Enero Group operates globally, with offices in 16 cities worldwide, delivering brand marketing and advertising services for a host of blue-chip clients.

Solid start to the year

The company on Tuesday published a trading update to the ASX, indicating it had had a strong start to the year, growing EBITDA by 13% in the first quarter, "driven by strong Australian agencies' performance and lower corporate costs''.

The company's BMF brand transformation division performed strongly, benefiting from recent large client wins, Enero said, while growing margins from 18.1% to 21.6% compared to the previous corresponding period.

The Hotwire Global division, which focuses on technology clients, "continues to navigate a challenging technology sector environment", Enero said, and continued to cut costs and offshore some roles.

That division will also soon be strengthened with the appointment of a new chief executive, who will start in January 2026.

Commenting on the first-quarter results, Enero Chief Executive Officer Ian Ball said the earnings growth demonstrated the resilience of the company's diversified model.

Our Australian agencies continue to perform strongly, offsetting softer conditions in the global tech sector where Hotwire operates. We're taking deliberate action to reset and refocus Hotwire under new leadership, sharpening its focus on innovation, performance, and growth. Together with ROI·DNA's largest-ever client win, strong AI product momentum, and a leaner operating model built on automation and global centres of excellence, we're building solid momentum in a dynamic market.

The company also said it was targeting a dividend payout of 40%-60% of earnings per share.

Shares cheap at this level

E&P Capital analyst Oliver Coulon said the trading update was positive.

Mr Coulon said while Enero had not provided specific earnings guidance going forward, it "has alluded to new client wins contributing to revenue growth in the second quarter of FY26 in both BMF and Hotwire''.

He added that at current earnings multiples, "the stock is highly debased with seemingly little in the way of expectations in the current share price''.

E&P Capital has a $1.68 per share price target on Enero Group, which would be a 121.3% uplift if achieved.  

Some of Enero Group's clients include Tourism Tasmania, international engineering group Honeywell, and Telekom Malaysia.

The company was valued at $68.1 million at the close of trade on Monday.

The company's stock is trading well below its 12-month high of $1.36 and has traded below the $1 mark for most of this calendar year.

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At the time of writing, Enero shares are up 7.14% to $3.30 apiece.

The global marketing group reported revenue and bottom line profitability growth in its operating segments.

Value from the growth of these segments was transferred to its balance sheet, adding a large amount of cash and boosting net assets.

The outlook for FY23 is also positive, focusing on improving its existing book of business and realising synergy with its recently acquired companies.

What did Enero report?

Investors are pushing up the Enero share price on the back of a strong full-year result for FY22. Highlights include:

• Net revenue up 20.4% from FY21 to $193.4 million
• Operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) up 36.4% from FY21 to $62.2 million
• Operating EBITDA margin up 380bps to 32.2%
• Earnings per share (EPS) up 17% to 30.9 cents

Enero reported strong EBITDA and net revenue growth for both its brand transformation and creative technology operating segments.

Net revenue for brand transformation increased by 11.3% to $106.7 million, while operating EBITDA increased by 13.6% to $24.2 million.

Net revenue for creative technology and data had a larger percentage increase of 34%, growing to $86.7 million. Operating EBITDA was also higher, with a 52.8% increase to $48.6 million.

The company also announced a dividend per share of 12.5 cents, which was down from 14.9 cents in FY21.

What else happened?

Enero strengthened its balance sheet, adding $48 million in cash to it in FY22. Net assets also grew 14.93% to $155.3 million. 

By adding digital transformation services to its product mix, Enero estimates it has a $1.2 trillion new addressable market, up from $488 billion through offering solely marketing services.

A fully franked final dividend of 6.5 cents was announced, which is a 48% increase on FY21's final dividend. The dividend has a record date of September 20 and a payment date of October 4 this year.

What did management say?

Commenting on the results which have helped push up the Enero share price today, CEO Brent Scrimshaw said:

Throughout FY22 our global portfolio of innovative brands and services delivered strong operating results, continuing our trajectory of sustainable growth in revenue and earnings over the past five years.

In line with our operational strategy, Enero's revenue base is now highly diversified across segments, industries, and clients.

What's next?

Enero's priorities for FY23 include improving its existing book of business and developing a focus on environmental, social, and corporate governance.

Enero said it would also integrate its most recent acquisitions into the business. Companies ROI DNA Inc, a B2B sales & marketing agency, and GetIT Ltd, a B2B technology marketing agency, were acquired at the start of July this year.

A focus on driving efficiency was also cited as a priority. This will reportedly be achieved through new processes and improved cost management.

Enero share price snapshot

The Enero share price has increased by 10% over the past 12 months.

Shares in the company are beating the S&P/ASX 200 Communication Services Index (ASX: XTJ) by a wide margin — it's currently down 3% over the last year.

Enero has a market capitalisation of $274.78 million.

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WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Leaders Ltd (ASX: WLE).

One of the LICs is called WAM Research, which looks at smaller businesses on the ASX.

WAM describes WAM Research as a LIC that invests in the most compelling undervalued growth opportunities in the Australian market.

The WAM Research portfolio has delivered gross returns (that's before fees, expenses, and taxes) of 16.5% per annum since the strategy changed in July 2010, which is superior to the All Ordinaries Total Accumulation Index (ASX: XAOA) return of 9.6% per annum.

These are the two ASX shares that WAM outlined in its most recent monthly update:

Codan Limited (ASX: CDA)

WAM said Codan was a detractor from the portfolio performance during October 2021.

The fund manager described the business as a manufacturer and supplier of communications and metal detection products to security and military groups, governments, and consumers globally.

In its comments at the annual general meeting (AGM) about its trading, it said its existing businesses are tracking in line with FY21's record first-half profitability. This was below market expectations, with slower than anticipated organic growth in the metal detection business being the key driver.

