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Is there any value in Carsales.Com Ltd, Infigen Energy Ltd, and Fisher & Paykel Healthcare Corp Ltd?

Credit: NRMA Motoring and Services

One interesting fact about investing is that there’s no such thing as ‘bad’ news – what’s good or bad depends entirely on where you have your money.

So while the recent sell-off of the S&P/ASX 200 might seem savage, shareholders in the following few companies are likely as happy as Larry:

Carsales.Com Ltd (ASX: CAR) – last traded at $11.14, up 9% for the year

Carsales has spent much of the year trading within a tight $9.50-$11 range, so the recent rise isn’t much to crow about, although it does represent a 15% increase since October. Although Carsales.Com isn’t conventionally cheap (either on a P/E basis or compared to similar companies) at today’s prices, the stock appears likely to outperform over the long term due to network effects, value-adding opportunities and its international expansion.

In the near term I don’t believe Carsales shares will head any higher until the market sees signs of continued revenue and profit growth. Over the next decade it is likely to be a different story.

Infigen Energy Ltd (ASX: IFN) – last traded at $0.46, up 84% for the year

Shares in wind farmer Infigen Energy enjoyed strong interest recently after a successful resolution to the climate change talks in Paris on Monday. While shares are no longer as undervalued as they appeared at the start of the year, it’s my opinion that Infigen trades roughly around fair value today.

Where shares head from here will depend in part on future legislation – which has impacted revenues recently – and the value of clean energy certificates as well as several other factors like interest rates and the cost of development of new projects.

I believe that Infigen shares are likely to head higher in the near future if renewed interest in clean energy really picks up, but I don’t know that it is a good buy at today’s prices.

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) – last traded at $7.88, up 37% for the year

Fisher & Paykel Healthcare set another new high this week, with shares still rising on the back of great half-yearly results released in November. While the company has been a standout performer in recent years, I believe its run is coming to an end as growth is slowing yet its share price remains quite high.

There is a solid amount of growth potential that could be realised from both new products and new markets, as well as in-company initiatives like shifting manufacturing overseas. For this reason, I would not sell Fisher & Paykel, although trading on a trailing Price to Earnings (P/E) ratio of 40 it’s hard to argue that the company is a good purchase today.

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Motley Fool contributor Sean O'Neill owns shares of carsales.com 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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