Although ARM’s (LSE: ARM) (NASDAQ: ARMH.US) forecast earnings growth rate is perhaps not quite as impressive as it once was, it remains a hugely appealing growth play nonetheless. That’s because the Cambridge-based technology company is expected to increase its bottom line by 13% in the current year, and by a further 23% next year.
That’s around four times the anticipated growth rate of the wider index next year and, as a result, ARM trades on a rather heady price to earnings (P/E) ratio of around 40. While high, ARM’s P/E ratio has been higher and, when combined with the company’s growth forecasts, it equates to a price to earnings growth (PEG) ratio of 1.4.
This indicates that growth is on offer at a reasonable price (especially when the FTSE 100 has a PEG ratio of around 2.5) and means that ARM could be a strong performer next year.
Also forecast to post stunning earnings numbers next year is Barclays (LSE: BARC) (NYSE: BCS.US). While a number of its peers are struggling to deliver meaningful bottom line rises, Barclays is expected to have earnings that are 21% up on last year when it reports its 2014 annual results. Furthermore, it is set to follow this up with even better growth of 29% next year, which shows that Barclays is an enticing growth stock for the medium term.
In addition, with Barclays trading on a PEG ratio of around 0.5, it seems to offer such excellent growth prospects at a very reasonable price. As a result, it could prove to be a superb buy at the moment, with 2015 looking all set to be a great year for investors in the bank.
Although the falling price of oil has hurt a vast number of companies, those in the travel sector have benefitted hugely. Partly as a result of this, shares in easyJet (LSE: EZJ) have outperformed the wider index in 2014 and, looking ahead, they could do the same next year.
Certainly, the oil price looks set to remain at relative lows for the foreseeable future and this should help to boost easyJet’s bottom line moving forward. For example, it is forecast to increase earnings per share by 11% next year and, with shares in the company trading at a discount to the wider index, they seem to offer excellent value for money as well as compelling growth prospects.
In addition, with easyJet yielding over 3% and having a payout ratio of just 40%, there seems to be significant scope for dividend increases over the medium term. This could raise the appeal of the company and offer an extra boost to its share price in 2015.
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Peter Stephens owns shares of Barclays. The Motley Fool UK has recommended 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.