With the exception of a few nasty surprises, I think most investors would agree that the latest reporting season was broadly in line with market expectations.
The overall sentiment was boosted by a rebound in mining profits, although a number of industrial shares also impressed after announcing higher dividends and/or share buy-backs.
With that said, there are a number of shares that look significantly less attractive after their recent results, including:
Medibank Private Ltd (ASX: MPL)
Medibank Private is making good ground on cutting costs and reducing fraudulent claims but it continues to experience a high level of customer churn. Not only is the private health insurer struggling to gain new policyholders, it is also losing existing policyholders at an alarming rate.
This is in stark contrast to NIB Holdings Limited (ASX: NHF) which is actually growing its policyholder base and enjoying a period of strong momentum.
As a result, I would be inclined to avoid Medibank Private for now especially since the shares still trade at a premium to the broader market.
Ansell Limited (ASX: ANN)
Ansell has some excellent defensive features but its lack of revenue and profit growth is concerning. In addition to an increasingly competitive operating environment, the company has flagged the potential for currency headwinds and higher raw material costs to negatively impact profits in the second half.
Furthermore, it is difficult to see the share price moving significantly higher from here since the shares are trading on a price-to-earnings ratio of around 16 and offer a relatively unattractive, unfranked dividend yield of 2.7%.
Flight Centre Travel Group Ltd (ASX: FLT)
The market already had pretty low expectations for Flight Centre coming into its interim result, but the company still managed to deliver a weaker-than-expected result.
Unfortunately, the travel agent faces an uphill battle to meet its full-year guidance since it will need to almost double its first-half profit before tax (PBT) result of $113 million.
Although some investors would argue that the shares are cheap right now, I believe the current valuation is fair considering Flight Centre is cutting its dividend and unlikely to deliver positive earnings growth for some time.
While this may sound harsh, investors only need to look at Webjet Limited (ASX: WEB) and Corporate Travel Management Ltd (ASX: CTD) to see that the travel market is hardly contracting.
