It’s been a challenging year for Merlin (LSE: MERL) with the amusement park operator’s share price falling by 9% due in part to disappointing visitor numbers at its Alton Towers theme park. Clearly, this is understandable since Alton Towers was the location of a horrific rollercoaster accident and while visitor numbers may continue to be down in the coming months, Merlin’s other amusement parks continue to perform relatively well.
In fact, Legoland appears to be one of the strongest overall performers and is forecast to aid Merlin in reporting a rise in earnings of 15% in the current year, followed by further growth of 16% in the following year. Due to its share price fall, Merlin now trades on a price-to-earnings growth (PEG) ratio of just 1.1 and this indicates that its shares could deliver excellent performance.
Certainly, investor sentiment may remain weak in 2016 and Merlin’s shares could fail to beat the FTSE 100 in the short run. But for long-term investors now seems to be an excellent time to buy.
Also struggling in the last year have been shares in Next (LSE: NXT). They’re down by 26% during the period due in part to a somewhat downbeat outlook for the high street retailer. In fact, Next is expected to report a rise in its bottom line of just 1% this year and a further 5% next year, which is behind the growth rate of the wider market.
And with the company’s management saying that it expects 2016 to be a tough year for the general retail sector, it’s unsurprising that investors are rather lukewarm about Next’s prospects.
However, Next remains a high quality retail operation and its earnings growth is likely to remain robust due to high levels of customer loyalty. With its shares having a price-to-earnings (P/E) ratio of just 12.5, they seem to offer excellent value for money and could record a highly successful turnaround over the medium-to-long term.
Future star performer?
Meanwhile, Tullow Oil’s (LSE: TLW) share price has been dragged lower by a falling oil price, with the Africa-focused producer and explorer recording a slump in its valuation of 42% in the last year. However, with the oil price increasing, Tullow’s shares are up by 62% in the last three months, which could be the start of a sustained comeback for the company.
With Tullow Oil’s pre-tax losses of the last two years set to be reversed somewhat by profit in the next two years, investor sentiment could improve yet further over the medium-to-long term. And with Tullow’s Project TEN set to cause a sharp uplift in production volumes, Tullow could be a star performer in the second half of 2016 and beyond.
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Peter Stephens has no position in any shares mentioned. 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.