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10 big winners that smashed expectations this earnings season

On Friday we looked at some of the biggest losers of the February earnings season so far, mostly unfortunate cases where expectations didn’t match up with performance. Now on a more positive note, here are 10 of the biggest winners over the past month:

Bluescope Steel Limited (ASX: BSL) – up 10%

In 2014 I saw a presentation from a fund manager explaining that Bluescope Steel was grossly undervalued. To my great regret, I never followed this manager’s analysis and Bluescope shares have more than doubled in that time. The company’s latest report was also a strong one, with profits rising 79% and higher dividends and a share buyback announced.

Estia Health Ltd (ASX: EHE) – up 14%

Estia shares rose strongly after yesterday’s report suggested the company is on a much better trajectory, with half-year profit growth and a stronger balance sheet thanks to a recent capital raising. Although concerns remain about the company’s balance sheet, its occupancy levels, and possible changes to government rebates, fresh management appears to be just what the doctor ordered for Estia.

Mayne Pharma Group Ltd (ASX: MYX) – up 16%

Despite a complete lack of reaction to Mayne Pharma’s results this morning, shares are still 16% higher over the past month as investors realise that potential changes to drug reimbursements in the U.S. may not be as severe as previously indicated. However, the Mayne Pharma share price has proven highly sensitive to news of regulatory investigation and lawsuits in recent times to suggest February’s gains could be short lived.

McMillan Shakespeare Limited (ASX: MMS) – up 9%

Much like the other winners, McMillan Shakespeare’s share price rise is due to a strong result, although contributor James Mickleboro noted some signs of weakness in Retail Financial Services and the core Group Remuneration Services segments.

Monadelphous Group Limited (ASX: MND) – up 20%

Shares in Monadelphous enjoyed a momentous February after a strong market response to its results release took the shares’ full-year gains to 77%. However, as contributor Rachit Dudhwala noted, the company does not look to be an opportunity. A share price is only cheap if profits aren’t falling, and Monadelphous’ net profit of $28 million at the half year is drastically down on last year’s result.

NIB Holdings Limited (ASX: NHF) – up 12%

Again, a strong profit sent NIB shares to a new all-time high. What I think really struck home for investors was how much better its results were compared to major competitor Medibank Private Ltd (ASX: MPL). I’m not buying NIB due to its valuation, but it certainly appears a good business.

SEEK Limited (ASX: SEK) – up 10%

SEEK shares are up in February predominantly due to news that the company wants to privatise its Chinese jobs portal Zhaopin, since the company’s actual half-year results were ordinary. Although investment in new ventures is high and bears some promise, it’s also impacting on the company’s profitability.

Seven Group Holdings Ltd (ASX: SVW) – up 33%

Seven shares have climbed in the past month to take their total gains for the year to over 100%. A recently announced buyback for up to 6% of its issued capital may have had something to do with the rise since the result itself looked weak with revenue and profits both falling. At least one broker thinks Seven is a buy up to $8.50, as a result of the expected recovery in mining expenditure.

Warrnambool Cheese & Butter Factory Co. (ASX: WCB) – up 27%

One of the few winners not soaring on strong results, Warrnambool Cheese shares leapt a vertical cliff the other day after Japanese bidder Saputo stepped up its bid from $8.85 per share to $9.05 per share. With Saputo holding 98% of the company already, Warrnambool shares will soon de-list from the ASX.

Webjet Limited (ASX: WEB) – up 10%

Webjet shares shot higher with huge growth in Total Transaction Volume (TTV) and net profit according to its recent half-year result. Although growing rapidly and expanding its market share, TTV of $900 million is still a drop in the bucket compared to the size of the global travel market. Webjet could have a long runway ahead of it and may be worthy of closer investigation.

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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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