WAM said this was disappointing in the short term, but the medium-term outlook remains "positive" for the ASX share, underpinned by significant ongoing investment in product development and expansion into new markets.

The fund manager also pointed out that during the month, Codan announced it had secured a significant multi-year contract supplying communications equipment to a military program, with the outlook for further potential awards remaining "positive".

Enero Group Ltd (ASX: EGG)

Enero was described as a global marketing and communication services business that employs over 650 staff across 13 cities around the world.

At the company's recent annual general meeting (AGM), Enero Group provided an "impressive" trading update with growth ahead of market expectations.

WAM noted that for the three months to September 2021, Enero's quarterly revenue increased to $45.6 million, which was a 22.6% year-on-year rise, with its Hotwire, BMF, and OB Media businesses that the fund manager said outperformed.

The fund manager said Enero's management expects the strong momentum to continue and WAM sees further upside to consensus earnings estimates.

WAM points out that the ASX share continues to trade at a material discount to offshore peers despite a stronger growth outlook.

It was also noted by the investment outfit that Enero's balance sheet provides "ample room" for acquisitions that would improve the business in the future. The upcoming initial public offering (IPO) of the comparable business called System1 in the United States could end up being a catalyst that ends up helping Enero Group's valuation.

The post These 2 ASX shares have been named as buys by experts appeared first on The Motley Fool Australia.

WAM operates several listed investment companies (LICs). Some, like WAM Leaders Ltd (ASX: WLE), focus on larger companies.

There's also one called WAM Capital Limited (ASX: WAM) which targets "the most compelling undervalued growth opportunities in the Australian market".

The WAM Capital portfolio has delivered an investment return of 16.6% per annum since its inception in August 1999, before fees, expenses and taxes. This gross return outperformed the All Ordinaries Total Accumulation Index (ASX: XAO) return of 8.7% per annum over the same timeframe.

These are the two ASX shares that WAM Capital outlined in its most recent monthly update:

Enero Group Ltd (ASX: EGG)

WAM Capital described Enero Group as a global marketing and communication services business that has more than 650 staff across 13 cities around the world.

At the company's recent annual general meeting (AGM) , it provided an a trading update that WAM Capital's fund managers thought was impressive. Growth was ahead of market expectations.

Enero Group's revenue for the three months to September 2021 increased 22.6% year on year to $45.6 million. The ASX share's Hotwire, BMF and OB Media businesses all outperformed.

The fund manager noted that management expects the strong momentum to continue and WAM's analysts believe that the business is trading at a material discount to offshore peers despite stronger growth prospects.

WAM also said that it believes Enero Group's "strong" balance sheet provides ample room for accretive acquisitions in the future. It views the upcoming initial public offering (IPO) of the comparable business System1 in the United States as a valuation re-rating catalyst.

Pact Group Holdings Ltd (ASX: PGH)

Pact Group was described as an Asia Pacific packaging business that manufactures and supplies plastic and metal packaging for a range of trusted brands.

Last month, it released a trading update that showed how the COVID-19 pandemic affected its FY22 first quarter sales. This came at the same time as input costs are increasing with oil prices rising.

The fund manager thinks that the ASX share is trading below its underlying value. WAM believes that Pact Group's long-term strategy, with a focus on increasing recycling capability and reducing inefficiencies, will drive revenue growth and margin expansion in the future.

Takeover battle

WAM Capital also noted that it is currently going through a takeover process to attempt to buy the shares of PM Capital Asian Opportunities Fund Ltd (ASX: PAF).

The post Wilson Asset Management (WAM) thinks these 2 top ASX shares are a buy appeared first on The Motley Fool Australia.

Not to spoil the surprise, but the media stocks that outperformed their peers probably aren't the ones you are expecting…

The 5 top performing ASX media shares of October

A quick note; this list only includes shares with market capitalisations of more than $100 million.

Enero Group Ltd (ASX: EGG)

The Enero share price has outperformed those of all its ASX media and communications-focused peers.

Through the month of October, it gained 30.69% to finish at $3.96.

Last month, Enero announced the September quarter had seen it with 22.6% more revenue and 50% more earnings before interest, tax, depreciation, and amortisation (EBITDA) than the same quarter of financial year 2021.

The company operates a number of brands in the communications and marketing spheres.

HT&E Ltd (ASX: HT1)

Coming in second best is HT&E, also known as Here, There & Everywhere.

The radio, audio, and digital content business saw its share price grow by 17.68% over the course of October to finish the month's final session at $1.93.  

The big news from HT&E last month was the settlement of a longstanding taxation dispute with the Australian Taxation Office.

IVE Group Ltd (ASX: IGL)

The IVE Group share price had a great October on the ASX. It gained 16.23% to end the period at $1.79.

The print and marketing company's stock was boosted by news of 2 acquisitions, both expanding IVE's retail display operations.

Gtn Ltd (ASX: GTN)

The Gtn share price also outperformed many of its peers over October, gaining 14.13% to finish at 52.5 cents.

Gtn – Global Traffic Network – provides traffic reports to radio stations in Australia, the United Kingdom, Canada, and Brazil. As compensation for supplying such reports, Gtn is generally given advertising slots. It then bundles and sells the slots to other parties.

There was no word from the company to explain its stock's surge last month.

NZME Ltd (ASX: NZM)

Finally, the crown for the fifth best performing media share of the month of October goes to NZME – New Zealand Media and Entertainment.

The company operates more than 50 print, radio, and digital media brands.

The NZME share price gained 13.27% over October. It finished the month trading at $1.11.

There were a number of announcements from NZME over October.

First, it updated the market on the impacts it was facing as COVID-19-induced lockdowns continued in New Zealand. The company's advertising revenue was hit by the lockdown. However, it remained 7% higher than during the prior corresponding period. The company also provided EBITDA guidance for the 2021 calendar year.

It later completed the sale of its GrabOne business.

The post These were the 5 best performing ASX media shares in October appeared first on The Motley Fool Australia.

