The S&P/ASX 200 (Index: ^AXJO) (ASX:XJO) is down nearly 15% since April with the majority of stocks in the market now trading well below their yearly highs.
It might be hard to believe, but amongst the overwhelming pessimism and fear that has gripped the markets, a number of stocks have continued to climb higher.
Here are four stocks that have managed to buck the trend so far:
1. Hansen Technologies Limited (ASX: HSN) – Hansen is a global provider of billing solutions to clients in industries ranging from electricity to Pay-TV. The company has been growing earnings steadily over the past three years with a number of strategic acquisitions helping to significantly boost revenues. Earnings per share increased by 12% in the 2015 financial year (FY15) and the company is confident of achieving revenue growth of 27% in FY16. It will be interesting to see how much of this is translated into profit but nevertheless, FY16 should be another record year for the company. After a great run, the shares are now trading at around 30x earnings and although the outlook for the company is bright, I believe the shares are fully valued at these levels.
2. Servcorp Limited (ASX: SRV) – Servcorp provides managed office spaces and IT, communication and secretarial services in more than 50 cities around the world. FY15 was a particularly successful year for the company with net profit after tax (NPAT) and earnings per share increasing by 26%. The company also increased its office capacity by 15% with new floors added in key locations such as New York and London. Profits are expected to increase by more than 16% in FY16 and the company is also forecasting the dividend to be at least 22 cents per share. With the shares trading at around 20x earnings, the stock could have further to run, but investors should be aware the shares can trade thinly at times.
3. Bellamy’s Australia Ltd (ASX: BAL) – The share price of Bellamy’s seems to go from strength to strength with seemingly no end in sight. The shares are up a whopping 450% over the past 12 months and the company is now valued at more $700 million. According to its FY15 result, it now commands 56% of the baby food market in Australia, with plans to rapidly expand its business into Asia. The stock now trades at more than 70x FY15 earnings and although the company is expected to grow strongly over the next few years, personally, I find such a premium too hard to justify. The current share price growth appears unsustainable and I would be waiting for a better price before jumping in.
4. Aristocrat Leisure Limited (ASX: ALL) – Aristocrat is one company that did not report its results in August and instead will report its full year results in November. The share price has increased by nearly 50% over the past 12 months and has remained fairly resilient since April. Aristocrat has dominated the Australian gaming machine market for many years and has recently grown its market share in the much larger North American market. Its recent acquisition of VGT will provide the company with recurring and high-margin earnings and the market has certainly welcomed this acquisition with the shares now trading at nearly 23x earnings. Only time will tell, but I believe the shares are priced to perfection and any disappointing results could see the share price fall dramatically.
Motley Fool contributor Christopher Georges owns shares in Servcorp. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia owns shares of Bellamy's Australia and Hansen Technologies. 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.