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Is Now The Perfect Time To Buy SABMiller plc, BAE Systems plc And ARM Holdings plc?

SABMiller

Over the last year, shares in SABMiller (LSE: SAB) have outperformed the FTSE 100 by 11%. And, looking ahead, a similar level of outperformance is very realistic, since SABMiller has excellent defensive prospects that could cause investors to bid up its share price.

For example, it has a very reliable earnings profile, with it having increased its bottom line in each of the last four years, and being expected to continue to do so in the next two years. And, with the potential to expand into new markets and also engage in M&A activity moving forward, its bottom line could surprise on the upside during what is expected to be a turbulent period for the FTSE 100. So, while SABMiller does trade on a rather rich price to earnings (P/E) ratio of 22, it seems to be well worth buying at the present time.

BAE Systems

For BAE (LSE: BA), there is vast potential for increased sales over the medium to long term. That’s because the US economy is posting excellent growth numbers, while the emerging world is also continuing to grow at a rapid rate, which means that demand for defence solutions is set to increase.

Of course, in the meantime BAE offers an excellent income profile. For example, it presently yields 3.9% and this is set to rise to 4.1% next year as the company’s dividend grows. Furthermore, BAE has a beta of just 0.9, which means that its shares are set to be less volatile than the wider index in future, which could make them an appealing defensive play and push the company’s rating upwards from its presently low figure of 13.7.

ARM

Shares in ARM (LSE: ARM) (NASDAQ: ARMH.US) have outperformed the FTSE 100 by 350% during the last five years and, as such, many investors may be of the view that they are due a pullback. After all, ARM does trade on a very rich rating of 37.6 at the present time.

However, there could be more gains to come from ARM, since it continues to enjoy a dominant position in a highly lucrative industry with high barriers to entry. This means that the company’s margins should remain relatively high in the long run, thereby allowing it to grow its bottom line at a rapid rate. Certainly, it may be entering a more mature phase, but with its net profit expected to rise by 69% this year, ARM remains a very enticing growth play that is worth buying right now.

Of course, ARM, BAE and SABMiller aren't the only companies that could be worth buying at the present time. With that in mind, the analysts at The Motley Fool have written a free and without obligation guide called 5 Shares You Can Retire On.

The 5 companies in question offer stunning dividend yields, have fantastic long term potential, and trade at very appealing valuations. As such, they could deliver excellent returns and provide your portfolio with a major boost in 2015 and beyond.

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Peter Stephens owns shares of BAE Systems. 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.