The official August reporting season is over and I think there's plenty of investment opportunities, here are two of them in my opinion:
Costa Group Holdings Ltd (ASX: CGC)
Australia's largest horticultural business has recovered strongly – up another 6.6% today – since the initial poor reaction to its FY19 result which included a disappointing performance from the berry, citrus fruit and mushroom segments. Investors may be thinking the worst of the growing news is now over.
One can never be certain when cycles/luck will change, but it's unlikely that Costa will continue to face the problems it has been over the past 12 months.
It's best to be greedy when others are fearful, which could be now. That's why I decided to top up my shareholding recently.
MNF Group Ltd (ASX: MNF)
The MNF share price has risen 28% since the start of last week after investors were pleased to see the company reported a shift of its revenue to a recurring basis which also comes with higher profit margins.
Recurring revenue increased by 89% to $74 million and now represents 34% of total revenue but recurring gross profit was 60% of gross profit.
MNF also guided that, if it hits its mid-point guidance, earnings before interest, tax, depreciation and amortisation (EBITDA) will grow by 27% to between $33 million and $36 million and earnings per share (EPS) will also increase by 27% to a range of 18.4 cents to 21.1 cents.
That means that MNF is now trading, despite the strong share price growth, at 23x to 27x management's FY20's estimated earnings.
Foolish takeaway
I think both of these shares are probably good value compared to the highly-priced growth shares in the tech sector. If I had to choose one I'm not sure I could – MNF probably has a more consistent growth path, but it could be an opportunistic time to buy Costa shares.
