It's been a wild ride for investors so far this February earnings season. With only five trading days of the month to go, the S&P/ASX 200 Index (ASX: XJO) has fallen by a hefty 2.77% since the end of last month. Having said that, investors can't complain too much given the index gained a whopping 4.57% in January and is still trading only around 318 points shy of its all-time high.
But for many shareholders, the focus of their attention has been a little more granular this month, with a slew of Australia's highest-profile companies turning in their financial report cards for careful scrutiny.
As always, there have been a few surprises along the way — some very welcome, and others sending company share prices plummeting.
On that note, we asked Foolish writers which ASX shares they think are in the buy zone right now after some reporting revelations.
Here is what they told us:
4 top ASX shares to buy following reporting highlights (smallest to largest)
- AMP Ltd (ASX: AMP), $3.50 billion
- HMC Capital Ltd (ASX: HMC), $4.07 billion
- GQG Partners Inc (ASX: GQG), $6.97 billion
- BHP Group Ltd (ASX: BHP), $209.35 billion
(Market capitalisations as of market close 21 February 2025)
Why our Fool writers are impressed with these ASX stocks
AMP Ltd
What it does: AMP provides banking, superannuation, and retirement services in Australia and New Zealand. The company has around one million customers and employs approximately 3,000 people.
By Bernd Struben: The AMP share price is up 27.06% since this time last year. That's despite shares tumbling 14.9% on 14 February, the day the financial services company released its full-year results. And shares closed down another 4.7% the following trading day.
The sell-down was driven, in part, by a 43.4% year-on-year decline in statutory net profit after tax (NPAT) of $150 million. But it's important to note that this reflects AMP's business simplification spend over the year as well as the losses incurred on the sale of its Advice business in December.
If we exclude these one-off occurrences, AMP's underlying NPAT actually increased by 15.1% year over year to $236 million.
With AMP having streamlined its business and now focussing on its strengths, I believe the recent selling presents an attractive entry level.
As AMP CEO Alexis George said following the results, "AMP is positioned to drive growth and build on opportunities in our wealth businesses to become a pre-eminent retirement specialist, and… a leading digital bank."
Atop potential share price gains, AMP shares trade on a partly franked trailing dividend yield of 2.17%.
Motley Fool contributor Bernd Struben does not own shares of AMP Ltd.
HMC Capital Ltd
What it does: HMC Capital is an alternative asset manager that invests in high-conviction and scalable real asset strategies.
By James Mickleboro: I think HMC Capital has delivered one of the strongest results of earnings season (so far). The company smashed the market's expectations when it posted a 240% increase in pre-tax operating earnings to $202.2 million and a 204% jump in pre-tax operating earnings per share (EPS) to 51.9 cents.
Goldman Sachs notes that "HMC's 1H25 earnings of A$140.5 mn were up significantly pcp and above consensus expectations driven by stronger than expected management fees (higher FUM) and investment income partially offset by higher than expected operating expenses."
The good news is that I believe it's not too late to invest in this growing company. Particularly given its positive outlook, which is being underpinned by its diversification away from classic real estate and into areas with high recurring revenues, such as digital infrastructure and private markets.
In response to the result, Goldman Sachs reiterated its buy rating and lifted its price target from $9.86 to $12.30. It views the "result as evidence of HMC's ability to continue to raise AUM at an accelerated pace and in turn drive management fees (a high-quality and recurring source of revenue) higher."
Motley Fool contributor James Mickleboro does not own shares of HMC Capital Ltd.
GQG Partners Inc
What it does: GQG is a fund manager based in the US but also with a presence in Canada, the UK, and Australia. It focuses on a variety of investment strategies encompassing US shares, global shares, and emerging market shares.
By Tristan Harrison: I believe GQG's FY24 result and funds under management (FUM) for January 2025 were surprisingly good. The fact the company returned to FUM growth in January is a good sign for the foreseeable future.
In the 12 months to December 2024, GQG reported its average FUM increased 45.4% to US$148.2 billion, net revenue increased 46.9% to US$760.4 million, distributable earnings grew 50.4% to US$447.9 million and the dividend per share increased by 52.3% to US 13.67 cents. Those are some pretty strong numbers!
Pleasingly, January 2025 saw net flows of US$1.7 billion, with the overall FUM increasing by US$7.4 billion (or 4.8% month on month). As long as GQG's net inflows remain positive, I think its FUM and net profit can continue growing, thanks to the investment team's ability to produce good returns compared to their benchmarks.
According to Commsec forecasts, the GQG share price is valued at 10x FY25's estimated earnings.
Motley Fool contributor Tristan Harrison does not own shares of GQG Partners Inc.
BHP Group Ltd
What it does: BHP is the second-largest stock on the ASX by market cap and one of the largest mining companies in the world. It has extensive global operations in commodities like iron ore, copper, potash, and nickel.
By Sebastian Bowen: Investors did not like the earnings report that BHP put out earlier this week, and its shares slumped as a result. Even though revenues, profits, and the cherished dividend all fell over last year's levels, I think this could well represent a buying opportunity for the 'Big Australian'.
As a miner, BHP is always going to be a volatile investment; after all, its main commodity, iron ore, can vary wildly in price alongside the economic cycle.
But it was BHP's copper numbers that piqued my interest in these earnings. BHP's copper earnings were up 44% year on year, and comprised 39% of the company's earnings base for the period.
I think copper has a bright future ahead of it as a commodity, as it is a key ingredient in everything from electric vehicles to renewable energy infrastructure.
BHP knows this, and has been expanding its copper operations for years now. Evidently, this labour is nearing fruit. As such, I think investors should take another look at BHP shares right now as a potential buying opportunity after the company's post-earnings slump.
Motley Fool contributor Sebastian Bowen does not own shares of BHP Group Ltd.
