At the end of the March quarter now, I'm looking out on the horizon for opportunities in the next six months. The best prospects are those with ongoing growth stories and catalysts to keep the momentum moving forward.
Here are three stocks that are moving earnings up and have solid plans to build growth organically.
Supermarket and general merchandise retailer Woolworths Limited (ASX: WOW) gave us a peek at the number of stores it plans to open just within this financial year – about 108. There will be the regular start-up costs and some divisions like its Masters hardware and DIY stores are still not performing as well as projected.
Woolworths has the finances and expertise to carry it out. During the next six months we should see operating earnings from these stores start to come in. That should give overall earnings a boost and help lift its share price.
Harvey Norman Holdings Limited (ASX: HVN) had good numbers for its interim report. I would suspect that to continue because it has a combination of a rising housing market, low interest rates and improving consumer spending to drive sales.
The company just has to move inventory and hope the Aussie dollar stays relatively high to protect its margins since it would have to pay more for imported goods if the Aussie falls too much.
Energy producer Senex Energy Ltd (ASX: SXY) operates in the Cooper Basin, a region located between SA and Queensland that is attracting a lot of attention in the oil and gas industry for unconventional gas and increasing oil production. The company has the largest acreage position in the basin.
Oil production is way up over the past three years. It has no debt, $102 million in cash as of 31 December and operating costs are $29/barrel.
Conventional gas can be monetised through its joint venture with Santos Limited (ASX: STO) and Beach Energy Limited (ASX: BPT) using existing facilities nearby.
It also entered an agreement with Origin Energy Limited (ASX: ORG) to get financial support for further exploration and evaluation of the findings.
Foolish takeaway
Over the next six months we should be able to see how these stories are developing. There may be delays, as always in business, so the progress of the plans is just as important as the achievements made.
If they are making good headway and share prices aren't reflecting it 100%, investors have more time to assess the situation and build up positions if the prospects look good.