At the time of writing, shares in the marketing and communications services company are trading for $3.45 – up 11.65%. Earlier today, the Enero share price hit a 52-week high of $3.76, up 21.7% on yesterday's closing price.

Let's take a closer look at today's news.

Enero company profile

Enero Group is a creative technology company operating a global collective of marketing and communications specialist agencies.

Its portfolio includes:

• Digital agency Orchard
• Creative agency BMF
• Brand, marketing and PR comms consultancy Hotwire
• Programmatic marketing platform OBMedia
• Issues management comms advisory CPR
• Strategic data consultancies The Leading Edge and The Digital Edge.

Enero share price up as revenue increases nearly 23%

In its investor presentation, Enero provided the following update:

• In the first quarter of FY22, the company made $45.6 million in net revenue. This is a 22.6% jump on the prior corresponding period (pcp)
• Operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) jumped 50% on the pcp to $14.7 million
• The EBITDA margin increased 5.9 percentage points to 32.2%.

These results are clearly encouraging for investors, at least judging by the rising Enero share price today.

What's the outlook and is this affecting the Enero share price?

Looking forward, Enero says it continues "to see a strong pipeline of new business opportunities", especially in the healthcare, technology, and consumer business-to-business markets.

The company goes on to say that inorganic growth continues to be a strong focus for Enero. Inorganic growth is a result of mergers and acquisitions rather than an expanding customer base.

Finally, Enero says ongoing uncertainty relating to COVID-19 may place pressure on the company's bottom line. Enero cites possible wage growth cost pressures and increasing discretionary travel expenses as borders open up.

Despite these headwinds, the Enero share price is rising today.

Enero share price snapshot

Over the past 12 months, the Enero share price has increased 89.5%. Year to date, shares in the company are up 62%.

Enero has a market capitalisation of approximately $303 million.

The post Enero (ASX:EGG) share price leaps 22% to 52-week high. Here's why appeared first on The Motley Fool Australia.

In part 1 of our interview, 1851 Capital portfolio manager Martin Hickson explained why Uniti's business model is irresistible. Now in part 2, he tells us how he regrets the way his fund launched last year and the 8 stocks that lifted it out of pandemic trouble.

Overrated and underrated ASX shares

The Motley Fool: What's your most underrated stock at the moment?

Martin Hickson: I don't know if it's the most underrated — we think it's underrated, it's Enero Group Ltd (ASX: EGG).

They operate a number of marketing agencies, both here in Australia, the UK and the US. It trades at a price-to-earnings ratio of sub 10 times. Their earnings are growing in excess of 30%.

The company has $50 million of net cash on the balance sheet. So, that provides them optionality to deploy into acquisitions. They've got a platform business in the UK which helps their customers deploy their online marketing budgets. It's very high margins on that business. It's called OB Media. 

We think that the valuation that Enero trades on is quite suppressed, but yet the market isn't giving them credit for that fast growing, high margin business in OB Media. And also the market is discounting the potential for them to deploy that cash. 

They made a small acquisition in the UK a month or two ago, but we think that over time, they can make further earnings, creative acquisitions as they deploy that capital. 

One of the largest shareholders has been selling down recently… So we think that the share price has been weaker due to this shareholder selling out. The price has gone from sort of $3.30 down to $2.50. We think it's very underrated, undervalued [at] where the share price currently is trading today.

MF: What do you think is the most overrated stock at the moment?

MH: I don't really want to call a single stock out individually. But as a broad statement, I think concept stocks. 

So stocks that are trading on revenue multiples, a lot of them in the technology space, but they don't necessarily have to be. Concept stocks that aren't making money and are losing money for the next couple of years. I think that a lot of those stocks are overvalued. 

There's been a lot of risk in the last sort of 6 to 9 months. And a lot of those stocks' share prices are down 30 or 40%. They still can fall further because there's no valuation support when you're trading on a 10 times revenue multiple, [and] you're not going to have any earning for a couple of years.

If we get interest rates increasing over the coming years… that will also put pressure on a lot of these concept stocks. There are longer-duration assets, where when you're discounting the future earnings back at a higher rate, that can lead to large declines in their valuation and share prices. So, that's an area of the market that we're avoiding at the moment.

MF: If the market closed tomorrow for 5 years, which stock would you want to hold?

MH: I'll probably have to say our largest position, Uniti Group Ltd (ASX: UWL). Reason is 90% of their earnings are recurring — so there's not a lot of risk around that. They're providing data to their customers. And so they're participating in that thematic of increased data usage, demand for high speeds, and that's not going away over the next 5 years.

MF: Internet connectivity is a utility now, isn't it? 

MH: Correct. Exactly, you're right. It's a need to have. 

So, for those reasons, if the market was closed and we look at that stock again in 5 years, I think that their earnings would have been able to grow over that 5-year period and it feels like a very safe one to own.

Looking back

MF: Is there a move that you regret from the past? For example, a missed opportunity or buying a stock at the wrong timing or price.

MH: We launched the fund in early February last year. 

We'd been running a paper portfolio for 6 months leading up to that. We had a hit list of the stocks that we wanted to buy. We deployed a lot of that capital in the first couple of weeks of February, and then coronavirus accelerated in that final week of February. 

So for the first 2 months of the fund's launch, February and March, [it] was down 33% over that period. It would've been great to launch the fund at the end of March. The performance numbers on returns would look a lot better if we'd launched it then! 

Having said that though, we're still pretty happy with the performance… Over the first 15 or 16 months, the fund's up 43.5% versus S&P/ASX Small Ordinaries Index (ASX: XSO) up 13.5%. So we've been able to recover those losses and generate strong returns, post that initial selloff. So, in terms of wrong timing, that would've been nice to launch 2 months later.

MF: Which stock are you most proud of from a past purchase?

MH: Post that sell-off, it led to some of the best buying opportunities that we've seen in a decade since coming out of the GFC. A lot of stocks were down 60%, 70% in the smaller micro-cap end of the market. 

