With the August reporting season finished, the majority of ASX-listed stocks have reported their full year results. For investors, it's now time to concentrate on the outlook statements from management and turn your attention to pricing in expectations for the current 2015 financial year and beyond.
While the market is reasonably efficient, particularly amongst the larger stocks by market capitalisation, at the smaller end, investors who are quick to identify mispricing can find the aftermath of reporting season offers good buying opportunities.
Here are three stocks which stood out to me during reporting season and which I believe have the potential to outperform the market.
Austbrokers Holdings Limited (ASX: AUB) – a leading insurance broker. Its growth rate looks to be declining but revenues and earnings are still growing anyway. There are a number of defensive characteristics about insurance broking which makes this company appealing and with the share price down 9% since January, it's a stock which could be entering buy territory.
Bradken Limited (ASX: BKN) – as a leading supplier of mining and earth moving equipment, Bradken has been exposed to the downdraft of a tightening resources sector. This led to a 43% decline in earnings per share for FY 2014, however management commented that it believes the sector has now passed the de-stocking and order cancellation stage. This suggests a bottom may have been reached and earnings could stabilise and begin to slowly improve for the group from here.
SG Fleet Group Ltd (ASX: SGF) – operates in the novated leasing sector, SG Fleet is a recent listing on the ASX. The group beat its prospectus forecast yet the stock is still trading below its float price of $1.85. With concerns over government changes to regulations being quelled, net cash on the balance sheet and management forecasting profit growth of around 11% in the current financial year, now could be an opportune time for investors to consider adding SG Fleet to their portfolios.
