Today was a down day for the S&P/ASX 200 (INDEXASX: ^AXJO) (ASX: XJO), which fell 0.9% to 5,310 points.
A number of shares significantly outperformed the market however, and here’s why:
Rhipe Ltd (ASX: RHP) jumped 8% to $1.07 on the back of a positive third quarter trading update yesterday, which revealed some interesting things about the business. The company’s top-10 customers represent 33% of sales and are growing at 45% compared to the prior period. Customers outside the top 10 make up the remainder, and are growing at 42%. This is all good, but gross margins including the top 10 customers are a razor-thin 3.6%, while excluding the top 10 they are a decent 20.6%.
Rhipe shares are down 35% in the past 12 months.
Collins Foods Ltd (ASX: CKF) gained 8% to $4.56 after the company announced the acquisition of 13 new KFC restaurants in New South Wales and Victoria. The acquisition will take Collins’ total number of restaurants to 191, and will be immediately earnings accretive as well as offering the opportunity for synergies and some margin improvement. The purchase price is $25 million, and will be partly funded by $10 million worth of shares and the remainder from existing funds.
Collins Foods shares are up 82% in the past 12 months.
James Hardie Industries plc (ASX: JHX) was up 7% to $20.26 after it released its fourth quarter results to the market this morning, which revealed a 10% increase in full-year operating profit. This was predominantly a result of higher volumes, although margins also remained strong. The strong US dollar had an impact on results, although a new manufacturing centre and a positive outlook for the US housing market next year could be tailwinds in Financial Year 2017.
James Hardie shares are up 34% in the past 12 months.
JB Hi-Fi Limited (ASX: JBH) rose 4% to $23.73 after the company released an announcement saying that it was in preliminary talks to acquire The Good Guys, the electronics and home goods retailer. After media speculation JB Hi-Fi was forced to admit that it was in preliminary talks, although no binding agreements have been reached and The Good Guys is considering a number of avenues to generate value, including a potential public listing. While a tie-up would make some sense, any eventual agreement is far from certain.
JB Hi-Fi shares are up 11% in the past 12 months.
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Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. 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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