IDP Education Ltd (ASX: IEL), Reliance Worldwide Corporation Ltd (ASX: RWC) and Lovisa Holdings Ltd (ASX: LOV) are three companies that are worth a closer look, especially as the Australian dollar moves back to 76 cents. Although the dollar’s recovery could be short-lived, these companies are well managed mid-caps that have a durable product that they have been able to move into offshore markets. The three companies are operating in very different industries but share a strong share price performance on the back of bright earnings’ outlooks and financial constraint.
IDP Education is an exporter of education that provides international student placements at Universities and English-language testing services in 50 countries. Expansion offshore is high on the agenda with acquisition of a stake in HCP Limited, a Chinese company that specialises in providing English-language test-preparation material. As well, IDP has recently partnered with Cognizant, a US company, to build a global platform for students. Another positive is the company is about to enter the S&P/ASX 200 (ASX: JXJO) which will most likely boost demand for its shares.
Reliance Worldwide Corporation designs, manufactures and supplies plumbing products to be predominantly used in residential repair and renovation projects. Reliance has managed to penetrate the US market through Home Depot and Lowe’s network primarily with a product called SharkBite, which is being increasingly favoured by plumbers. The company plans to continue its offshore expansion organically and through acquisitions.
Lovisa Holdings is a mid-cap jewellery retailer that has also been successful in moving into offshore markets. Dealing in disposable fashion the company can respond quickly to changes in demand and trends. Since presenting at the Macquarie Conference earlier in the month the share price is up 20%. Improving margins for 1H18, net profit up 22% compared to 1H17 as well as a broad global reach and no debt, are all positives.
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Motley Fool contributor Rosemary Steinfort has no position in any of the 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 Scott Phillips.