Integrated Research Limited down 15%: Is it time to buy?

Integrated Research Limited (ASX:IRI) could represent value at current prices after recent results disappointed the market.

| 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

Despite mounting evidence that it's not the most effective way to invest, many investors still adopt a 'buy on good news, sell on bad news' mentality that disrupts the potential of a long-term buy and hold strategy.

It's something we've all been guilty of at one time or another – I've done it myself – but it's especially apparent in those businesses that have lumpy earnings.

Take a quick look at Integrated Research Limited's (ASX: IRI) price chart over the past year to see what I'm talking about.

When 1H profit guidance was released in January and indicated that profit would rise more than 64%, shares in Integrated jumped 15% to $1.20.

Seven months later when full year profit guidance is released (indicating that final profit will be down 8%), investors jump ship, sending the company's price back to its January levels.

In the full-year report released today, investors can see that revenue rose 9% with increases across all categories; Licensing, Maintenance and Consulting.

However revenue growth was largely matched by increased expenses in R&D, sales and marketing and general/admin expenses.

The real reason for the decrease in profit was a net shift of -$0.8 million in currency exchange gains, down from $0.591m to -$0.364m.

Investors will note that overall profit (down 8%) is down almost exactly $0.8m from the previous year's results, although management also points out that a lack of large licensing sale contracts in the second half is a major contributor to lack of growth.

If I was closely awaiting the opportunity to pick up some shares in Integrated Research, do you know what this state of affairs would say to me?

Buy!

This business has long-term potential and the flirtations of investors who buy good news and sell bad should be looked at (in this case) as an opportunity to pick up a few shares on the cheap.

Lumpy earnings don't necessarily suit every investor however, so we've come up with another buying opportunity for you – except this one's tucked away in our highly secret (just kidding!) Top Stock for 2014-2015 report.

It's a company I already own, and one that belongs in every portfolio by virtue of its unique way of drawing earnings, earnings that benefit in times of both low and high interest rates, boom-times and downturns.

It boasts a consistent track record of profit and dividend growth, and trades at a fair valuation to boot.

If you're interested, simply click on the link below and enter your email address – it takes less than 30 seconds – and we'll send it to you, completely FREE!

Motley Fool contributor Sean O'Neill doesn't 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 »