All the numbers and commentary during reporting season can be overwhelming for an amateur investor.
That's why it's worth listening to the professionals who can devote all day analysing the annual results as they come in.
Just this week, triggered by the respective company reports, Morgans upgraded three ASX shares to "add", which is its terminology for "buy".
Let's take a look at its rationale, as described by analyst Andrew Tang:
'Fundamentals remain strong'
Mortgage repayments are sky high and cost of living pressures are bearing down on Australian households.
Perhaps that's why a grocery business like Woolworths Group Ltd (ASX: WOW) is a fine pickup at the moment.
"Woolworth's FY23 result was slightly above our expectations but in line with consensus," Tang said in his Best Calls To Action memo.
"Australian Food EBIT growth was 4% above our forecast; group EBIT margin rose 40 basis points to 4.8%; group ROFE increased 120 basis points to 14.9%."
Countering the growth in the food business was Australian B2B, NZ Food, and BIG W earnings, which were "all weaker than anticipated".
"The outlook for BIG W looks challenging due to a broader slowdown in discretionary spending."
Nevertheless, the Morgans team is bullish on Woolies.
"While WOW is not cheap, trading on 24.5x FY24F PE and 3.0% yield, we think its fundamentals remain strong with defensive characteristics, dominant market positions, and a highly-regarded management team."
'We like the long-term growth profile'
Many experts had tipped international education services provider Idp Education Ltd (ASX: IEL) to boom in the post-COVID era, but the stock has failed to deliver on the hype just yet.
The share price is down 6.3% year to date.
IDP's annual report showed some divisions are doing better than others, with the student placement arm seeing 63% growth in revenue.
"The outlook for student placement remains strong into FY24, with system growth still solid across all jurisdictions and Fastlane enabling market share gains (primarily Australia)."
Regulatory changes in the Canadian English testing (IELTS) industry was a blow during the financial year, effectively ending IDP's monopoly there.
"We expect IELTs volume declines from the opening of Canadian visa to competition; and investment from IEL to defend market share.
"Heightened competition poses a risk to the rate of growth, however the earnings sensitivity is now lower after a cut in the IELTs division expectations."
Tang admitted the stock is "not cheap on short-term multiples".
"However, we like the long-term growth profile," he said.
"We expect the SP to continue to drive strong compound growth to FY26."
'Confidence in the company's growth trajectory'
Hotel software maker Siteminder Ltd (ASX: SDR)'s annual results met Morgans' expectations, but fell below what others were forecasting.
The current financial year could bring growth, though.
"We upgrade our forecasts reflecting Siteminder's recently upgraded FY24 guidance for positive underlying EBITDA and FCF in the 2H24 (vs previously by 4Q24)."
The last six months have been especially strong, according to Tang.
"Siteminder's strong 2H23 performance — with better than expected property [ads], transaction product uptake, gross margins and unit economics — gives us more confidence in the company's growth trajectory."
Siteminder is popular in the professional community.
According to CMC Markets, 11 out of 14 analysts currently surveyed rate the tech stock as a buy.
