Reporting season is nearly over and there have been a lot of double digit reactions either upwards or downwards, certainly more than compared to the last few reporting seasons. Volatility really is back. I think that's a good thing for people who are net buyers of shares.
Those share price reactions have offered up some interesting opportunities. Seeing the reports gives investors a good idea of value and expectations for the rest of the financial year.
If I had $10,000 to invest in shares today, here's how I would do it:
National Veterinary Care Ltd (ASX: NVL) – $4,000
National Veterinary Care reported today and investors weren't impressed, sending the share price down by almost 10%. The report wasn't great, but I don't think it was bad either. Ultimately, the statutory profit figures grew and that's the most important thing.
The underlying figures were a little disappointing but management said this was because of investing for future growth and that the next six months will get better. National Vet Care is trading at roughly 24x F18's estimated earnings, which seems like a decent price to pay for a business that could grow strongly from here.
BWX Limited (ASX: BWX) – $2,500
BWX was another business to see its share price hit heavily after its report with acquisition costs included and lower organic growth than expected. The share price has recovered some of the loss but is still trading a lot lower than before.
I think there's a lot to like about BWX with a multitude of product ranges and geographies to grow its revenue. Economies of scale should play a big part for BWX as it expands in Australia, USA and other countries.
Indeed, the USA opportunity is huge with how big the population is. Beauty trends are changing and I believe BWX is well placed to capture the shift to natural products.
It's currently trading at 27x FY18's annualised underlying earnings.
Magellan Global Trust (ASX: MGG) – $3,500
This listed investment trust (LIT) is run by Magellan Financial Group Ltd (ASX: MFG) and uses the same market-beating investment process as its unlisted fund counterpart.
I like Magellan Global Trust because it gives investors exposure to some of the most exciting stocks in the world whilst also trying to protect capital with a portion of the portfolio allocated to cash.
Most Aussie investors could do with more of their portfolio exposed to overseas investments and I think this trust is an excellent way to get that diversification.
It's currently trading slightly under its underlying value per share.
Foolish takeaway
I'd be very happy to invest $10,000 in the three shares I mentioned above, I believe all three will comfortably beat the ASX indexes over the long-term.