So we found some incredible buying opportunities through that March, April, May period. To call out a couple: Eagers Automotive Ltd (ASX: APE), one of the largest automotive companies here in Australia. We initially started buying shares in AP Eagers at $3.30 back in March. Shares today are around $15. So it's performed very strongly for us. 

Capital Health Ltd (ASX: CAJ), which I mentioned earlier, we started buying it back in April last year at 18 cents. It's now 34 cents. 

People Infrastructure Ltd (ASX: PPE), we participated in a placement at $1.10 and then bought more at $1.50 in April last year. Those shares are now $4.70. 

So, there were a couple of really incredible buying opportunities that we saw coming out of that COVID sell-off. And that's what's really set up the performance that we've been able to deliver over the last 12 months — being able to buy into some high quality companies at very depressed valuations.

MF: At the time, was it nerve-wracking not knowing how we'd recover out of the pandemic?

MH: Oh, you can never be entirely certain. But when both the government here stepped in with JobKeeper and the Federal Reserve stepped in with a massive stimulus program in the US, that was a key catalyst for us. 

I remember coming out of the GFC, we had QE one, two, three [rounds of stimulus] and they were big amounts of money that were going into the financial system. As part of the COVID response in the US, the amount of stimulus that's been put into the market meets around 2.5 times QE one, two, and three combined. 

So it's an incredible amount of liquidity that's gone into the market. And so, when we saw that occurring, we believed that that was going to be a big tailwind for the market. 

The other thing that we noticed in probably late April, early May, was given the stimulus here in Australia — JobKeeper specifically, and also the ability for people to take money out of super — that was going to be very, very supportive of the retailers. We made some really good investments in some of the online retailers.

We sold a lot of them in August, September last year, but we had holdings in Adairs Ltd (ASX: ADH), Shaver Shop Group Ltd (ASX: SSG), Temple & Webster Group Ltd (ASX: TPW), Kogan.com Ltd (ASX: KGN), Nick Scali Limited (ASX: NCK).

A lot of those retailers performed really, really strongly through that period… It was very clear by looking at Google Trends, as an example, you could see that the hits of today's online retailers websites were just growing at an incredible rate through that period. People were spending that stimulus money. 

Don't get me wrong, it was concerning in March — particularly for us, because we know we just launched a fund two months earlier. But as the market started to recover, we turned around and put money back in the market. 

To put some numbers around that, at the end of March, we were holding 40% of the fund in cash. So we had increased cash levels in that final week of February and first couple of weeks of March.

We were preparing for an elongated bear market. And typically bear markets go for 9 months. We were preparing for a large global recession — so we were preparing for the worst. Then we had to pivot quite quickly in April when all of that large stimulus was announced.

The post 8 ASX shares that supercharged us out of COVID-19: analyst appeared first on The Motley Fool Australia.

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In part 1 of our interview, Forager Fund senior analyst Alex Shevelev explains how his ASX-listed fund nabs under-appreciated bargains, plus the stock it's still holding after 9 years.

Investment style

The Motley Fool: What's your fund's philosophy?

Alex Shevelev: At the Forager Australian Shares Fund (ASX: FOR), we're opportunistic investors. We hook and gravitate towards unloved and under-appreciated stocks. And it's often stocks and sectors that others aren't able to, or won't, be particularly interested in.

The fund is a listed investment trust. So it's listed on the ASX and can be purchased in the same way as other ASX shares. We're currently trading at a 10% discount on its net asset value.

MF: To give our readers an idea, what are your two biggest holdings?

AS: There are actually two very interesting names. 

Mainstream Group Holdings Ltd (ASX: MAI) is actually our largest holding at the moment. You may have seen the auction process for Mainstream that's been ongoing for about the last couple of [months]. 

But I might take you back to the beginning. We've actually been the shareholder in Mainstream since the IPO [initial public offering], the largest institutional shareholder, and the business has some really interesting characteristics. It is a highly recurring revenue stream. Once a fund manager like Magellan signs up for fund administration services, they usually don't change for a very long time… 

The business has been growing really well but didn't quite attract investor attention and, in fact, spent the better part of the last 5 years somewhere between 40 and 60, 70 cents.

Meanwhile, they'd been growing revenue more than 20% per annum into June 2020. So we thought the business had been doing a pretty good job… but it wasn't really being recognised in the market. 

So we went to the board and management and proposed a strategy for communicating with investors to close that gap. But then also to put the business in a position where it could be auctioned off. And that auction strategy was because the business is more valuable, given it's a recurring revenue stream, in the hands of a much bigger player.

They've executed that really, really well. So [chief executive] Martin Smith and the team there communicated well, the stock ran up to a little over $1 at the beginning of the year. 

The management and the board, headed by Martin Smith — they actually gave up some of the upside on their own shareholdings in the business. They got the auction process started at $1.20. The subsequent bid to that was $2, and now we're at $2.65.

The second largest is RPMGlobal Holdings Ltd (ASX: RUL). They provide software for mining companies and mining contractors. It allows a mining company to work out, for example, what part of the deposit to mine next or when a piece of equipment needs to be maintained. 

So it's an enterprise software business. Those have some interesting characteristics. Chief amongst them is that revenue is often very sticky. Much like Mainstream, someone puts in a piece of software within a key process in a mining company, they're hesitant to change that, and that product will often be in place for a very long period of time. 

Interestingly, RPM was going through a transition that wasn't quite recognised by the market. They used to sell their software on a perpetual license and maintenance model, so they would charge quite a lot up front and then a smaller maintenance fee over time. They were moving that to a subscription model, which is roughly equal amounts over each year. 

That meant that revenue and profits were in fact lower in the first couple of years while the business was growing and doing quite well. [But] it didn't quite look like that when you looked at the accounts. 

