Will Sirius Minerals plc, Regus plc and Relx plc beat the FTSE 100 all over again?

Updated
Sirius Minerals plant shoots
Sirius Minerals plant shoots

Flexible workspace solutions provider Regus(LSE: RGU) has today released an upbeat trading statement for the first quarter. Encouragingly, it's in line with management expectations and included a 14.5% increase in revenue as well as a doubling of the company's cash generation. And with 42 new locations added to the company's global network, Regus seems to be well-placed to deliver further growth over the medium-to-long term.

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In fact, Regus is forecast to increase its bottom line by 28% this year and by a further 23% next year. And with its shares trading on a price-to-earnings-growth (PEG) ratio of just 0.7, they seem to offer good value for money. Clearly, Regus remains a relatively cyclical business and its outlook could deteriorate if the outlook for the global economy worsens. But with such a wide margin of safety, Regus looks set to beat the FTSE 100 after having done so by 33% in the last year.

Index beater?

Similarly, information and analytics specialist Relx(LSE: REL) has also handsomely outperformed the FTSE 100 over the last year. Its shares have risen by 9% while the FTSE 100 has fallen by 11%. Looking ahead, Relx is due to increase its bottom line by 12% this year and by a further 7% next year. This puts it on a PEG ratio of 1.5, which indicates that its shares offer a relatively appealing risk/reward ratio and have a good chance of beating the wider index.

Although Relx may not have the fastest growing bottom line in the FTSE 100, it has been very reliable in recent years. In fact, it has recorded positive earnings growth in each of the last five years and at a time when the outlook for the global economy is rather uncertain, it could become increasingly popular among investors. And with a dividend which is covered 2.2 times by profit, Relx's yield of 2.6% may hold significant appeal in the long run.

Future prospects priced-in

Meanwhile, Sirius Minerals(LSE: SXX) has also outperformed the FTSE 100 in the last year. Its shares have risen by a whopping 48% during the period as approval was granted for Sirius Minerals' potash mine in Yorkshire and crop studies yielded positive results for the company's polyhalite fertiliser.

While Sirius Minerals could deliver exceptional share price growth in the long run due to high demand for its fertiliser, in the shorter term its shares could fail to record such strong performance. That's because much of the company's future prospects seem to be priced-in, while challenges regarding fundraising in what is a tough period for the mining sector may not be fully included in the company's valuation.

As such, and while Sirius Minerals may be of interest to less risk-averse investors, the chances of it beating the market as handsomely as it has done in the last year appear to be slim.

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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.

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