Miss out on Challenger Ltd’s 98% gain? Here are 3 more rising stocks to watch

Miss out on Challenger Ltd's 96% gain? Here are 3 more rising stocks to watch

See what market conditions and new situations are driving share prices.

Darryl Daté-Shappard

I started investing after finding a copy of Peter Lynch's "Beating the Street" in the English book section of a library in Japan, where I was living at the time in 1997. Seeing that regular people can find investment ideas just as easily as professionals, I used the philosophy of that book to invest in stocks in Japan, and later in Australia after moving in 2001. I also have experience in property investing, and went on to complete my masters degree in Applied Finance at QUT in Brisbane. I follow the investment style of Peter Lynch, Phillip Fisher and Warren Buffett-- knowing what you invest in, doing your homework to keep up with a stock's story and holding a healthy skepticism of what the stock market calls "value".

Published June 14, 2014 2:26 pm AEST

Many times investing is about keeping up with stock stories and noticing when market conditions or new situations are driving share prices.

Challenger Ltd (ASX: CGF), a financial services company that provides annuities and other products customers use to save and invest for the future, has climbed about 96% in the past twelve months. It is expanding its business in superannuation related services and its annuities are becoming popular amongst people who want to prepare more funds outside of super for retirement.

If you missed out on most of that share price gain, then here are three more stocks that you should have on your watchlist as their stories develop.

Energy producer Oil Search Limited (ASX: OSH) is looking forward to big changes in its oil production as the PNG LNG project starts shipping LNG this year. The company projects its production output could rise as much as four times once the project is running at full capacity. Earnings are forecast to take a step-like change upwards.

It has a 36 price/earnings ratio, but the project could yield more by expansion in the next 5-7 years. This could make the forward PE ratio for the outlier years lower than what it is now.

Perpetual Limited (ASX: PPT), the funds management company, is up about 20% in the past year, benefitting from higher investment returns from rising stock markets both here and abroad. It has a 3.3% dividend yield.

Its 19 PE ratio is towards the higher end of its historical range, but it is forecast to have higher earnings over the next two years thanks to the continuing bull market.

Lend Lease Group (ASX: LLC) is a property and infrastructure developer. Its growth potential comes from the expanding housing market. Lower interest rates are encouraging sales of new dwellings. For infrastructure, it may profit directly from the proposed $50 billion infrastructure spending plan, if it is awarded contracts for related road, rail, tunnel and other projects over the next six years.

The stock offers a 3.3% dividend and has a 14 PE ratio – average for its sector.

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