With reporting season in full swing, investors can feel overwhelmed with the myriad of companies to watch and the endless amount of information to process.
To help you prioritise, here are 4 ASX stocks I think you should watch this week.
BHP Group Ltd (ASX: BHP)
Mining giant BHP is set to report full year earnings today. After the iron ore spot price surged for the best part of this year, BHP could follow in the footsteps of fellow mining giant Rio Tinto Limited (ASX: RIO) and beat market expectations. Strong commodity pricing should see a beat on capital return to shareholders whilst also allowing BHP to cut debt and re-order the company's balance sheet.
Market consensus estimates that BHP should deliver net profit after tax (NPAT) of US$1.235 billion for FY19.
A2 Milk Company Limited (ASX: A2M)
Last month, a2 Milk issued a strong third quarter trading update, reporting a 44% lift in revenue. The infant powder and milk producer continues to grow its market share in China and also announced the addition of 300 stores to its distribution network. The company also unveiled new products including a coffee creamer product for the United States (US) market and its 'Smart Nutrition' fortified milk powder for kids aged between 4–12, targeted to Australia and China.
Analysts at Morgans have listed a2 Milk as a stock to watch this week that has the potential to beat market expectations. Recent share price strength implies good revenue growth and a 30% earnings before interest, tax, depreciation and amortisation (EBITDA) margin.
Nearmap Ltd (ASX: NEA)
Nearmap has had an explosive 2019, with the company's share price doubling this year. The bullish price action has been on the back of phenomenal growth, new product launches and success in the US. In FY19 Nearmap reported a record annualised contract value (ACV) of $90.2 million, a 36% increase from the previous year. Following the company's strong performance in the US, analysts are optimistic on the outlook for Nearmap as the company looks to further expand globally.
Market consensus estimates that Nearmap should deliver NPAT of $4.4 million for FY19.
Audinate Group Ltd (ASX: AD8)
Audinate has had a huge run in 2019 and is set to report at the end of the week. The company is a fast-growing provider of hardware and software solutions to the audiovisual (AV) market. Audinate's flagship Dante program has becomes a global leader in AV connectivity and the company has set key priorities to underpin growth in FY19. Early last month, analysts at Morgans initiated coverage on Morgans with and 'overweight' rating and a price target of $10.30. The broker expects strong sales growth in audio, software sales and revenue from Audinate's expanded video offering.
Should you buy?
Given the volatile nature of reporting season, I think it's unwise to buy shares in a company before they report. The more prudent strategy for investors would be to wait for each company to report and see how the market interprets the results before making an investment decision.
