With the ASX going through a highly challenging period, it may feel as though it's impossible to buy shares that could deliver big gains moving forward.
After all, the ASX is in negative territory for the year and is showing little sign of moving higher in the near future.
However, there are companies on the ASX with incredible growth prospects, which over the medium term could see their share prices double. Here are three such examples.
Santos Ltd
The oil and gas producer, Santos Ltd (ASX: STO), has huge potential. Indeed, it is expected to grow earnings by 39.2% per annum over the next two years. This means that in FY 2015, earnings are set to be 94% higher than they were just two years prior.
That's a huge growth rate and is mainly due to strong production from PNG LNG and the planned onset of GLNG in 2015. Indeed, if Santos can maintain a similar growth rate beyond 2015 (which is achievable given the new LNG projects that are due to be developed) and maintain its current price-earnings (P/E) ratio of 19.9, then its share price could double over the next three years.
Woodside Petroleum Limited
Over the next two financial years, Woodside Petroleum Limited (ASX: WPL) is forecast to grow its bottom line at an annualised rate of 18.9%. This is a very impressive growth rate and shows that the company should still be considered a strong growth play.
However, it also means that if shares in Woodside Petroleum maintain their current P/E ratio of 13.5 and the company continues to increase earnings at a similar rate, then its share price could double over the next four years.
Certainly, the short run could be volatile, given that Shell will be able to sell its $5 billion stake in the company. However, the long run still could turn out to be highly profitable for investors in Woodside Petroleum.
Oil Search Limited
With earnings at Oil Search Limited (ASX: OSH) expected to grow at a phenomenal rate of 88.5% per annum over the next two financial years, the company's bottom line is in the process of being transformed.
New projects are the key to this, with PNG's biggest oil exploration company expected to benefit hugely from new LNG projects in the coming years. With such strong growth prospects, it would be surprising for shares in Oil Search to maintain their current rating of 23.8 times earnings. If they do, shares in the company could double in price over the next few years.
