6 ASX shares you should have bought and 2 to avoid for the rest of 2016

Investors need to make smart investing decisions to avoid being hurt by unexpected falls in revenue and profit at this time of the year.

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The mid-year reporting season is now in full swing and big share price movements appear to be the order of the day for many of Australia’s biggest and best companies.

As long-term investors, we at the Motley Fool always look to invest in companies that will outperform the market over the long term.

6 of the best-performing companies this reporting season have been:

Domino’s Pizza Enterprises Ltd. (ASX: DMP), which rose another 6% yesterday after reporting an increase in revenue of 29.6% to $445 million and a profit of $43.3 million, up 48.8%.

The Reject Shop Ltd’s (ASX: TRS) shares surged 25% higher in early trade yesterday, when the company reported a 43% increase in net profit for the first half of the 2016 financial year.

After a poor start to the year, Coca-Cola Amatil Ltd (ASX: CCL) shares have increased by 10% in a matter of days following a half-year report that showed a 3.1% increase in revenue and a 4.8% jump in net profit.

Investors gave a huge sigh of relief (to the tune of a 28% rise in one day) when Primary Health Care Limited (ASX: PRY) reported volume growth in most segments, despite a small fall in profits.

Despite massive headwinds and a 30% fall in revenue and profit Monadelphous Group Limited (ASX: MND) shares have increased by over 15% this week as investors gained confidence in the company’s ability to win new work in tough times.

Finally, following the 2015-16 trend of China-exposed companies doing well, a2 Milk Company Ltd (Australia) (ASX: A2M) shares posted another 5% rise over the last week during which time the company announced a 86% rise in revenue, 340% rise in baby formula sales and 472% rise in EBITDA!! When will it slow down?!

Sadly however, not all companies perform well during reporting season and this year has been no different. If you own these companies, you need to consider whether they are really worth holding, even though you may be sitting on a significant loss.

Insurance Australia Group Ltd (ASX: IAG) shares have fallen after the company reported a 3.7% rise in revenue but a 20% fall in net profit, while also increasing the dividend. Commentary suggests that the deal with Berkshire Hathaway increased costs for the half.

Woodside Petroleum Limited (ASX: WPL) shares sunk back towards another 10-year low yesterday when the company reported a 36% fall in revenue from just a 3% fall in oil production. The company also, understandably, suggested that growth options locally will be limited while oil prices remain low.

It’s not all doom and gloom though, we at the Motley Fool spend our days looking for great investment opportunities for our readers.

Wondering where you should invest $1,000 right now?

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Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

Motley Fool contributor Andrew Mudie has no position in any stocks mentioned. You can find Andrew on Twitter @andrewmudie 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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