Reporting season is an exciting time for investors as they see how their favourite companies have performed. Having a winner in your portfolio helps make up for another stock that has lagged recently. This month we have seen a lot of companies with higher revenues and earnings, but how have their share prices been doing?
Sometimes the market is already expecting a certain amount, and when it is confirmed around that value, company share prices may slip because investors “bought the story and sold the news”. So let’s step back and see how three companies have been making big moves over the past three months.
Newcrest Mining Limited (ASX: NCM) has gained 21.7% in share price, up from $9.16 to $11.15 currently. Two major factors have been the resurgence in the gold price and its report that the all-in sustaining costs of all its mines are now below the average realised sales price.
Gold is making a comeback with spot prices up around US$1,320, but in November and December it was on its way to possibly fall through US$1,200, which had investors fleeing gold and gold miners.
The market was surprised to get such a half-year report, showing that the overall all-sustaining cost for its mines dropped 18% to A$1,003 and gold production for the period ending in December was up 27% to 1.207 million ounces.
If gold resumes its climb and Newcrest continues processing its higher grades of ore more to reduce its production costs, then 2014 could be a turnaround year for the gold miner.
Navitas Limited (ASX: NVT), the global education services provider, had solid revenue gains in its three business segments, especially in its largest segment of university programs. It opened two new colleges and saw overall enrolment up in its key areas, in addition to achieving significant fee growth.
Its share price is up 22.2% to $7.19 since 19 November. The company’s FY2014 EBITDA guidance is for $138 million – $148 million. Its FY2013 EBITDA were $130 million.
SEEK Limited (ASX: SEK) has been making changes through the sale of assets and acquisitions recently. It completed its sale of THINK Education Group for around $99.5 million in December and before then moved to a controlling interest in Zhaopin, the Chinese online employment portal, which supposedly has plans to list in the US this year. It also increased its interest in JobsDB, another Asian jobs listings portal, to 69% in FY2013.
It is growing its jobs services out to cover the largely populated Asian region and this week announced another big move. It wants to acquire JobStreet, the online employment service based in Kuala Lumpur for $580 million. It already owns a 22% stake in the company and to purchase the remaining interest will require regulatory approval in Singapore, as well as the company’s shareholders approving such an acquisition.
The company is making the right moves by buying into established businesses with local experience and cultural knowledge, rather than attempting to start a new business in what could be a very competitive market. Seek’s share price over the past three months has climbed 27.1% to its current $15.70.
Of these three, I am most impressed by Seek and I expect to see more growth from the company. Asia is a vast market with three of the four countries with the largest populations in the world. As these economies develop more, Seek has a good chance of establishing a market foothold through these and future moves.