3 promising stocks beating earnings trends

Above average half-year profit growth makes them attractive.

| More on:
a woman

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

One good quarter or half year in business doesn't make a trend, that's why investors have to look into the past three, five or even 10 years to compare results. With the worst of the GFC now behind us, and what seems to be a new business cycle starting, I looked for companies that beat their three-year earnings per share growth trend. I want good growth, yet I want it to be above average to see that trend grow even more.

Crown Resorts Limited (ASX: CWN) has set a lot of business opportunities in motion with a new casino resort opening in The Philippines, operating through its joint venture Melco Crown. A planned second gaming venue in a six-star hotel to be erected at Darling Harbour, and possible entry into the QLD gambling market in the mid-term.

It more than doubled its half-year net profit to member equity holders to $382 million from $180.8 million in the pcp. Its underlying net profit of $315 million was a little lighter than the $328 million analysts expected, but the 29.4% increase from the H1 2013 is still attractive.

There is a possibility it will get a dividend payout from Melco Crown. If it does, then Crown's share is estimated to be about $71.2 million.

Fletcher Building Limited (ASX: FBU), the building materials producer, has benefitted from a housing recovery, and also assisted in the rebuilding of Christchurch after the earthquake devastation. Over the past three years the reported adjusted EPS growth trend was an average annual 4.5%, but in H1 2014, adjusted EPS grew by almost 25%.

Since mid-2012, its share price has doubled to $9, but with the housing market still not in full swing nationwide, there is more potential growth in earnings.

Platinum Asset Management Limited (ASX: PTM) grew its total funds under management over the first half of FY2014 from $19.7 billion to $23.2 billion, which did wonders for earnings. Its interim net profit shot up 68% to $105 million.

It had a three-year interim EPS growth trend of about 10%, but the half-year in H1 2014 has achieved EPS growth of 61%, and that's good in any book. The fund manager hit a high of $7.56 a share this week.

Foolish takeaway

Sometimes we can locate points where the earnings trends are beginning to inflect upwards after a period of downward or flat movement. When the average trend and the most recent result vary greatly, you want to take notice of those companies.

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 »