Although it can be nerve-wracking, earnings season can also be an incredibly exciting time of year for investors. After months of guessing as to how their investments are performing, companies will finally deliver their half-year or full-year earnings results over the next four weeks which could see their share prices skyrocket.
For investors who are keen on capitalising on some strong results this February, here are three companies which I believe could deliver a positive earnings surprise…
1. Veda Group Ltd (ASX: VED)
Veda Group, which listed on the ASX in December 2013, is Australia's largest data analytics business, operating as a monopoly in its industry. The company released its full-year earnings results in August, revealing a 12.4% increase in revenue for the year and a 21.7% increase in operating earnings before interest, tax, depreciation and amortisation (EBITDA).
Commenting on the outlook for the 2015 financial year, Veda Group's CEO said: "We envisage continued revenue growth across all business lines including a strong expansion of B2C and Marketing Services. This should deliver at least low-double digit EBITDA growth in FY2015 and broadly commensurate growth in NPAT (net profit after tax)".
The stock has essentially moved sideways since that day but a positive earnings result could certainly see it shoot higher.
2. Cover-More Group Ltd (ASX: CVO)
Australia's largest travel insurance business listed on the ASX around the same time as Veda Group. Although the stock has, at times, shown signs of exploding, it has once again retreated to be trading at just an 8% premium to its original opening price.
The stock has been particularly weak over the last five months, having dropped nearly 23% in that time. This has largely been a result of concerns regarding the growth in outbound travel as well as a profit downgrade from Flight Centre Travel Group Ltd (ASX: FLT), which is Cover-More's major partner.
Despite these concerns, the company has reiterated its own profit guidance and could surprise on the upside.
3. Nearmap Ltd (ASX: NEA)
Nearmap is a small-cap provider of ultra-high definition aerial photographs. Indeed, the company's technology has proven incredibly successful in Australia while it is also expanding into the much larger US market.
While the company delivered its maiden profit last year, the market will likely focus more on revenue and subscription growth while it will also pay close attention to an update on its international expansion. In an update to the market in December the company said it was tracking ahead of expectations on the expansion while it remained within the original budget of $8 million.
With the shares having fallen 33% over the last three months, Nearmap's shares could certainly jump on a strong earnings report.
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