With inflation, rising interest rates, and geopolitical pressures bearing down on ASX stocks, investors held their breaths for last month's reporting season.
But the team at the Elvest Fund didn't mind what they saw.
"The FY2023 results season was better than expected," it stated in a memo to clients.
"Aggregate earnings forecasts for FY2024 were marginally pared back… That said, small cap equity pricing has more than captured this dynamic, and as a result, good value is apparent in a range of high quality companies."
Dangers lurk in the short term, admittedly.
"Despite some relief from recent disinflation in materials and freight, key inputs including labour, rent and debt servicing costs will weigh on near term corporate profits," the memo read.
"Nevertheless, businesses with market leadership, capital efficient operations and balance sheet strength are best placed to deliver through the cycle, and this remains our research focus."
Here are four ASX stocks the team loved coming out of the August silly season:
On track for a 'a record result' in 2024
Hub24 Ltd (ASX: HUB) shares shot up after its numbers were released. In fact, the stock is now more than 37% higher since a 10 July trough.
"Hub24 delivered a result that beat expectations, with underlying NPAT (net profit after tax) up 64% to $59 million."
The company has been a disruptor in the financial services industry, but is now transitioning into a more mature stage of its life.
"Hub24 is increasingly becoming the platform of choice for advisers and is rapidly taking market share from legacy incumbent providers.
"The company is now moving into a phase of significant operating leverage, and is well placed to strongly compound earnings growth in the years to come."
As a contrast, the Corporate Travel Management Ltd (ASX: CTD) share price plummeted during August.
The Elvest team doesn't see much wrong with its prospects though.
"The company delivered a sound result in a sector still recovering from the effects of the pandemic," read the memo.
"Underlying EBITDA was up 179% to $167 million, whilst FY2024 guidance of $240 million to $280 million implies Corporate Travel will deliver a record result in FY24."
Future is brighter than the present
The Dicker Data Ltd (ASX: DDR) share price jumped in the double-digits after its latest annual report.
The market likely was a fan of the outlook, more than its 2023 numbers per se.
"Dicker Data reported pre-guided 1H23 results with revenue and earnings both up by about 9%," read the Elvest memo.
"The market responded positively to management commentary around what it expects will be a very strong PC refresh cycle… over the next 24 months."
The technology distributor holds a 35% market share, catering to mid-tier customers.
"We see its position only strengthening in the coming years."
Similarly, investors were more excited about Johns Lyng Group Ltd (ASX: JLG)'s future than the 2023 financial results.
"FY24 guidance was well above expectations with core business (i.e. non-catastrophe work) EBITDA set to grow by 20% to $113 million.
"Cash flow was strong and the company is primed to continue its successful bolt-on strategy with $72m net cash."
Johns Lyng has fingers in many pies.
"Growth avenues span insurance building (Australia & USA), strata services, disaster recovery and essential home services."