With the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) closing higher on Friday, it brings to a close a week which saw the index finish with gains in all five sessions. It would appear investors are bullish on stocks and no doubt positioning their portfolios for the upcoming reporting season.
Despite the rally which has taken the index 3.3% higher over the month of January, February could prove to be even better for the market if investors respond positively to the bulk of companies which are due to report their results.
If you're still wondering how best to position your portfolio for gains this month, consider the following three stocks which one leading global broking firm believes could be set to report earnings above what the market consensus is expecting.
- Sydney Airport Limited (ASX: SYD) – lower oil prices might be playing havoc with oil and gas companies but its great news for motorists, airlines and travellers. The weakening Australian dollar is also a big benefit for overseas tourists considering Australia as a destination. Tallied up, lower oil prices and a lower currency are creating a great operating environment for international travel at Sydney Airport. The flow on benefits from this could include a rise in the dividend above what investors are expecting.
- Genworth Mortgage Insurance Australia (ASX: GMA) – in the broker's view, GMA has a very strong balance sheet which could allow the group to return excess capital to shareholders over the next few years. The release of its full year results – it operates on a December financial year – could lead investors to focus on this appealing possibility.
- Fortescue Metals Group Limited (ASX: FMG) – investors have certainly been factoring in the falling iron ore price but have they gone too far? It's possible that Fortescue's management has done a better than forecast job of reigning in costs which could lead the miner to report higher earnings than the market is expecting.