Reporting season can see short-lived surges and slumps in share prices as investors react to company news and financial fundamentals. These 3 shares are sitting at 52-week highs. Here’s some insight into why. Baby Bunting Group Ltd (ASX: BBN) Baby Bunting shares are up 0.8% to $2.50 at the time of writing – a 52-week high. Shares in small cap retail chain Baby Bunting Group Ltd shot up 41% off the back of the release of its FY18 results on August 10 despite reporting a 18.9% drop in pro forma EBITDA to $18.6 million. But investor confidence is strong, as…
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Reporting season can see short-lived surges and slumps in share prices as investors react to company news and financial fundamentals.
These 3 shares are sitting at 52-week highs.
Here’s some insight into why.
Baby Bunting Group Ltd (ASX: BBN)
Baby Bunting shares are up 0.8% to $2.50 at the time of writing – a 52-week high.
Shares in small cap retail chain Baby Bunting Group Ltd shot up 41% off the back of the release of its FY18 results on August 10 despite reporting a 18.9% drop in pro forma EBITDA to $18.6 million.
But investor confidence is strong, as several baby goods rivals, one being Toys “R” Us, have closed across the country during the FY18 year.
FY19 EBITDA is expected to be in the range of $24 million to $27 million – representing growth of between 30% and 45% – and gross profit margin is expected to recover to be up 34%. In terms of sales, Baby Bunting managed to push overall figures up 9% to $303.1 million
If Baby Bunting can continue to consolidate its position in the market and leverage off the demise of its rivals things could look bright for its FY19 results.
The company is increasing its focus on its online offerings with FY18 online sales up 63% – making up only 9.5% of sales – meaning there is plenty of room here for improvement.
With 48 stores across Australia and three planned for opening in 2019 comparable store sales growth is expected to be mid to high single digits for the year.
One to watch.
Nanosonics Ltd (ASX: NAN)
Shares in emerging infection prevention company Nanosonics Ltd are up 2.1% to $3.51 at the time of writing – a 52-week high for the stock.
Investors could be rallying behind the stock in the lead up to the release of its annual report on August 23, with the expectation the company will have a rosy forecast for FY19 off the back of its recent launch of its Trophon platform device into North America and Europe.
Nanosonics operates in an interesting niche, with infection control practices becoming more relevant on a global stage.
But even the smallest hiccup can derail players with narrow focuses, and the success of its overseas expansions will play heavily into its ability to boom or bust in the short-term future.
For now, Nanosonics is still very much in the speculative space, but with an expanding global footprint there certainly appears to be interest in its offerings from a solid base of customers.
With plenty of efforts still going into research and development I think Nanosonics is one to keep an eye on, but perhaps not one to buy while it’s sitting up this high and certainly not until its results come to pass.
Wesfarmers Ltd (ASX: WES)
Shares in supermarket giant Wesfarmers Ltd are up 3.4% at the time of writing to $52.33 – a 52-week high for the stock as the company handed down its FY18 results.
Despite its rallying share price Wesfarmers has reported a FY18 profit drop of 58% as the failed Bunnings UK business took a hefty slice out of its profit pie, with struggling Target stores on home soil not helping to bolster the bottom line.
Shareholders were no doubt pleased with Wesfarmers’ declaration of a $1.20 per share fully-franked final dividend – which brings total dividends in line with last year – and Bunnings and Officeworks both managed to increase profits by 12.7% and 8.3% respectively, despite Coles suffering a profit drop of 6.8%.
Wesfarmers’ managing director Rob Scott said the company is now focused on the successful demerger of Coles, giving Wesfarmers shareholders “better exposure to the high-growth businesses of Bunnings, Kmart and Officeworks”.
Target results will be reported separately in the next fortnight.
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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nanosonics Limited and Wesfarmers Limited. 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.