3 Great Growth Stocks Poised To Surge: Apple Inc., Persimmon plc And International Consolidated Airlns Grp SA

Royston Wild explains why Apple Inc. (NASDAQ: AAPL), Persimmon plc (LON: PSN) and International Consolidated Airlns Grp SA (LON: IAG) are all poised to deliver explosive earnings expansion.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Today I am looking at three big-cap beauties set to enjoy splendid bottom-line growth.

Apple

Smartphone and tablet PC giant Apple (NASDAQ: AAPL.US) has a stunning record of annual earnings growth. This does not come as a surprise given the firm’s pedigree of product innovation, a quality which has made its iPhone and iPad brands the standard to which all other tech manufacturers strive to match.

Indeed, Apple’s position as the go-to brand for tech connoisseurs is expected to keep sales striding higher in the coming years, a trend which City analysts expect to underpin earnings growth of 34% and 8% in the years concluding September 2015 and 2016 correspondingly.

As a result the business currently trades on what I consider ultra-cheap P/E ratios of 14.3 times prospective earnings for this year, and 13.3 times for fiscal 2016. Any reading below 15 times is generally regarded as attractive value.

With Apple’s iPhone 6 launch last autumn underlining the terrific desirability of its products — the firm sold an astonishing 74.5 million phones in October-December alone — and the business about to embark on the potentially-explosive smartwatch market , I believe Apple should continue to deliver strong bottom-line expansion for many years yet.

Persimmon

I am convinced that the housing crisis enveloping Britain should continue to blast earnings at housebuilders like Persimmon (LSE: PSN) higher. The country’s banks and building societies are making it increasingly easier for buyers to borrow through a combination of product rate cuts and charge reductions, while the government continues to give voters a helping hand to get on the housing ladder — Chancellor Osborne’s ‘Help To Buy’ ISA launched as part of this month’s Budget is further evidence of this.

Given these supportive factors, Persimmon is — like Apple — expected to keep its exceptional record of year-on-year earnings growth rolling. Indeed, the number crunchers expect the construction play to punch expansion of 17% in 2015, and a further chunky 13% advance is chalked in for 2016.

And these projections make Persimmon irresistible value for money, in my opinion. A mega–low P/E multiple of 11.4 times for this year falls to just 10 times for 2016, bang on the watermark which indicates irresistible bang for your buck. And a PEG readout of 0.7 times through to the close of next year, some way below the value standard of 1, underlines Persimmon’s great value.

International Consolidated Airlines Group

I believe that a backcloth of rising traveller numbers and brand strength should keep profits flying higher at International Consolidated Airlines (LSE: IAG). As well as boosting ticket sales for its British Airways and Iberia brands, I believe that the firm is also well positioned to benefit from the growing popularity of budget airlines such as its Vueling chain, an area which the firm is hoping to capitalise on through the purchase of Aer Lingus.

Having surged comfortably back into the black in recent years, International Consolidated Airlines is expected to keep this breakneck momentum rolling in the medium term at least — City analysts have marked in further earnings growth of 71% in 2015 and 22% in 2016.

Such numbers leave the airline group changing hands on earnings multiples of just 11.5 times and 9.4 times for 2015 and 2016 correspondingly. Considering that passenger numbers look set to continue surging across both its pan-European and transatlantic operations; fuel costs look set to remain subdued; and restructuring efforts still have much left in the tank, I believe International Consolidated Airlines is an excellent selection for growth seekers.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Black father and two young daughters dancing at home
Investing Articles

1 FTSE 250 stock I own, and 1 I’d love to buy

Our writer explains why she’s eyeing up this FTSE 250 growth phenomenon, and may buy more shares in this property…

Read more »

View of Tower Bridge in Autumn
Investing Articles

The FTSE 100 is closing in on 8,000 points! Here’s what I’m buying before it’s too late!

As the FTSE 100 keeps gaining momentum, this Fool is on the lookout for bargains. Here's one stock he'd willingly…

Read more »

Investing Articles

3 ideas to help investors aim for a million-pound Stocks & Shares ISA

The UK has a growing number of Stocks and Shares ISA millionaires, and this plan may be one of the…

Read more »

Illustration of flames over a black background
Investing Articles

2 red-hot UK growth stocks to consider buying in April

These two growth stocks are performing well, but can they continue to deliver for investors through 2024 and beyond?

Read more »

Charticle

Is JD Sports Fashion one of the FTSE 100’s best value stocks? Here’s what the charts say!

The JD Sports Fashion share price remains a wild ride during the first quarter. Could it be one of the…

Read more »

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »