Looking for companies that have shown great performance and good shareholder returns all at a good price? Here are four that have what it takes.
Sometimes short-term setbacks or changes in their industries may make their share prices more attractive, so you need to find good companies like these with impressive five-year records, and start your positions when the share price is moving to your advantage.
FlexiGroup Ltd (ASX: FXL) provides leasing, vendor finance programs, credit cards, and payment solutions. They do the financing and installment payments for such goods and services as electronics, home improvement, trade equipment and furniture with major retailers.
In 2013 EPS growth was 16.6%, about the same as its 16.8 PE, and over the past five years the total shareholder return was an average annual 76.2%. More financing agreements with stores and increased numbers of customers using financing will keep this company growing.
When the financial markets are turning over more share trades and the economy is growing, Computershare Limited's (ASX: CPU) business expands since it provides share registry and electronic transfer services for share transactions.
Operating revenue and EPS growth were up 27.2% and 42.7% respectively in 2013.The PE is 19.6 and ROE is a whopping 27.2%.
Fortescue Metals Group Limited (ASX: FMG) has been paying down debt at a good clip from the higher sales and production it achieved in 2013. EPS growth was up by 20.5% and top-line operating revenue was up 32.8%.
It still has to work its debt levels down, but the 10.1 PE indicates value for your money if it can keep paying debt off. Less debt interest to pay expands earnings.
Super Retail Group Ltd (ASX: SUL) has been growing in share price from $2 to as high as $14 since 2009. Its past five-year total shareholder return is 44.6%, and in 2013 EPS was up 25.6% on a 22.1% rise in operating revenue.
It just announced lower first-half sales growth in some of its divisions, but overall sales increased 6% compared to the previous corresponding period. The market was quick to react, and badly at that, but investors who follow this company's story can now enjoy a share price that stabilised at $11.02 and a PE under 20. Thank Mr. Market for that.
Foolish takeaway
That balance between price and value must be weighed every day by investors and unfortunately it is usually just the price we can verify easily. Value comes only from knowing the market, the industry a company is in and how the company does its business. People spend more time on which car, used or new, to buy than investigating a company, and we all know that car values head down no matter where they start.
If a company has some issues, see if they are temporary situations that create buying opportunities or whether they are going to be multi-year headwinds or even structural changes in its industry.
