While the FTSE 100 has endured a highly challenging 2015, being down 7% since the turn of the year, a number of stocks have posted stunning share price gains. One example is Jet2.Com operator Dart Group (LSE: DTG), which has posted a share price rise of 93% since the turn of the year.
A key reason for this is a forecast for Dart Group to increase its bottom line by 64% in the current year. This puts it on a price-to-earnings growth (PEG) ratio of just 0.2 so its recent gains could continue into 2016.
A further catalyst could prove to be increases in the company’s dividends. With it yielding just 0.6% at the present time, Dart Group lacks appeal as an income play. But with dividends set to be covered almost 15 times in the current financial year, there’s tremendous scope for a rapid rise in shareholder payouts over the medium-to-long term.
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Also offering growth potential in 2016 and beyond is Prudential (LSE: PRU). Its shares took a major hit in 2015 when fears surrounding the Chinese growth story caused its valuation to plummet by 25% in a matter of days. However, it has recovered strongly to beat the FTSE 100 by 8% since the turn of the year.
Think Asia, not just China
Undoubtedly, Prudential remains exposed to further fears regarding China’s slowing GDP growth rate. But the key to the company’s future lies in the wider use of financial products across the Asia-Pacific region, as opposed to the headline rate of growth for the world’s second largest economy. In other words, even if China’s growth rate continues to slow, the expected increase in middle income earners is due to be so great that financial services companies that have a strong foothold in the region are likely to post exceptional rises in profitability over the medium-to-long term.
With Prudential being well-positioned to take advantage of this growth potential and its shares trading on a price-to-earnings (P/E) ratio of just 12.6, it appears to be a superb buy for 2016 and beyond.
No comeback… yet
Meanwhile, shares in Glencore (LSE: GLEN) continue to show no sign of mounting a sustained comeback. In fact, they have fallen by 9% in the last week and many investors are understandably wary about buying a slice of the diversified mining company. After all, things could get much worse before they get better with falls in the prices of commodities such as coal seemingly highly likely.
Yet 2016 could see the start of Glencore’s comeback. Its recent trading update showed that it’s making encouraging progress with its debt reduction plan. While there’s still some way to go, Glencore appears to have a clear path to strengthening its balance sheet over the coming years. Furthermore, it expects to remain in the black this year despite the challenging trading conditions and then is forecast to grow earnings by 19% in the next financial year.
As such, less risk-averse investors may be tempted to buy-in at the present time. But realistically, an investment in Glencore could take much longer than the 2016 calendar year to come good.
