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Here’s why these 4 shares smashed the market today

Credit: Steve Jurvetson

The S&P/ASX 200 headed up for the first time in over a week today, rising 0.1% after heavy selling in recent days.

A number of stocks significantly outperformed the market today, however.  Here’s why:

Greencross Limited (ASX: GXL) shares soared 28.7% to $5.96 after Fairfax media reported that private equity was interested in the company. One buyer, advised by Credit Suisse, is reportedly in the market for a 10% stake of the company at prices up to 25% higher than yesterday’s close.

Although the rise is promising, Greencross shares still look undervalued and as a shareholder, I wouldn’t be inclined to accept anything less than $7.50 should private equity attempt to launch a takeover.

Shares in Chorus Ltd (ASX: CNU) also soared 26% to $3.59 after the company provided updated guidance for its New Zealand network pricing. Changes to pricing mandated by the NZ Commerce Commission were not backdated, but are still likely to provide a positive benefit of ~$120m to Chorus’ Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA). Despite today’s rise, Chorus is trading on a Price to Earnings (P/E) ratio of around 14 and doesn’t appear expensive.

Adacel Technologies Limited (ASX: ADA) shares lifted 6% to $1.77 after the company announced another contract win on the back of winning its Dallas Fort Worth contract just a few days ago. The air traffic management systems provider has risen more than 600% this year and despite this, its growth story might just be getting started.

Technology One Limited (ASX:TNE) rose 4.5% to $4.69 on no news as investors continue to buy the stock in the wake of a very impressive profit result at the end of November. This is the 12 successive year that Technology One has reported record revenue, and the company’s Software as a Service (SaaS, or cloud computing) offerings continue to be in high demand from customers. Unfortunately, its capabilities are fully recognised by investors, and the stock trades on a P/E of an eye-watering 44x earnings. There are better technology investments out there for the money.

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Motley Fool contributor Sean O'Neill owns shares of Greencross Limited. 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 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.

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