The S&P / ASX 200 (Index: ^AXJO) (ASX: XJO) posted a 7-year high in lunchtime trade as investors eye-up the potential for the Reserve Bank of Australia to cut interest rates tomorrow. That hasn't stopped these four businesses heavily outpacing the market's returns as investors look to their potential for further gains. Let's take a look at what's behind the buying.
Macquarie Group Ltd (ASX: MQG) is up 2.6% to a multi-year high of $74.74 as its decision to lift its dividend payout ratio over the last couple of years encourages investors to buy the stock in a low cash rate environment.
Macquarie has reportedly restructured its remuneration policy since the GFC to encourage more employee share ownership and while it's unlikely the average staff member's ego will need a boost ahead of bonus season, the outperformance of the shares is likely to provide it.
Santos Ltd (ASX: STO) has climbed 1.5% in afternoon trade to $8.06 as Brent crude prices firm around US$62 per barrel. The stock recently went without the rights to its 15 cent interim dividend and looks cheap if you take the view that global oil prices will rebound on a supply-side reorientation. Investors will also be looking to the second half of 2015, when its giant Gladstone LNG project is expected to swing into action.
Domino's Pizza Enterprises Ltd (ASX: DMP) has climbed 4.8% to $36.55 today despite releasing no specific news to the market. The pizza delivery store owner and franchisor has found a recipe for growing profits by increasing store counts and expanding overseas. The company has developed some brand power and is able to sell pizzas profitably at cheap prices which have left competitors feeling the heat.
In the most recent half earnings per share were 33.8 cents, which on an annualised basis would mean the stock sells for 55x earnings when trading for $36.55. That's no bargain and any sign of weakness could see it come crashing back to earth.
Martin Aircraft Company Ltd (ASX: MJP) has more than doubled in price today to close at $1.75 having hit the ASX boards last week at an initial public offer price of just 40 cents. The jetpack business has more than quadrupled in price since then as its share price mirrors its fast-rising jetpacks. Investors and jetpack pilots will be keen to avoid a hard landing, but given the futuristic nature of the business it could be one to watch.
