be the slowest growing region in the world and, perhaps more worryingly, has thus far shown little sign of change.

However, Vodafone could be all set for a turnaround in its fortunes. Certainly, the Eurozone has disappointed in the recent past but, with a quantitative easing programme ready to make a difference to the region, Vodafone’s strategy of buying cheap European assets could be about to pay off.

While this may take months and years, sentiment could pick up in anticipation of improved prospects. And, with a yield of 5.4%, investors in the stock look set to collect a great income in the meantime.

Standard Chartered

Having been on the receiving end of two profit warnings and various allegations of wrongdoing, it’s understandable that investors in Standard Chartered (LSE: STAN) may be feeling disappointed. After all, shares in the Asia-focused bank have fallen by 29% year-to-date and now trade at their lowest point since the depths of the credit crunch in 2009.

However, there could be far more profitable days ahead for the bank and its investors. Indeed, shares in the bank are extremely cheap. For example, they trade on a price to earnings (P/E) ratio of just 9.2, which is staggeringly low, and yield a hugely enticing 5.4%. Furthermore, with earnings due to rise by 10% next year, they appear to tick the growth, income and value boxes, thereby offering considerable potential in 2015 and beyond.

Of course, by investing in high quality stocks at great prices, I believe that everyone can make decent returns from the stock market.

If you're considering investing in the stock market, you should be aware that there are 5 other shares that I think could prove to be even better investments than those I have discussed above.

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Peter Stephens does not own shares in any of the companies mentioned. The Motley Fool has recommended shares in ARM Holdings.