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Are these 3 big winners still an opportunity?

The Australian bull market rages on; dominated by resource companies in recent times, there have still been plenty of big gainers in other sectors including insurance, travel, and banking. Here’s my take on whether these 3 companies are still an opportunity today:

NIB Holdings Limited (ASX:NHF) – up 57% in the past 12 months

NIB’s a good business and you can’t argue with its performance over the past few years. Taking market share from larger competitors and lower than average claim costs in recent years have certainly helped boost profits. However, priced at more than 20 times earnings, I think the company looks expensive, especially when management tells investors that claims are expected to grow at a faster rate in the future:

source: Company presentation

I don’t own NIB, but if I did I’d consider it a hold at today’s prices.

Bendigo and Adelaide Bank Ltd (ASX:BEN) – up 33% in the past 12 months

Bendigo shares could well have hit a peak, with income from operations growing 1.5% while net profit after tax rose just 0.1% at the recent half year results. With competition remaining fierce, additional restrictions on lending being imposed by the regulator, and the bank aiming to increase its capital reserves through the use of its dividend reinvestment plan, it is hard to see how Bendigo will be able to grow its profits in the future.

The company’s 5.7% dividend does look attractive, however.

Webjet Limited (ASX: WEB) – up 87% in the past 12 months

Webjet shares have shot up like a rocket over the past 2 years, as growing market share and profits have attracted new investors. The company recently announced that it was in a good position to continue growing rapidly, and has acquired a promising new business while disposing of an under-performing one, Zuji.

However, at today’s prices Webjet looks to have a significant amount of future growth priced in. While the company is still growing market share I think it would be foolish to bet against it, but nor does it look like outstanding value right now.  I’d call it a hold.

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Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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