Why did Carsales.com Limited, OZ Minerals Limited and Qantas rise over 10% in 1 week?

The ASX 100 top gainers for the week.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Last week the S&P ASX 100 Index (ASX: ^XTO) finished strongly up 3.6%. The Aussie dollar continued its climb following the RBA's decision to hold rates in the first week of February. That sent the exchange rate up from $0.87 versus the US$, to break the $0.90 level in mid-week before ending at $0.89 on Friday.

Carsales.com Limited (ASX: CRZ) led the ASX 100 companies in weekly gains by rising 19.7% to $10.61. It reported a 17% increase in its half-year NPAT to $44 million. Company revenue was also 10% higher at $112.3 million.

During the period investors showed concern about new car listings possibly being reduced or removed by car makers to protect their dealerships' direct sales, and shares were sold off from an $11.77 high.

One plus was its investment into WebMotors, the largest Brazilian car listings portal, in which it bought a 30% stake in June last year. Its share of associate NPAT was $2.3 million, thanks to WebMotors' 23% pro-forma revenue increase from the prior corresponding period.

OZ Minerals Limited (ASX: OZL) capped off a surprising week by ending up 15.2% at $3.93. The copper and gold miner based in South Australia announced a full-year net loss of $294 million after abnormals.

What set the share price off was the announcement that the company is looking for a partner in its Carrapateena project, the largest un-mined copper deposit in Australia. It acknowledged that a potential equity partner may want to either be the main operator and majority owner, or possibly acquire the whole.

The project is in its pre-feasibility phase, but assistance in funding and development would change the market view of the company being a single-mine business.

Qantas Airways Limited (ASX: QAN) climbed up 14.1% over the week, ending at $1.21, after Treasurer Joe Hockey said in a news conference that there were definite reasons for extending aid to Qantas.

The airline wants a government-backed debt guarantee as it cuts jobs and programs to bring down costs.

Large shareholders of Virgin Australia Holdings Ltd (ASX: VAH), themselves foreign airlines, have pumped in around $350 million into Virgin Australia through a rights issue recently and Qantas thinks it either must have government financial support, or alternatively have amended the ownership restrictions of the Qantas Sales Act. They were put in place when the airline was privatised after being state owned.

Qantas announced in December that it was looking at a $250 million – $300 million underlying loss before tax for the six months ending 31 December 2013. Half-year results should be released this month for the exact figure.

Foolish takeaway

Even when companies announce bad news or downed profits, the market is always looking forward. Often the bad news may be accounted for in the share price before the announcement, if prior indications of poor performance are evident.  Therefore with a whiff of good news, prices can move quickly upwards.

As always, buying shares in quality companies is the first priority of intelligent investors, but even a good company can have a bad half year. So when Mr. Market misprices quality stocks, be at the ready to take bargains off his hands.

Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »