The Australian share market was weak in February, taking back a lot of the gains investors enjoyed in January.
However, the QVG Capital Long Short Fund managed to remain flat.
In fact, the reporting season served as confirmation of its investment beliefs for many of its ASX shares.
Here are three with the best prospects:
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'Market is running out of reasons not to back these guys'
Johns Lyng Group Ltd (ASX: JLG) is the fund's top holding currently, for good reason.
"Johns Lyng Group reported 88% earnings per share growth and upgraded their full year guidance," QVG analysts said in a memo to clients.
The share price had been down year-to-date before reporting season and 21% in the red over the past 12 months.
"The stock had been weak leading into the result due to insider selling and a lack of disclosure of performance of their large acquisition, RE," read the memo.
"This result puts these fears to rest."
Now with those results and outlook delivered, it's only upwards and onwards for the insurance repair business.
"The market is running out of reasons not to back these guys!" read the QVG memo.
"The combination of more organic growth and intelligent acquisitions means future earnings per share growth will eventually force the stock higher."
'A long runway of growth ahead'
For the QVG fund managers, its investment in Hub24 Ltd (ASX: HUB) has been the perfect demonstration of the power of long-term investing.
"Our first investment in this stock was in 2015 — well before the inception of QVG Capital — at $3.50 with the view that the stock's earnings would one day justify the expensive valuation," read the memo.
"The stock now trades at $29 and still has a long runway of growth ahead of it."
Reporting season continued the investment platform provider's record of growth.
"The highlight of Hub24's results was earnings per share growth of 59% despite rising costs," the QVG memo stated.
"'Patience' and 'the power of compounding free cash flow' are the lessons here."
'A bull market in sneakers, jeans and accessories'
During a time when most non-mining ASX shares have suffered, Lovisa Holdings Ltd (ASX: LOV) has been a true darling of the market.
Since June, the retail stock has rocketed an incredible 86%.
Reporting season, for the QVG team, indicated Lovisa's momentum would continue.
"Lovisa delivered a very strong result, beating consensus at revenue and, if you back out the generous incentive package for the CEO, it was a very large beat to operating earnings too."
The analysts admitted there are worries about consumer spending slowing down for discretionary goods, with nine consecutive months of interest rate rises starting to bite hard.
But perhaps the clientele for budget jewellery doesn't overlap much with those servicing home loans.
"Housing-related retail is slowing noticeably but those without mortgages are having a great time," read the memo.
"There still appears to be a bull market in sneakers, jeans and accessories. As shareholders of Lovisa we're happy The Kids Are Alright."
