Readers maybe felt the pinch on Monday when the S&P/ASX 200 (INDEXASX:XJO) lost 2.8% – or $40 billion dollars – of its market value after a major sell-off in the US last Friday night. Despite the initial fear, the index closed up 1% for the week as saner heads prevailed and bargain hunters dived right in.
As we're still in results season, many companies released their annual reports during the past five days, and here are some of the best:
Flight Centre Travel Group Ltd (ASX: FLT) soared 14% for the week after announcing on Thursday a 6.8% increase in revenue, a 3.4% decline in underlying profit and slightly weaker margins. It's somewhat ironic that shares performed so well given that the hint of weaker margins earlier this year created a massive sell-off. I personally picked up shares in the mid $37s, and I'm confident the business has a solid long-term future.
Myob Group Ltd (ASX: MYO) shares were up 7% for the week after the company released its half-year results on Thursday. Investors were excited about the company's 8% rise in revenue and 14% rise in profits, as well as significant growth in the number of cloud subscribers.
It seems that everybody wants cloud software, and with Myob recently being ranked ahead of XERO FPO NZ (ASX: XRO) in terms of innovation, Xero shareholders certainly have something to think about.
IOOF Holdings Limited (ASX: IFL) announced its full-year results yesterday, rewarding investors who held them with a 41% increase in underlying profit, while Funds Under Management grew 29%. Importantly, while the company appears to be trading cheaper than competitors Platinum Asset Management Limited (ASX: PTM) and Magellan Financial Group Ltd (ASX: MFG), IOOF comes with additional risks as a result of its dodgy financial practices.
Blackmores Limited (ASX: BKL) smashed through the $100 mark during the week, spurred on by an 83% increase in profit. The limited number of shares on issue is complicated by high demand, resulting in its rapidly rising share price. Some market watchers have set a price target of $150 on the stock! Whether Blackmores will get there is anybody's guess but it's likely already a classic 'should have' (kept/bought) stock for many investors.
Vocus Communications Limited (ASX: VOC) successfully wrapped up a deal for Amcom Communications in recent weeks, although the acquisition was not material to its full-year results which came out on Thursday. Vocus saw a 34% increase in underlying profit, although earnings per share lifted only 6% thanks to a massive capital raising.
However, Amcom will make a full year of contributions in 2016 and investors should see a significant lift to their profits as well as synergies and cost savings for several years to come.
MainstreamBPO Limited (ASX: MAI) is a new Initial Public Offering (IPO) working in the fund administration sector. Many investors will have been offered the chance to participate through their retail broker, but it's important to fully read and understand the prospectus before taking a look.
Management's forecasts for 2016 (and the Price to Earnings multiple of shares!) are based on contracts that haven't been won yet, while profit margins in recent years have been razor thin. There are many growth alleyways but MainstreamBPO may not suit every investor.
Finally, investment bank Goldman Sachs concluded that dividend stocks are still the main game in town given the growth outlook remains uncertain for many of Australia's biggest companies. Goldmans indicated that Woolworths Limited (ASX: WOW), QBE Insurance Group Ltd (ASX: QBE) and AGL Energy Ltd (ASX: AGL) were among its favourite dividend picks in the local market.
