With the FTSE 100 being exceptionally volatile at the present time due to the Greek crisis, it presents long term investors with a potential opportunity to buy stocks with bright outlooks at even more appealing prices.
For example, Standard Chartered (LSE: STAN) (NASDAQOTH: SCBFF.US) continues to offer a very appealing risk/reward ratio. Certainly, the future of the Asia economy remains very uncertain, with China’s soft landing having a major impact upon the wider region. And, with Standard Chartered being focused on the Far East, its bottom line could remain volatile over the short to medium term.
However, the bank has a new, slimmed down management team which is likely to refresh its future strategy. And, while it performed well during the credit crunch, investor sentiment towards Standard Chartered has not been strong in recent months – as evidenced by a 12% fall in its share price in the last year. This, though, presents an opportunity to buy a well-capitalised bank with vast exposure to what remains a fast-growing region of the world. And, with a dividend yield of 4.6% and a price to book (P/B) ratio of just 0.86, it has a very wide margin of safety.
Similarly, Boohoo.Com (LSE: BOO) has disappointed its investors in the last year. Its shares have fallen by 39% despite the company being all set to benefit from increasing disposable incomes among its customers. In fact, Boohoo.Com’s bottom line is forecast to rise by 79% during the next two years and, despite this, it has a price to earnings (P/E) ratio of just 25.2. This indicates that there is considerable upside on offer and, while Boohoo.Com may not be an investors’ favourite at the present time, its long term price appreciation potential is vast.
Meanwhile, engineering company, Meggitt (LSE: MGGT), has seen its share price fall by 6% in the last year. However, the market appears to be overly pessimistic on the company’s future growth prospects, with a recovering global economy likely to ensure that Meggitt’s top and bottom lines gain a boost moving forward.
In fact, Meggitt has a price to earnings growth (PEG) ratio of just 1.5, which indicates that it offers growth at a reasonable price. And, with it having a debt to equity ratio of just 32%, it should be in a strong position once interest rates start to rise and this could allow it to offer improved margins versus its rivals over the medium to long term.
Of course, not all stocks that appear to be worth buying need to have posted a fall in their share price in recent months. Fund management group, Schroders (LSE: SDR), has seen its share price rise by 27% in the last year and at least part of this is due to a FTSE 100 that remains relatively high even with the uncertainty surrounding Greece. And, with Schroders having a beta of 1.3, it looks set to beat a rising FTSE 100 over the medium to long term.
Furthermore, Schroders offers an excellent track record of profit growth at a very reasonable price. For example, it is set to have increased its bottom line at an annualised rate of 10.2% during the last five years and, looking ahead, its PEG ratio of 1.6 indicates that even though it has performed well in the last year, further share price gains are on the horizon.
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Peter Stephens owns shares of Standard Chartered. 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.