The management team at RPM also attracted us to the business. So [chief executive] Richard Matthews is an executive in this space that has done a lot with enterprise software businesses in Australia. He took over and sharply increased the spend on software for the business and really went about developing some products that are best-of-breed, the best technology, and is happy to spend money developing those products. 

It could be another M&A candidate. Even without that, though, we think in the financial year 2023, RPM will be trading at a price-to-earnings ratio of about 15 times, excluding the excess cash on the balance sheet. Then in the subsequent year that drops down to about 10 times.

Buying and selling 

MF: What do you look at closely when considering buying a stock?

AS: We start with: Is there a psychological edge to this purchase, or is there an analytical edge? I'll run through the two elements. 

The psychological edge is more like March 2020. Market panic, lots of uncertainty around COVID, lots of selling across the entire market. Other things in that psychological edge category: over-reactions to specific company news or to sector news, [and] motivated selling. 

For example, an investor might not be able to hold a particular stock if that stock drops out of an index or becomes too small for them — or the money is being redeemed and that investor is a forced seller. So that's the psychological edge component.

On the information edge side, we try to understand the businesses very well. So misunderstood business models are one of the interesting elements to that informational edge [as] I talked about RPM earlier. 

Often we get these opportunities in smaller stocks or in areas of the market that we know well — where we have spent time researching other investments.

Sometimes we pick up orphaned [businesses] that may not belong to individual markets. We had an investment in Virgin Money UK CDI (ASX: VUK), which we bought in April of 2020 — that's a UK bank listed in Australia. It creates a little bit of uncertainty amongst local investors who may not be across the business.

Beyond those reasons, the psychological and the informational edge, we do look at as much information as we can gather. So we look at the quality of the business. What it does, where it sits in the industry, what sort of returns on capital we can expect, how sustainable the cash flows of the business are. We look at the management aspects — who are we actually trusting with our money? The history of treating shareholders well and successfully running businesses, like the one they're currently running, is helpful. 

We are quite valuation-driven in our approach. So we do make sure that we pay an appropriate price for the cash flows that we expect and the growth of those cash flows over time.

MF: What triggers you to sell a share?

AS: Oftentimes, that's when the thesis is not playing up. So we think that a business should be progressing in a particular way and it's just not getting there. Something's gone wrong.

Perhaps it's something in the numbers, perhaps something in the environment and our confidence in the future cash flows that we had originally assumed gets dented. That's a situation where the thesis doesn't play out. 

Where the thesis does play out, we're also interested to see when we sell out of a stock. So again, we looked at our view of the appropriate valuation for the business to really drive the exit. We are cognisant, though, that oftentimes the businesses that we've gotten right continue to get better, and other investors may be more excited than us about certain stocks that may well inform our exit as well.

MF: Do you have a horizon in mind when you buy in?

AS: We're long-term investors in our stocks. So we've held one investment in the fund since inception in 2009, and we've held quite a few others for a very long time as well.

MF: What is the one you've held since 2009?

AS: That's Enero Group Ltd (ASX: EGG). It's a marketing services business which we've held for a long time, and it's had an interesting history over the last 10 years. One of the businesses in its marketing services umbrella has particularly started to perform very well over the last 12 to 24 months. And the stock price has rallied dramatically on the back of that as well.

Tomorrow in part 2 of our interview, Shevelev reveals the stock purchase that he's most proud of.

The post How to score a sneaky bargain: ASX fund manager appeared first on The Motley Fool Australia.

WAM runs a number of different funds/listed investment companies (LICs) including WAM Capital Limited (ASX: WAM) and WAM Microcap Limited (ASX: WMI). The WAM Microcap portfolio has performed particularly strongly since the bottom of the COVID-19 crash.

Lead portfolio manager Oscar Oberg spoke to Livewire about the market and some of the ASX shares and themes that WAM is looking at:

COVID-19 recovery

One of the main areas where WAM is finding opportunities at the moment is looking at companies, sectors and countries that have been particularly hit hard by COVID-19 but may soon go through a recovery phase. He was referencing the UK and US in-particular.

Some of the ASX shares that he mentioned were: Pendal Group Ltd (ASX: PDL), Virgin Money UK CDI (ASX: VUK), Reliance Worldwide Corporation Ltd (ASX: RWC), Corporate Travel Management Ltd (ASX: CTD) and Flight Centre Travel Group Ltd (ASX: FLT).

One of the main ones he talked about was the UK bank Virgin Money which is/was trading at a 30% discount to its book value and could be well placed to rebound. The ASX banking recovery could prove to be a template with what might happen with Virgin Money over time.

Changing business models

WAM is also looking for ASX shares that are emerging from this COVID-19 period with a stronger competitive position or a better offering. Virtus Health Ltd (ASX: VRT) was one example that he talked about, suggesting that the IVF business may license its technology to IVF providers around the world.

Doing it this way wouldn't take up much capital and wouldn't be expensive, and could bring in some good earnings for the company over time.

Environmental, Social, and Corporate Governance (ESG)

ESG is becoming a bigger factor for investors as time goes on. One ASX share he mentioned was Pact Group Holdings Ltd (ASX: PGH).

Mr Oberg thinks that Pact is going through a recovery phase and the strategy of increasing exposure to recycling plants makes sense.

Left-field pick

One interest pick that the WAM portfolio manager talked about was Link Administration Holdings Ltd (ASX: LNK). WAM believes it actually has a lot of growth potential because of its 44% holding of PEXA, which is an online electronic conveyancing ASX share – it has a market share of 75% in Australia.

Mr Oberg thinks that PEXA could be a global growth story and the UK could be one of the first places that it attempts an expansion.

Small cap

WAM Microcap's entire purpose is to find small cap ASX shares and Enero Group Ltd (ASX: EGG) is one that he mentioned that has really turned itself around over the last decade. A sizeable amount of its earnings comes from US tech companies. WAM really likes the OB Media business for its growth potential, balance sheet, potential to make acquisitions and cheap valuation.

