Why these 4 ASX shares soared higher today

Is this a sign of things to come for Domino's Pizza Enterprises Ltd. (ASX:DMP), Crown Resorts Ltd (ASX:CWN), Santos Ltd (ASX:STO), and BHP Billiton Limited (ASX:BHP)?

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

After more than a week of heavy selling, the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) index finally entered positive territory, gaining more than 2% to rise above 5000 points.

The best investors know that there's often no rhyme or reason to these day-to-day movements, and instead use the vagaries of the market to get a better price for companies they are buying or selling.

Here are four companies that smashed the market today:

Domino's Pizza Enterprises Ltd., (ASX: DMP) rose 9.1% to $53.85 after yet another expansion was announced, this time into Germany through a joint-venture with UK-listed Domino's Pizza Group Plc.

The expansion is expected to add a further 4-5% increase to Domino's earnings per share assuming the transactions settle in early 2015. Domino's has certainly been on a cracking run in the past few years, but investors would do well to remember that as the company gets bigger, its ability to 'move the dial' through acquisitions becomes limited both by its size and its funding options.

Trading on an exorbitant trailing Price to Earnings (P/E) ratio of 73, savvy investors might be better off looking for the next Domino's, rather than trying to buy this one.

Crown Resorts Ltd (ASX: CWN) soared 13.8% to $12.11 after media reports surfaced indicating that some assets may be sold to private buyers. Much like private equity interest recently announced in Greencross Limited (ASX: GXL), the news has acted as a catalyst to spur Crown's share price after more than a year down in the doldrums.

After a year of takeovers and buyouts, investors are greedily hoping for more mega-deals, which may be forthcoming given that the Australian dollar has plunged against the US dollar. Either way, Crown doesn't look overly expensive even after today's rise.

Santos Ltd (ASX: STO) lifted 5.3% to $3.45 after the price of oil rose overnight, providing some much-needed relief to nervous shareholders who have lost more than 15% of their investment in the last month alone. Future rises or falls depend almost entirely on the price of oil, and there is a curious disconnect between comments from major banks around the world and statements from oil cartel OPEC.

Many global banks have indicated the oil price could fall further, to US$35/barrel or even US$25 a barrel, yet the Secretary General of OPEC is on record as suggesting low oil prices will not continue and could rise in a few months to a year.

I'm inclined to listen to the guys who drill the oil, and this could be a development worth watching closely.

BHP Billiton Limited (ASX: BHP) shares also gained 5.4% to $17.15 on the back of a rising oil price as well as news that the US could begin exporting oil in an attempt to alleviate a storage glut that is depressing prices on American crude oil. BHP owns a number of oil and gas producing shale assets in the USA.

While this could offer a short-term reprieve, the value of other resources such as natural gas and copper have fallen in recent days and the overall result is likely to be an unchanged outlook for BHP, which I would not recommend buying today.

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.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »