Are Monitise Plc, Supergroup PLC And easyJet plc Set To Post Stellar Returns?

Today’s update from easyJet (LSE: EZJ) regarding passenger statistics for October is positive and shows that the company is moving in the right direction. The number of passengers it carried in October this year was 9.7% higher than in the same month of last year, with the figure rising from 5.8m to 6.4m. Furthermore, easyJet also improved its load factor (the proportion of seats filled by passengers) from 90.9% to 93.3% in the same comparable period.

Clearly, the airline industry is a relatively volatile place to invest. A major rise in the oil price or external events such as an air traffic control strike could have major impacts on easyJet’s financial performance. However, its margin of safety appears to be sufficiently wide to merit investment at the present time, with the company’s shares trading on a price to earnings (P/E) ratio of just 12.8.

With the company’s bottom line forecast to rise by 9% next year, easyJet has a price to earnings growth (PEG) ratio of only 1.3, which indicates that its shares look set to continue the run which has seen them rise by 12% over the course of the last year. Furthermore, with easyJet’s business proposition continuing to attract new customers, the airline’s income streams are becoming more diversified and robust, which is a major plus for long term investors.

Also releasing an update today is fashion brand Supergroup (LSE: SGP). Its sales for the first half of the year increased by 22% versus the same period last year, with the company recording strong growth from both its retail and wholesale operations. The opening of 14 new stores during the period is further evidence that the company has clear expansion potential as it seeks to develop a true lifestyle brand, with its focus on improving infrastructure and on developing new and innovative product lines appearing to offer a clear path to long term growth.

In addition, Supergroup reported higher than expected gross margins for the first half of the year due to strong high margin retail sales. And, with its bottom line due to rise by 12% in the current year and by a further 17% next year, its PEG ratio of 1.1 indicates that now could be a good time to buy a slice of it.

Meanwhile, mobile payment solutions company Monitise (LSE: MONI) has seen its share price soar in the last week, with it being up 25% in the last five trading sessions. However, there is no significant news flow to explain this sudden rise in the company’s share price, which has severely declined in recent years.

Although a rise in share price is clearly good news for Monitise’s shareholders, the company continues to struggle to turn a profit. While its product is successful in terms of it being widely used by a range of blue-chip clients and there is also excellent long term growth potential as the use of mobile payment apps increases, Monitise does not yet appear to have found the right business model through which to generate a profit. Until it does, it appears to be a stock worth watching rather than buying.

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Peter Stephens owns shares of easyJet. The Motley Fool UK owns shares of Monitise. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.