3 stocks that thumped the market yesterday

Bargain hunting oversold stocks

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The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) rose just 0.04% yesterday, to end at 4,044.8, despite positive Wall Street leads overnight. Investors appeared to shun the market in the afternoon, as they started looking towards the EU Summit, which began yesterday.

Despite the flat market, these three stocks managed to rise by more than 5%. The theme appears to be investors hunting for stocks that may have been oversold.

Select Harvests Limited (ASX: SHV) jumped 11 cents, or 9.4% to $1.28. An orchard grower, Select Harvests recently sold 11 gigalitres of water to the Federal government for around $18m. Not bad for a company with a market cap of just $73m! The company still has ownership of another 30 gigalitres of water entitlements. In a letter to shareholders earlier this month, the company also announced that it expected its 2012 almond crop to be 35-45% higher than the 2011 crop. Select Harvests looks set to report a bumper 2012 financial year profit, and could be worthy of further research.

Macmahon Holdings Limited (ASX: MAH) shot up 3.5 cents to 55.5 cents, a 6.7% rise. The international contract mining and construction company has seen its share price fall more than 30% in the last three months, as investors show their concern for mining services stocks. With revenues of over $1.8bn and an order book in excess of $3.2bn, Macmahon appears to have previously been priced for failure.

TFS Corporation Limited (ASX: TFC) climbed 5.4% to 49 cents. Shares in TFS have risen 24% since the end of May, perhaps as investors see the stock as a bit of a bargain at these prices. The company owns and manages Sandalwood plantations in Western Australia. Despite the price rise, the stock is still trading on a trailing P/E of 4.7, and paying a dividend yield of 9.7%.

Foolish takeaway

Markets can overreact when there is so much doom and gloom about. Foolish investors can take advantage of this situation, as bargains can appear when stocks become oversold. Whether these companies end up being bargains is yet to be proven, but might be worthy of further research.

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Motley Fool writer/analyst Mike King doesn't own shares in any company mentioned. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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