He revealed that Enero is the biggest position in the WAM Microcap portfolio.

Aged care

Aged care is another sector that makes up quite a sizeable position in the WAM portfolios. Estia Health Ltd (ASX: EHE) is one of the larger ASX share positions in WAM Microcap and WAM Capital.

WAM thinks the sector has bottomed and will benefit from the ramifications of the royal commission if the upcoming federal budget is favourable for the sector. Regis Healthcare Ltd (ASX: REG) is another pick within the sector. The aged care players also benefit from higher property prices.

The post 11 top ASX shares that WAM thinks will make great buys appeared first on The Motley Fool Australia.

How does Naos Asset Management invest?

Naos is led by chief investment officer (CIO) Sebastian Evans. NAOS Small Cap Opportunities is one of the listed investment companies (LIC) operated by Naos.

That particular LIC looks at businesses with market capitalisations between $100 million and $1 billion.

The fund manager has a number of investment focuses. It looks for businesses that are good value with long term growth potential. With its portfolio, Naos believes it's better to have a quality portfolio rather than numerous holdings. That's why it only holds around 10 positions in each fund, with each ASX share representing a high-conviction position.

Naos invests in the small cap ASX shares for the long-term. It considers the performance and the liquidity of its positions whilst ignoring the index. Performance can sometimes be quite variable when compared to the index.

It looks to invest purely in industrial companies whilst also considering the ESG factors (environmental, social and governance).

Enero Group Ltd (ASX: EGG)

Enero is a collection of businesses relating to marketing and communications.

Naos said that Enero released the strongest result out of all of the businesses in its portfolio. Enero's net profit after tax went up 129% compared to the prior corresponding period. The earnings before interest, tax, depreciation and amortisation (EBITDA) increased to 30% and this helped increase the fully franked interim dividend to $0.105 per share.

The fund manager said that all of the small cap ASX share's public relations and creative agency businesses have shown significant earnings resilience as most of their client base operates within the technology, healthcare and government sectors which have continued to operate relatively normally in a COVID-19-affected environment.

The other main earnings driver was the 50.1% holding of ad-tech business OB Media, which is based in the US.

Naos believes OB Media is on track to earn over AU$22 million of EBITDA, compared to just a couple of million just a few years ago. OB Media has been investing in its technology and people, as well as building relationships with Google and Microsoft. The fund manager said that OB Media is now benefiting from this investment. On a standalone basis, Naos thinks OB Media is worth more than $300 million because it is a high growth technology business that makes a good amount of profit with a negative working capital balance.

COG Financial Services Ltd (ASX: COG)

This small cap ASX share is made up of two different businesses, an asset finance broking arm and a lending arm.

COG announced an initial half-year dividend. Naos said the ASX share's low capital intensity nature of the business has resulted in the business being in a strong net cash position with plenty of flexibility for both capital management and further acquisitions.

The company also provided further clarity about the imminent rollout of its insurance broking capability. The fund manager thinks insurance broking could match the earnings generated by the finance broking divisions when taking a three to five year view.

Big River Industries Ltd (ASX: BRI)

Big River is an integrated Australian timber products small cap ASX share. It's involved from the procurement of raw materials all the way to the sale of finished products to end users.

Naos said that said that Big River Industries' result was strong, with EBITDA growing by 15% and was not affected by COVID-19.

The fund manager pointed out that some new information was provided with the result that could more than double its current annualised net profit run rate of $6.2 million.

The acquisition of Timberwood remains on track with the company trading well and forecast to contribute close to $3 million net profit based on the current run rate.

Naos said the net cash inflow resulting from the closure of the Wagga Wagga facility and subsequent relocation to Grafton is expected to be around $10 million with net profit accretion of around $1.5 million.

The fund manager continues to see the economic backdrop being beneficial for the company which may further contribute to the growth in future earnings.

The post 3 small cap ASX shares that powered higher in February 2021 appeared first on The Motley Fool Australia.

Let's take a look at what moved the Enero share price below the $3 barrier today.

Sale of Frank

The Enero share price is in the red after investors appear displeased with the company's offloading of Frank.

According to its release, Enero advised that it has sold off its 75% interest in Frank. The move was a part of a management buyout. Moreover, the deal was facilitated between Enero and Frank's management team, chair and founder, Graham Goodkind, and managing director, Alex Grier.

Together, both Mr. Goodkind and Mr. Grier hold the other remaining 25% stake in Frank.

Enero will recognise a non-cash loss of $9.5 million to $10 million from the sale of Frank. This is before the impact of income tax, after receiving a cash consideration payment of $1.5 million for the 75% interest in Frank.

In FY20, Frank delivered $9.3 million in revenue to Enero, representing 6.8% of total group net revenue. More recently, the company reported $4.3 million for the first-half of FY21, reflecting 5.3% of Enero's total earnings.

Management commentary

Enero Group CEO Brent Scrimshaw commented on the sale. He said:

Enero continues to sharpen its focus on the core agencies of the Group in line with its strategy announced at the 2020 AGM. The Frank sale will provide additional capital to allocate to high growth opportunities across the global network of the Hotwire & Orchard brands along with BMF in Sydney, in addition to future acquisitions that accelerate capability across the Group.

Frank chair and founder Graham Goodkind added:

Enero has been a great owner, shareholder, partner and friend of Frank and the advice and support that we've received over the last 14 years has been tremendous.

…I am grateful to Brent Scrimshaw and the Enero board for the way in which they have conducted negotiations and wish the Group every success in the future.

About the Enero share price

Despite today's fall, the Enero share price has accelerated over the last 12 months, gaining more than 110%. The company's shares took off strongly at the start of last month from around the $2 mark to almost $3 today.

The post Enero (ASX:EGG) share price falls despite being up over 45% in a month appeared first on The Motley Fool Australia.

