It is indeed a pleasant experience to invest in stocks that have high growth potential. If those stocks are available at affordable rates, investors should immediately grab the opportunity to invest in them and get long term returns. If a stock has the potential to grow at a minimum of 10% at least per year for the next half a decade and if it is available at affordable rates, it is the right chance for investors to buy them, as they would tend to get costlier in the future. Wall Street experts recommend the following stocks to be bought right now, as they are currently trading at many times less than their book value. These stocks also have immense capacity to grow multi-fold in the coming years and could be the right choice for you if you are looking for long term gains.
Effective cost cutting and increased demand
Of all the companies that have bounced back from the terrible recession of 2008, Goodyear Tire and Rubber (GT, Financial), is probably one of the cheapest and most promising. The company learned its lessons well during the recession as it was hit by close to 35% drop in sales revenues and external pressure from emerging markets like China. Today, experts believe that the company is well on its way to recovery as they expect it grow at a remarkable 11% every year from now, for the next five years at least. With a forward PE of just 8 and a series of growth initiatives in progress, Goodyear is sure to give you great returns. During the last quarter of 2014, the company reported a whopping $1.7 billion worth of operating income. Goodyear has been focusing on three key areas for its development – cutting costs, focusing on premium tires and improving shareholders’ worth through dividends and repurchases. The stock movement for the last few years is seen below:
Improving asset quality and growth of key business
As an investor, you would have known about the problems in the European economy. All European stocks are currently down and this is where Deutsche Bank (DB, Financial) provides you a great opportunity for investing. Currently, the share prices are trading at more than half of their book value and you are sure to strike a good deal with the bank if you purchase these shares right now. In spite of the global economy not supporting it, there are many positive factors to look forward to for the bank in terms of investor worth. First and foremost, investment banking business, that has been the pet business project of the bank, has been doing quite well and giving its peers a tough competition indeed. Secondly, the bank had cut off close to 50% of its bad loans during 2014, thereby improving the quality of its assets to a great extent. With all these positive factors, Deutsche Bank with its low prices and 3% dividend yield, looks like a promising investment indeed. The trend of share price movement of the bank for the last few months is as follows:
Conclusion
When you notice a share trading at low prices, you must immediately think of the same as an opportunity and do detailed research. The first point that you need to consider is the future growth potential of that particular stock. The above mentioned stocks are trading at low prices because of unfavourable conditions of the market. They are currently involved in a series of activities that will improve their earnings and growth rate in the coming years. For these precise reasons, experts recommend investors to buy these shares right now, as their prices are set to surge within a few days time.
