The Australian share market had many ups and downs in August, but ultimately ended the period right back where it started.
That couldn't stop one ASX bank stock from delivering stunning returns for its shareholders.
Was it Commonwealth Bank of Australia (ASX: CBA)? Nope. It rose approximately 1.5% during the month.
How about Westpac Banking Corp (ASX: WBC) or National Australia Bank Ltd (ASX: NAB)? Not them either. Westpac was up 4.8% and NAB was down 1% over the period.
Nor was it ANZ Group Holdings Ltd (ASX: ANZ), which rose 4.6% in August.
Which ASX bank stock jumped in August?
The ASX bank stock that absolutely smashed the market was Judo Capital Holdings Ltd (ASX: JDO).
The small business lender's shares raced approximately 19% higher during the month thanks almost entirely to the release of its full year results.
Judo Capital reported a 20% increase in gross loans and advances (GLA) to $10.7 billion, a net interest margin (NIM) of 2.94%, and a 2% lift in underlying profit before tax to $110.1 million.
The latter was in line with its guidance, which management revealed reflects above-system lending growth at strong margins, prudent management of costs, and a fundamental shift in the bank's funding mix.
Potentially getting investors more excited was the ASX bank stock's guidance for the year ahead. Management is targeting 15% growth in profit before tax. Its CEO, Chris Bayliss, commented:
Judo is well positioned to continue growing towards our vision of becoming a world-class SME business bank. Our relationship-based approach to lending will enable our experienced relationship bankers to continue supporting SMEs, providing credit to successful operators who are looking to grow and invest in their businesses. We will also continue to provide support and seek optimal resolutions for any customers encountering challenges.
Can its shares keep rising?
The broker community responded very positively to Judo Capital's results.
However, with its shares rallying strongly since then, the general consensus is that its shares are now approaching fair value.
For example, Ord Minnett currently has a buy rating and $1.80 price target, Morgans has an add rating and $1.69 price target, and Goldman Sachs has a buy rating and $1.71 price target.
This compares to the current Judo Capital share price of $1.70.
In light of this, investors may want to keep their powder dry and wait for a pullback to create a more compelling entry point.
