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ASX reporting season winners that will keep winning in 2020

The Australian share market is already more than half-way through its February reporting season.

With the S&P/ASX 200 Index (INDEXASX: XJO) and All Ordinaries (INDEXASX: XAO) sitting at all-time highs, expectations to deliver are as high as ever.

Market darlings such as EML Payments Ltd (ASX: EML) and Altium Limited (ASX: ALU) have slightly missed the mark and consequently, were severely sold down.

Here are three ASX 200 shares that might not have taken the spotlight for earnings, but have a lot of business momentum for the rest of 2020 and beyond.

1. Goodman Group (ASX: GMG)

The Goodman Group share price has been one of the best performing REITs on the ASX. I believe industrial-orientated REITs will continue to outperform. There is a strong take up of land in highly desirable industrial areas that also have competing uses such as areas that are in close proximity to ports and the city.

E-commerce and a focus on reducing supply chain costs will also drive an increase in demand for infill development and high-quality properties that are within the scope of Goodman’s portfolio.

As such, Goodman delivered a very solid half-year result last week that saw operating profit increase 14.1% on 1H19 and operating earnings per share (EPS) up 12.9% on 1H19. The group has also upgraded its forecast FY20 EPS to be up 11% on FY19.

Commenting on the results, CEO Greg Goodman highlighted, “The deliberate concentration of our assets in urban logistics locations is delivering high quality properties for our customers and strong returns for the group and our partners”.

2. Saracen Mineral Holdings Limited (ASX: SAR)

Saracen continues to shift to another level in the league of global gold players after the 50% ownership acquisition of the Super Pit in Western Australia.

The company reported outstanding results for 1H19 as underlying net profit after tax soared 84% and group production increased by 22%. The all-in sustaining cost also remained steady, increasing by 1% to A$1,041 per ounce. The result included a one-month contribution from the Super Pit.

The gold spot price is looking very strong and poked its head above US$1,600 on Thursday. The significant contribution from the Super Pit will position Saracen to maximise the bullish gold price.

3. Tassal Group Limited (ASX: TGR)

The Tassal Group share price has gained minimal traction in 2020. However, the business is well-positioned to drive growth in earnings and returns in FY20 and beyond.

Over 1H20, Tassal’s focus was on keeping its fish in the water rather than harvesting for short term revenue. Reduced sales into lower value export markets, combined with further optimisation of sales mix in the domestic market, saw a 15.4% increase in salmon earnings before interest, tax, depreciation and amortisation (EBITDA).

There are many factors that will position Tassal for strong growth moving forward. Bigger salmon will generate better margins. Combined with the company’s optimisation of existing leases and cost of growing reductions as well as prawn contribution to earnings, I see good value in Tassal shares at today’s prices.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

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*Returns as of June 30th

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Emerchants Limited. The Motley Fool Australia owns shares of Altium. 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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