3 tempting ASX shares that rocketed after their results

These stocks shot up in August, but one expert reckons it's not too late to get a pizza the action…

| More on:
Three people sit on safe cheering with pizza on table

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The reporting season can make or break the fortunes of ASX shares.

Not only is the company's performance for the 2021 financial year important, but the outlook for the current and future years will also set the tone for the stock price.

Here are 3 August results season winners that Shaw and Partners senior investment advisor Adam Dawes picked out this week:

Technology and market dominance will keep the pizzas hot

Shares for pizza chain Domino's Pizza Enterprises Ltd (ASX: DMP) went gangbusters in August.

The stock has gained more than 30% in the past month after it pleased the market with a boost in sales, earnings, profit and dividend.

And Dawes reckons the upward movement has plenty of legs.

"Domino's Pizzas has certainly done really well," he told Switzer TV Investing

"Mainly because everyone's stuck at home… People are sick and tired of cooking, and they may as well keep the kids happy by buying a couple of pizzas." 

The business has strategically placed itself as a "no contact" and low-cost takeaway option, according to Dawes.

But if it's such a COVID beneficiary, wouldn't Domino's shares plummet once Australia's vaccination coverage is up and society re-opens?

After all, this ASX share has already more than doubled in the past 5 years.

While Dawes acknowledged that as a risk, he pointed out a couple of positive forces to cancel out any sales slowdown from Australians getting out of the house more.

"These guys are very technology-driven and I think that's what's separated them from a lot of the other pizza delivery people," he said.

"Also, it's the store dominance that they've got — they're around most corners. They actually place themselves quite comfortably in lower socio-economic areas, also, because their pizzas are quite cheap."

Wilson Asset Management portfolio managers Catriona Burns, Matthew Haupt, and Oscar Oberg last week were also glowing about Domino's prospects.

"We remain positive on Domino's Pizza, with key growth markets such as Japan, Germany, and France reaching an inflection point underpinning a robust organic growth profile, while latent capacity remains for further earnings accretive acquisitions."

'Standout business'

Construction materials business James Hardie Industries plc (ASX: JHX) has seen its shares rise by more than 14% over the past month, breaking all-time highs.

Hinting at its history of making asbestos, Dawes acknowledged James Hardie has "a chequered past". But the August results revealed a booming US arm that was going too well to ignore.

"An upgrade that came from the US building and manufacturing business there has absolutely kicked a lot of goals," he said.

"We've seen other companies like Boral Limited (ASX: BLD) try to go overseas and come back with their tail between their legs."

Dawes noted that several Australia-only companies in the construction and materials sector had downgraded this August.

"So I think James Hardie is a really standout business, especially for that US growth and especially for the ability for them to run their business."

Great results, ESG-proof and excellent business

Stocks for small-cap technology company Calix Ltd (ASX: CXL) have risen more than 31% in value in the past month.

According to Dawes, the business' flagship technology removes the heat out of cement manufacturing to recycle into energy.

He admitted this ASX share is a riskier bet than James Hardie and Domino's — but the $630 million business has much going for it.

"We've got a 'buy' [rating] on it at Shaw and Partners," said Dawes.

"The ESG [environmental, social and governance] theme plus the royalties they'll get from some of these European operations, I think, is a fantastic one… It's a great business."

It's not just in August that Calix shares have had a good time. They've more than quadrupled in value in the 12 months.

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »

Father in the ocean with his daughters, symbolising passive income.
Dividend Investing

I'd spend $8k on these ASX 200 shares today to target a $6,102 annual passive income

I believe these ASX 200 shares will continue rewarding passive income investors for years to come.

Read more »

Three businesspeople leap high with the CBD in the background.
Share Market News

Boom! ASX 200 blasts to new record highs

ASX 200 investors just sent the benchmark index into uncharted territory.

Read more »