The group is an international network of marketing and communications businesses with over 600 staff working in 14 cities around the world. Its key geographic regions are located in Australia, UK and USA. 

FY20 results

Highlights include a 4.9% increase in net revenue to $135.8 million up from $129.5 million in the prior corresponding period (pcp). The increased revenue was driven by organic revenue growth predominately in the USA market. Its international operations accounted for 57% of total revenue and 62% of earnings before interest, taxes, depreciation and amortisation (EBITDA). 

Operating EBITDA increased 17.7% to $24.4 million in FY20 compared to $20.7 million in FY19.

Earnings per share before significant items of 15 cents was in line with analysis forecasts and was up 5.6% compared to the pcp.

The directors declared a fully franked final dividend of 3.5 cents payable on 2 October 2020. It brings the annual dividend per share payout to 6 cents per share. Additionally, the dividend is a 9.1% increase in FY20 compared to FY19. 

Enero has high sector exposure to technology, healthcare and consumer staples, which were less impacted by COVID-19. Additionally, it has a low exposure to retail, travel and tourism clients which were more heavily impacted in the second half of FY20. 

Management comments

Ann Sherry, Enero Group chair, commented:

The group delivered an outstanding result particularly during challenging times in the second half of the year…Our strong sector exposure to technology, healthcare and consumer staples resulted in 4.9% organic revenue growth. The group is in a strong position to drive further growth in FY21 despite the health and economic uncertainties that lie ahead.

CEO Brent Scrimshaw added:

Enero is now in a strong financial position to accelerate our momentum and create the next chapter of growth through some of the best performing brands in the market in Australia, UK, Europe and the USA. I will be working with the teams to bring new capability to our existing group offering and investing in the expansion of our network in the coming year.

About the Enero Group share price

The Enero Group share price is currently trading at $1.66, up by 16.55% in today's trade. The group currently has a market capitalisation of $142.45 million.

The post Here's why the Enero Group share price leapt 16% today appeared first on The Motley Fool Australia.

Three results that you may have missed are listed below. Here's how they performed in FY 2019:

Bailador Technology Investments Ltd (ASX: BTI)

This technology focused expansion capital company had a very strong 12 months. With seven out of its ten portfolio companies experiencing upwards revaluations during the period, Bailador reported a 282% increase in gains on financial assets to $32 million. This ultimately led to the company reporting a 367% increase in net profit to $17.1 million and an 18.2% lift in NTA per share to $1.31. One of its revaluations was Straker Translations Ltd (ASX: STG), which lifted 26% to $12.6 million. But the star of the show was its investment in SiteMinder, which increased 30% to $72.9 million.

Enero Group Ltd (ASX: EGG)

This marketing and communications company's shares raced higher on Thursday after the release of its full year results. Enero reported a 24.9% increase in net revenue and a 53.3% lift in operating EBITDA. On a like for like basis, which excludes the impact of acquisitions, revenue was up 14% on the prior year and operating EBITDA was up 38% on the prior year. Enero Group CEO, Matthew Melhuish said: "We have delivered an excellent set of results for FY 2019 with strong numbers across our key financial metrics in all markets. There is positive momentum in many areas of the Group coming from new business wins and new talent joining the Group. The achievement of 14% organic revenue growth, excluding the impact of acquisitions, demonstrates we can achieve more working together as a Group."

RXP Services Ltd (ASX: RXP)

Although this leading digital services company delivered only flat revenue of $141.1 million in FY 2019, its digital transformation drove a higher quality and more resilient revenue base. This, and the benefits from organisation realignment, ultimately led to RXP Services reporting a 26.2% increase in EBITDA to $16.4 million. The positive result and its strong balance sheet allowed the board to declare a 2.5 cents per share final dividend and a 0.5 cents per share special dividend. This brought its total dividend to 4.75 cents per share, up almost 36% on FY 2018's 3.5 cents per share dividend. In FY 2020 management advised that it is "forecasting both revenue and earnings growth over FY20, with expectations to achieve double digit earnings growth."

The post 3 ASX full year results you might have missed on Thursday appeared first on The Motley Fool Australia.

• Not profit after tax of $6.1 million
• Revenue of $63.7 million, up 33%
• Operating EBITDA of $10 million, up 75%
• Operating EBITDA margin of 15.7%, up from 11.9%
• Earnings per share before significant items of 7.2 cents, up from 3.7 cents
• Interim dividend of 2.5 cents per share
• Excluding the impact of acquisitions revenue was up 15% and operating EBITDA up 40%
• Net cash position of $10.5 million

The market has sent the Enero share price 16% higher to $1.49 in response to what looks a strong result for the media, public relations, online marketing, and communications group that aims to grow organically and by acquisition.

Around half of the group's operations are now outside Australia where it sees more opportunity for growth, with North America representing around one third of group EBITDA.

On a conventional valuation basis the stock looks reasonably cheap on less than 11x annualised earnings, with a 3.4% dividend yield. The business also enjoys some digital tailwinds, but operates in a competitive space.

The post Why the Enero share price is rocketing today appeared first on The Motley Fool Australia.

It is operated by Naos Asset Management, with chief investment officer (CIO) Sebastian Evans at the head of the investment team.

I find it more comforting knowing that LIC management have a lot of skin in the game – they lose when other shareholders lose and win when returns are good. After today's dividend re-investment announcement, it was reported that Mr Evans now has nearly 1.22 million shares – worth $1.45 million.

However, it's not just management – shareholder alignment that I think is compelling.

This LIC targets the smallest shares on the ASX, meaning those businesses have (theoretically) the largest growth runways. Those targets could also be unknown to most other investors, meaning a lower starting valuation.

Some of its recently-highlighted holdings include Consolidated Operations Group Ltd (ASX: COG) and Enero Group Ltd (ASX: EGG).

But, it's only worth investing in small shares if it actually leads to results. At the end of September 2018 it calculated that since inception in February 2013 the portfolio has returned 16.2% per annum after expenses but before fees.

