The Motley Fool

5 Super Mid-Caps For Your ISA: Tullow Oil plc, Petrofac Limited, Redrow plc, Ted Baker plc And Galliford Try plc

Tullow Oil

Even though the low oil price is a concern for investors, Tullow Oil (LSE: TLW) continues to offer superb long term potential. Now a FTSE 250 stock (having been demoted due to its market capitalisation falling outside of the top 100 companies in the UK), Tullow Oil is likely to see its share price come under pressure in the short run, as investor sentiment continues to weaken. However, it offers quite staggering growth prospects that could see it return to the FTSE 100 over the medium term.

In fact, Tullow Oil is expected to post earnings growth of 86% next year which, if met, could act as the catalyst for a significant rise in its share price. And, with the company’s shares having a price to earnings growth (PEG) ratio of just 0.2, they seem to offer stunning growth at a very low price.

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Also hit hard by falling energy prices is Petrofac (LSE: PFC). It is expected to see a decline in earnings of 23% in the current year and, as such, its shares now trade at a sizeable discount to the index, with them having a price to earnings (P/E) ratio of just 11.2.

However, there is much to be optimistic about for investors in Petrofac, since the support services company is forecast to increase its bottom line by 19% next year. This puts it on a PEG ratio of just 0.5, which shows that there is a considerable margin of safety on offer and that Petrofac could be a top performer moving forward.


One sector that is experiencing stunning performance at the present time is house building. In fact, Redrow (LSE: RDW) is forecast to increase its net profit by 39% this year and by a further 16% next year. If met, they would represent a superb performance and, with interest rates set to remain low for a number of years, Redrow’s outlook is extremely bright.

In addition, Redrow trades on a P/E ratio of just 8.9. This seems to be extremely difficult to justify given its future prospects – especially when the FTSE 100 has a P/E ratio of 16 – and, as a result, it is a hugely appealing buy right now.

Ted Baker

Shares in high-end fashion designer, Ted Baker (LSE: TED), continue to outperform the wider index and are up 19% since the turn of the year. Part of the reason for this is the large degree of customer loyalty that the company enjoys, with there being significant potential for pricing increases in future. In fact, Ted Baker’s customer loyalty has been a major part of why it has increased earnings in each of the last five years, with it averaging growth of 21% per annum.

Looking ahead, growth of 13% this year and 14% next year is set to come and, while Ted Baker’s shares are not cheap (as evidenced by a P/E ratio of 28.3), the stability and strong growth potential they have makes them a buy at the present time.

Galliford Try

Having crashed during the darkest days of the credit crunch, shares in Galliford Try (LSE: GFRD) have made a quite superb comeback. In fact, even though they are still 92% below their 2007 high, they have nevertheless risen by 363% in the last five years. And, looking ahead, more growth seems to be very much on the cards.

That’s because Galliford Try is expected to increase its bottom line by 16% in the current year, and by a further 18% next year. And, despite such excellent growth prospects (and its stunning share price rise in recent years), it still trades on a PEG ratio of just 0.7. As such, it could be worth adding to your ISA at the present time.

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Peter Stephens owns shares of Galliford Try and Petrofac. The Motley Fool UK has recommended Petrofac and Tullow Oil. The Motley Fool UK owns shares of Petrofac. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.