True long-term investors don't care what happens to their investments day to day, or even month to month.
In this spirit, the team at the ECP Growth Company named three All Ordinaries Index (ASX: XAO) shares that saw wildly varying fortunes in recent weeks — but it is backing all the same, for growth in the long run.
Let's check out their tips:
'Attractive margins and operating leverage'
Hub24 Ltd (ASX: HUB) is an All Ords stock that's put a smile on many investors' faces, rallying more than 42% since a 10 July trough.
ECP analysts, in a memo to clients, noted that the company presented revenue, earnings before interest, taxes, depreciation, and amortisation (EBITDA) and net profit that beat expectations.
"The company also announced an on-market share buyback program.
"The share price responded positively as the result reaffirmed the strong fundamentals of the business and the market shrugged off some of the concerns it harboured earlier in the year regarding flow momentum, which the company flagged has re-accelerated in the new financial year."
But forget the recent pump up in valuation because there's plenty more where that came from.
"With attractive margins and operating leverage incrementally flowing through, the outlook remains compelling for Hub24."
'Value proposition remains compelling'
As a contrast, the shares for small business lender Judo Capital Holdings Ltd (ASX: JDO) are struggling.
The stock has sunk almost 21% since 23 August, and 23.9% since the start of the year.
Net interest margin (NIM) is a major health indicator for finance businesses such as Judo, and reporting season didn't hit the mark on this metric.
"The market was not expecting the degree of decline in the NIM, driven primarily by a more expensive funding mix as the TFF is refinanced."
But the ECP analysts are not worried in the long run for this All Ords stock.
"Judo is growing its loan book quickly and its customer value proposition remains compelling.
"While there is some risk around achieving its metrics at scale, we remain positive on its competitive position in the market, its ability to take market share and its asset quality."
Rocketing up the charts
Virtual networking technology provider Megaport Ltd (ASX: MP1) is absolutely flying, seeing its share price rocket 77.7% year to date.
It helped during the August reporting season that it upgraded its 2024 financial year EBITDA forecast.
The ECP team noted that it followed an earlier earnings upgrade for the previous financial period just three months earlier.
"The result provided confidence to the market that recent changes to their go-to market strategy are gaining traction, unlocking operating leverage in the process."
According to CMC Markets, eight out of 14 analysts currently consider Megaport shares a buy.