The Australian sharemarket received a welcome boost when the Reserve Bank elected to slash interest rates even further last Tuesday, but one ASX stock has heavily outperformed the market in that time.
While the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has jumped 2.8% to a new six-year high, Mortgage Choice Limited (ASX: MOC) has risen an astonishing 16.9% from $2.36 to $2.76. As the name would suggest, Mortgage Choice is an Australian mortgage broking company which assists individuals to find the mortgage product that best suits their own needs.
The company recently achieved a new milestone, settling $1.087 billion worth of mortgages in December. With interest rates now sitting even lower at 2.25 per cent (and likely to fall even further), mortgage lending is tipped to continue rising which should benefit companies like Mortgage Choice significantly.
The stock is currently trading on a price-earnings ratio of 18.4 times 2014 financial year earnings which seems quite reasonable considering Mortgage Choice's ability to continue expanding. Macquarie recently gave the stock an "Outperform" rating with a $2.90 price target while CIMB also upgraded the stock from 'Hold' to 'Add'.