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

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.

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

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