The biotechnology company Sirtex Medical Limited (ASX: SRX) made substantial gains in its business with half-year revenue up 27.2% to $58.6 million. The maker of targeted cancer treatments has been growing earnings steadily over the past two years, and in the first half of FY2014 net profit climbed 43.6% to $11.2 million.
Its sales in the Americas and Asia Pacific achieved the most growth, and total sales by dosage units have been rising by a compound annual 18.1% growth rate. Liver cancers are common now because of our eating and drinking habits, and the company’s technology allows the cancer treatment chemicals to be delivered to target cancer cells without the need for wider, more general radiation or chemotherapy.
Crown Resorts Limited (ASX: CWN), operator of the Crown casinos as well as joint owner of the City of Dreams casino in Macau, had an equally pleasing 29.4% increase in half-year underlying net profit, up to $315 million on the pcp.
A large proportion of the increase comes from the equity accounted profit of $140.6 million which it recorded from its joint venture business Melco Crown. The JV is currently expanding into other countries in South-East Asia, TO develop a new brand of integrated resorts called “City of Dreams”. The Asian market is ripe for growth as more Chinese tourists visit Macau or travel further abroad in the region. In addition, developing countries like Vietnam or the Philippines are opening up to more casino and hotel development. Japan itself, which has no major casino industry, may relax gambling legislation, giving the company and its JV another big market to potentially enter.
Watching earnings season provides a wealth of investing ideas, but don’t just go after the ones with the biggest half-year or short-term gains. Check on the stability and consistency of earnings. Setting high targets may reduce the playing field to a small number of stocks, but the ones that remain are usually better in the long run.
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