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Standouts from reporting season: REA Group, FlexiGroup and JB Hi-Fi

Here are three companies that have rallied following strong earnings reports. If you’re in the market for the long term (and we hope you are!), these winners may be worth consideration for your portfolio. Sure, you may have missed the initial jump in price, but strong companies generally continue to deliver.

REA Group (ASX: REA)

An improving real estate market provided impetus for REA Group’s jewel in the crown website, realestate.com.au, which is 61% owned by News Corp.  (ASX: NWS). The international expansion opportunities for its other websites are a significant driver going forward. The result confirmed that REA Group is one of the market’s premier growth companies.

While raising price targets and upgrading earnings forecasts, the majority of brokers were cautious about the current valuation. A subsequent 9.6% rally since the results will have done nothing to alleviate those concerns.

FlexiGroup Limited (ASX: FXL) 

The reaction to financial service company FlexiGroup’s interim result was uniformly positive. Broker Deutsche Bank stated that the company is building a legacy of reporting double-digit gains, with the company extending its run of double-digit earnings per share growth to five years.

A significant uplift in interest-free cards was a major positive, while full year profit guidance of $84 to $86 million remains on track. The share price has remained at attractive entry levels since the result.

JB Hi-Fi Limited (ASX: JBH) 

Market commentary was broadly positive, with CIMB Securities rating electronics retailer JB Hi-Fi as the preferred company for exposure to the Australian cyclical upswing. Despite sales results being pre-released, a rise in the full year profit guidance by 8% to between $126- $129million was a positive surprise.

The future is bright with a stable industry outlook, rational discounting and the home division growing strongly, with store openings proceeding apace. 

Foolish takeaway

In my opinion, Flexigroup is the standout performer of the above-mentioned stocks. Its track record, transparent accounts and current low valuation all point toward a quality, long-term core holding.

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Motley Fool contributor Mark Woodruff does not own shares in any of the companies mentioned in this article.

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