FlexiGroup Limited (ASX: FXL) and G8 Education Ltd (ASX: GEM) are 2 ASX 200 companies that might have caught the eye of investors looking for lower cost shares with upward movement last week, with the share prices of both companies rising more than 9% since last Monday.
Flexigroup and G8 Education’s share prices now sit at $1.84 and $2.48, respectively (at the time of writing). Considering that buying one share in either of these companies will essentially only cost you a handful of pocket change, let’s take a closer look at their recent performances.
Flexigroup Limited is a financial services group offering consumer and commercial leasing, interest free finance products and no interest ever products.
The group’s FY19 results have been met with overwhelming positivity from the market. Customers are up 8% to 1.76 million, 5,000 additional retail partners have been added and NPAT is $76.1 million. Flexigroup’s shares are currently trading at $1.84, which is a 28% increase in value since last Monday’s opening.
Flexigroup also announced a suite of new products through its Buy Now Pay Later, Credit Cards and SME lending businesses. These new activities coupled with the top level marketing strategies conveyed at the presentation provided a real sense of momentum.
Investors looking for dividends should also note Flexigroup’s 5.9% gross dividend yield.
G8 Education is the nation’s largest for-profit childcare service with additional operations in Singapore.
G8 Education’s recently announced half-year results were a mixed bag. NPAT was down 20% and licensing delays impacted the opening of several new centres. Perhaps the most concerning aspect of the announcement was the lower occupancy rate at 71% across all centres. This reduction in occupancy rates may have also had an impact on the underperformance of a number recently opened large format centres.
On the positive side, the company confirmed its strategic growth program is on track, listing a number of activities and achievements including:
- Centre turnaround focus group established and on track to complete 25 turnarounds in CY19, encompassing team, assets and curriculum
- Rollout of pilot labour scheduling and rostering system set for January 2020, with benefits from CY20 H2
- Committed CY19 centre pipeline, with 17 greenfield centres and 2 brownfield centres.
Investors responded to the announcement by selling off G8 shares, but by mid-last week we saw a rebound of sorts with a 9% increase in share value. This could be an indication that the immediate response to the company position has settled. Investors may again be contemplating a more long-term view of G8 Education.
Shares have dropped around 2% in today’s trade and are currently priced at $2.48 per share, with a fully franked gross dividend yield of 7.59%. This price is still a distance away from February’s 52-week high of $3.63. The current lower price might interest some potential investors; however, others might take a wait-and-see approach and monitor how G8 Education responds to the challenges ahead.
Flexigroup and G8 Education are great examples of how you can invest in solid companies with a modest initial outlay. Just a few hundred dollars will get you decent sized parcel of shares and then you’re on your way to setting up your dream retirement.
These 3 stocks could be the next big movers in 2020
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Motley Fool contributor JWoodward has no position in any of the stocks mentioned. The Motley Fool Australia has recommended FlexiGroup 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.
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