While the FTSE 100 has disappointed thus far in 2015, being up less than 0.5% year-to-date, a number of stocks have considerably outperformed it. For example, and despite continued uncertainty regarding regulatory action within the banking sector, Barclays (LSE: BARC) (NYSE: BCS.US) has surged by 7% since the turn of the year, as the prospects for the UK economy have continued to improve.
Furthermore, the likes of shipping company, Clarkson (LSE: CKN), and housing provider, Crest Nicholson (LSE: CRST), have seen their share prices soar in 2015 by 46% and 44% respectively. And looking ahead, both they and Barclays could deliver even more outperformance over the medium to long term.
A key reason for this is their superb growth rates. While most FTSE 100 stocks are set to grow their bottom lines in the mid to high single digits in each of the next two years, Barclays is expected to post growth of 34% in the current year, followed by growth of 23% next year. That’s clearly a superb rate of growth and should act as a catalyst on the company’s share price – especially because a number of its index peers are enduring highly challenging periods at the present time.
Similarly, Clarkson and Crest Nicholson are also forecast to post earnings growth rates that are considerably higher than those of the wider index. In fact, Clarkson’s net profit next year is set to be 31% higher than it was last year, while Crest Nicholson’s is due to be 49% higher over the same time period. Those are superb growth rates and, despite this, both stocks are not fully valued even though their shares have performed so strongly this year. For example, they trade on price to earnings growth (PEG) ratios of 1 and 0.4 respectively which, alongside Barclays’ PEG ratio of 0.4, indicate that all three stocks offer very wide margins of safety. In other words, their risk/return ratios are hugely appealing.
Furthermore, all three stocks offer an excellent yield, too. For example, Barclays is set to yield 4% next year, while Clarkson and Crest Nicholson have forward yields of 2.9% and 4.9% respectively. As such, they seem to offer a potent mix of growth, value and income and, as such, have the potential to see their share prices bid up by a range of investors seeking differing characteristics from their holdings.
Of course, it could be argued that because they have performed so well in 2015 that there will be some profit taking. And, while this may be the case moving forward, the reality is that demand to buy into such strong futures should outweigh the pressure put on the share price by existing investors cashing in on excellent share price performance. Therefore, while the future for the FTSE 100 and the European economy is somewhat uncertain, Barclays, Clarkson and Crest Nicholson are likely to be top performers in the long run, which makes now the ideal time to buy a slice of them.
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Peter Stephens owns shares of Barclays. The Motley Fool UK has recommended Barclays. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.