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.
