The 4.4% rise of the S&P/ASX200 (ASX: XJO) (Index:^AXJO) in July was pretty extraordinary considering the issues surrounding Greece, China and the US created an unusual amount of volatility.
Source: Google Finance
Data#3 Limited (ASX: DTL)
Data#3 is a technology company that operates in a number of segments including software licensing, hardware management, IT support and business management solutions. Some of the company’s customers include major financial intuitions, hospitals, governments and multi-national corporations.
During 2013, Data#3 was struggling to grow earnings as a number of its customers were delaying their decision to make new investments and in May 2014, the share price had fallen to as low as 54 cents. Since then, earnings started to stabilise and are now showing signs of good growth.
In July of this year, the company announced it expected FY15 net profit after tax (NPAT) to be between $10 million to $11 million which was significantly higher than the $7.5 million reported in FY14. Following this, the share price increased by as much as 25% and in now trading around 95 cents per share.
Based on the expected NPAT, the shares are trading at under 14x earnings and investors can expect a pretty healthy dividend when the company reports its full year results.
Webjet Limited (ASX: WEB)
Webjet enjoyed a huge resurgence during July as investors welcomed some good news from the online travel agent. The share price increased by more than 43% at one stage and finished the month with a 38.8% gain.
The reason behind this move upwards was management’s update that showed a 41% increase in total transaction value (TTV) for the six months to 30 June 2015. With major competitor Flight Centre Travel Group Ltd (ASX: FLT) struggling to meaningfully grow its own revenues, this was seen as an excellent result in a difficult environment.
Investors also cheered the news that earnings guidance for the full year was re-affirmed and possibly more importantly was the fact that margins were maintained during the period.
Following the huge spike in the share price, Webjet is now trading on a P/E ratio of around 18 and should provide investors with a fully franked dividend yield of around 3.3%.
Integrated Research Limited (ASX: IRI)
Integrated Research is a technology company that provides performance management and diagnostic solutions through specialised software platforms. More than 1,000 businesses in over 60 countries rely on Integrated Research’s real time help for the continual operation of their systems and diagnosis when something goes wrong.
The stock has been a great performer over the past 10 years with an average total annual shareholder return (dividends + capital gain) of 24.1% each year. This history of strong returns continued in July, with the share price increasing by nearly 32%.
The reason behind this extraordinary move was Integrated Research’s announcement that it expected NPAT to increase by up to 70% in FY15 thanks to very strong sales across all of its product lines. With significant operations abroad, the depreciating AUD also helped to push profits higher.
Although the company is expected to deliver strong earnings, the shares are by no means cheap and are currently trading at more than 25x earnings.
Sure, Data#3, Webjet and Integrated Research had a great July but if you are looking for what could be the best performers in August then look no further!
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Motley Fool contributor Christopher Georges owns share in Flight Centre. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.