2014 has been an encouraging year for investors in Pace (LSE: PIC). Shares in the set-top box producer are up 11% thus far this year, with the company announcing recently that, owing to higher than expected margins, its full-year profit will be higher than previously anticipated. In fact, it?s set to be 17% greater than it was last year, which is a highly impressive growth rate and more than twice the forecast for the wider market this year.
Despite this, shares in Pace still trade on a low valuation. For example, their price to earnings (P/E) ratio is…
2014 has been an encouraging year for investors in Pace (LSE: PIC). Shares in the set-top box producer are up 11% thus far this year, with the company announcing recently that, owing to higher than expected margins, its full-year profit will be higher than previously anticipated. In fact, it’s set to be 17% greater than it was last year, which is a highly impressive growth rate and more than twice the forecast for the wider market this year.
Despite this, shares in Pace still trade on a low valuation. For example, their price to earnings (P/E) ratio is just 10.8, which means that their price to earnings growth (PEG) ratio is hugely appealing at just 0.6. As a result, Pace looks hugely appealing at its current share price and could be a top performer next year.
Although the UK housing market is undoubtedly cooling at the moment, there is still tremendous potential for house builders such as Persimmon (LSE: PSN). That’s because there is still a major undersupply of housing in the UK, and Persimmon looks set to enjoy strong revenue growth over the medium term as a result of this.
Indeed, Persimmon’s bottom line is forecast to grow by a whopping 43% in the current year, followed by 23% next year. And, with a P/E ratio of just 12.6, its PEG ratio of 0.3 is massively appealing and means that shares in the company could have an excellent 2015.
Although Supergroup (LSE: SGP) released a profit warning recently, it was almost entirely due to unseasonably warm weather that is not reflective of the company’s underlying performance.
Indeed, Supergroup is making encouraging progress and is forecast to increase its bottom line by 17% next year. With a P/E ratio of 14.7, this puts it on a highly desirable PEG ratio of just 0.8 and means that, after a disappointing 2014 that has seen its share price tumble by 40%, 2015 could be a much better year for the seller of Superdry branded goods.
As with Persimmon, Galliford Try (LSE: GFRD) looks set to be a beneficiary of the high demand for housing in 2015 and beyond. For example, its bottom line is expected to rise by 14% next year, which is roughly twice the rate of growth of the wider index and would make it five years in a row of profit growth.
Despite this excellent track record and strong prospects, shares in Galliford Try continue to trade at a very appealing price. For instance, they have a PEG ratio of just 0.7, which indicates that growth is on offer at a very reasonable price and sets the company up for a strong 2015.
Although Monitise (LSE: MONI) has vast long-term potential, its performance in 2014 has been hugely disappointing. That’s because shares in the mobile payment solutions company have fallen by 51% since the turn of the year, with uncertainty surrounding the future of key shareholder (and customer), Visa, weighing on investors’ minds.
While Monitise is expected to turn a profit for the first time in 2016, this should not be taken as a foregone conclusion by investors. That’s because moving from many years of losses to a profit can take longer than expected, and may be subject to delays that cannot be foreseen. So, while 2015 may be a better year than 2014 for investors in Monitise, it may struggle to achieve star status.
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Peter Stephens owns shares of Galliford Try and Persimmon. The Motley Fool UK has recommended Pace. The Motley Fool UK owns shares of Monitise. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.