February is such a busy time with so many companies reporting their earnings results that it’s easy to get swamped and miss opportunities. Wednesday was such a day with an enormous number of results to get. Here are five results which could potentially lead to some interesting investment opportunities.
1) Data#3 Ltd’s (ASX: DTL) shares sank 5% and touched a new 52-week low after the company reported a 62% fall in profits to $2.6 million and a 56.5% cut in the dividend to 1.5 cents per share. While the results and outlook were far from rosy, with the share price at not just a year low but a multi-year low, it could entice value investors.
2) Bega Cheese Ltd’s (ASX: BGA) shares rallied 3.9% and touched a new 52-week high after the company reported an 18% increase in profits to $18.7 million and stated that it expected to experience continued growth in earnings in the second half.
3) Fortescue Metals Group Limited (ASX: FMG) saw its shares fall 2.3% to $5.84 despite reporting a 260% increase in profits to US$1.7 billion on the back of a record revenue of US$5.9 billion. A slide in the results presentation highlights management’s view that Fortescue offers compelling value. For investors who agree with this analysis, the weakness in the share price could certainly be an opportunity.
4) Suncorp Group Ltd’s (ASX: SUN) shares fell 2.8% after the group reported a ‘business line’ profit which was 4% below the prior corresponding period and significantly below consensus. The market was obviously unenthusiastic about the results which came in below expectations, however the company’s outlook for the remainder of 2014 perhaps went some way towards boosting confidence in the stock.
5) Reject Shop Ltd (ASX: TRS) had already lowered the market’s expectations after the discount retailer released a trading update on 24 January. With the stock trading close to its 52-week low and down 36% for the year, the market was probably relieved to see the company come in at the top end of its revised guidance.
Reporting season can sometimes lead to a ‘shoot first, ask questions later’ mentality. From time to time this will offer up good companies at compelling prices which is why it’s important for investors to stay on top of the deluge of information and share price movements which occur during these periods.
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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.