With the reporting season now in full swing, many companies are enjoying a surge in share prices on the back of positive reports and improvements in sentiment.
However with so many businesses reporting strong results it can be difficult to pick the real long-term opportunities from a crowd of apparent winners.
Today’s article covers three of the better long-term prospects who released their reports to the market this morning:
AGL Energy Ltd (ASX: AGK)
AGL Energy actually reported to the market last Wednesday – revenue and profit both down a few percent on the previous year – although the company only came out of a trading halt this morning.
AGL announced that its proposed takeover of the Macquarie Generation coal assets in New South Wales was finally approved on appeal, and the equity-funded acquisition will go ahead soon.
An institutional rights-issue placement was completed while the company was in a trading halt, raising $515 million, while the retail entitlement offer to raise $717 million began recently and will continue until mid-September.
With the shares being offered as a 1-for-5 renounceable rights issue at $11 per share, the issue is a significant discount to current prices and provides a great opportunity for shareholders.
Watchers should be secretly hoping that the overall AGL share price trends down to the same levels so they can pick some up for themselves.
NIB Holdings Ltd (ASX: NHF)
NIB Holdings announced another strong result to the market this year, with revenue up 15.6%, although profit only rose 3.9% with higher claims impacting some parts of the business.
Importantly NIB management remains bullish on the long-term prospects of the health insurance business and expects continued growth both organically and through its New Zealand expansion and brand diversification.
The company also announced a special capital return to shareholders of 9 cents per share in October.
NIB Holdings continues its record of outstanding performance, and its strong future potential makes it definitely one for the watch-list.
Beach Energy Limited (ASX: BPT)
After a record production year in 2014, Beach Energy announced revenue rose 51%, while gross profit climbed 78%.
However net profit after tax and significant items was down 34% thanks mainly to a number of non-cash impairment charges related to Beach’s Egyptian and geothermal assets.
Despite a very strong cash position ($411 million cash plus a $300m undrawn debt facility) and total ‘proven and probable’ (2P) reserves of 85.6 million barrels of oil equivalent (Mmboe), Beach has indicated a lower production target of 8.6 to 9.4Mmboe for financial year 2015.
While Beach Energy is one of the ASX’s better – and better known – junior oil producers, it is also fairly well priced by the market most of the time.
In fact its share price has already declined from recent peaks on news that production would be lower in 2015, despite the company’s clear long-term future.
Investors seeking to make their fortune from the black gold might be better served by looking to the next generation of up-and-comers to find that explosive growth potential.
The Motley Fool has recently written a free report on three exciting small-cap oil producers that deserve a place on your watch-list.
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Motley Fool contributor Sean O'Neill doesn't own shares in any company mentioned.
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