Having passed the recent Bank of England stress test, investors in Lloyds (LSE: LLOY) (NYSE: LYG.US) should rightly feel more certain regarding the capital position of the bank. In addition to this, there is a great deal for investors in Lloyds to potentially look forward to, with it being forecast to yield around 3.9% in 2015 and offering great value at its current share price.
For example, Lloyds currently trades on a price to earnings (P/E) ratio of 9.7. That’s below the FTSE 100’s P/E ratio of 14.3, which means that an upward rerating is very much on the cards. And, if the bank is able to grow its bottom line at a similar rate to the wider index (which is currently the forecast for 2015), then it makes such a relatively low rating even more difficult to justify. As a result, Lloyds could deliver a highly appealing total return in 2015.
Despite AbbVie’s bid for Shire (LSE: SHP) (NASDAQ: SHPG.US) falling through earlier this year, it doesn’t mean that more bids are not possible. After all, Shire’s drug pipeline has huge potential and could see the company’s top line double over the next five years. At a time when many of the major pharmaceutical companies are struggling to deliver any kind of meaningful sales growth, such a vast pace of growth could prove to be very alluring to a larger, cash-rich peer.
While Shire does trade at a premium to the FTSE 100 in terms of its valuation (it has a P/E ratio of around 20), its exceptional growth potential means that it still seems to offer good value for money at the present time. And, if the wider market does continue to experience a high degree of uncertainty, pharmaceutical stocks such as Shire could become much more in-demand due to their relatively strong defensive qualities. As such, it could be a top performer over the short, medium and long term.
Although the share price of BooHoo.Com (LSE: BOO) has fallen by around 40% since it listed in March 2014, next year could be an entirely different story. That’s because BooHoo.Com is forecast to post earnings growth of around 37% next year and, with wage rises set to outstrip inflation for the first time since the start of the credit crunch, upgrades to the company’s forecasts are a distinct possibility.
Despite BooHoo.Com trading on a higher rating than the wider index (it has a P/E ratio of around 38), when its growth forecasts are taken into account it seems to offer growth at a very reasonable price. As a result, it could prove to be a worthwhile buy at the present time, with it still appearing to have considerable potential to expand within the UK over the medium term.
Of course, finding stocks that could be worth buying for next year such as Lloyds, Shire and BooHoo.Com is no easy task. That’s especially the case if, like most private investors, you lack the time to trawl through the index looking for the best bargains.
Peter Stephens owns shares of Lloyds Banking Group. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.