The fees aren't too excessive, but still sizeable with an annual management fee of 1.25% and also a performance fee of 15% of the outperformance of the benchmark of the S&P/ASX Small Ordinaries Accumulation Index if it beats it. Any underperformance must be recouped first before performance fees are paid.

Since inception it has generated better returns than most other LICs on the ASX. It has been paying out this strong performance as a regularly-growing dividend since the second half of FY13.

I really like the strategy of Naos holding a high-conviction portfolio of around 10 shares that it believes are long-term market-beating choices.

Foolish takeaway

Naos Emerging Opportunities currently has a grossed-up dividend yield of around 8.5% and is trading at a small discount to the last reported post-tax NTA for September 2018.

I believe it is one of the best LICs on the ASX to invest indirectly in small caps, along with WAM Microcap Limited (ASX: WMI).

I'd be happy to buy a parcel of Naos today and buy more on market weakness with the rise of volatility.

The post Is Naos Emerging Opportunities Company Ltd (ASX:NCC) one of the best ways to invest in ASX small caps? appeared first on The Motley Fool Australia.

The first is WPP Aunz Ltd (ASX: WPP). This is the dominant media communications advisory group in the sector, formed by the merger of global leader WPP with STW Communications. It consists of more than 90 businesses, advising the likes of Westpac and Vodafone. Because it is 60% owned by WPP, this stock is easily overlooked by Australian institutions, but for the private investor it's a steal on just 9x earnings and a fully franked 7% yield.

The next is HT&E Ltd (ASX: HT1), which stands for Here, There and Everywhere. Investors will remember it better as the old APN News & Media. It owns several trophy media assets, such as the leading outdoor advertiser Adshel, and radio stations such as KIIS and Gold.

Radio and outdoor advertising are two of the success stories of "old" media. The share price is currently depressed due to the loss of a large Adshel contract, but I'd be surprised if this can't be replaced. On 15x earnings, the shares are not as cheap as WPP, but you're getting some quality assets for the price.

Enero Group Ltd (ASX: EGG) is a much smaller version of WPP Aunz. However, it provides exposure to the USA and UK too, which are now almost 60% of group revenues. Despite re-organisation costs and the uncertainty of Brexit, which led to a reduction in after tax profits in 2017 to $4.9m, free cashflow was a healthy 7.7m. I expect a decent rebound in profits this year, especially in the USA, where the group's technology specialist Hotwire has been boosted by the acquisition of another tech player Eastwick Communications.

Finally, a "hidden gem". Aspermont Limited (ASX: ASP) is the leading information portal for the mining sector. It owns flagship publications such as Mining Journal. The group has successfully transitioned from print to digital media. Aspermont's subscription metrics are very strong, and advertising revenues are picking up now that the sector is in much better health. There is growth yet to come from Events, and expansion into Agriculture. Tightly held, Aspermont is capitalised at just $18m.

The post Why these 4 media shares should be on your buy list appeared first on The Motley Fool Australia.

It was an unlisted managed fund until December last year when it converted itself to a listed investment trust where it's now known as FORAGER AU UNITS (ASX: FOR).

Forager's Australian Shares Fund's top 5 investments to 30 June 2017 were Macmahon Holdings Limited (ASX: MAH), Reckon Limited (ASX: RKN), NZME LTD FPO NZX (ASX: NZM), Cardno Limited (ASX: CDD), and Enero Group Ltd (ASX: EGG).

Their willingness to depart from the index and focus on special situations sets them apart from many of their competitors in my opinion.

But funny things can happen when a managed fund closes and lists itself on the ASX.

The value of a fund at any point is now set by the on-market buyers and sellers of its securities, and the fund's day-to-day value is less influenced by the pre-tax Net Asset Value (NAV) of its underlying investments.

In Forager's case, there's clearly an emotive reaction to Forager's excellent past performance and investors are bidding the price of the Forager Australian Share Fund up well above its underlying value.

This is happening because of two things:  there are a lot of satisfied existing investors — my wife included — who don't want to sell, and there are new investors wanting a piece of the action.

The result is that Forager's listed Australian Shares trust is now trading at $2.11 per unit, well above its most recent pre-tax NAV of $1.75.

That's a 20% premium!

Investors buying these units at well above its pre-tax NAV have been warned though.

Forager's Chief Investment Officer, Steve Johnson, has tempered expectations by advising to not extrapolate its recent history of 25%+ returns that it achieved over the last 12 months.

Which is why I think the current listed unit price is a little silly.

There are other listed investment funds [listed companies or LICs in this case] out there too with a similar problem, including the ones below:

Foolish takeaway

If you're going to invest in a listed investment company or trust, I think you'd be better off by buying at or less than its pre-tax NAV which will give you a margin of safety.

Paying too much can leave you exposed to a nasty capital loss, a) because of the fall in the underlying investment, and b) because of the possibility of unitholders in the respective listed investment funds bailing out.

Given the choppiness of share markets in the short-term, it wouldn't take much to see a material decline in the underlying value of funds under management.

But of course, you shouldn't just look for 'cheap'. You also need to look for a manager that has an investment strategy that aligns with your personal investment philosophy, and doesn't charge an exorbitant amount in fees.

Alternatively, you can further research company share ideas yourself.

As a starting point, I can't recommend strongly enough the 11 simple lessons that are contained in the report below which I believe will give you some useful insights into managing your own money.

The post Are these listed investment companies safe in a share market crash? appeared first on The Motley Fool Australia.

Advanced Braking Technology Ltd (ASX: ABV) is engaged in the commercialisation, research and manufacturing of "safer brake" technology for commercial and industrial vehicles, particularly in the mining sector. Recently the company announced it has raised more than $2m in capital and hopes to develop its "safer brake" technology and intellectual property to become a major seller of brakes into trucking businesses. With a focus on garbage and heavy haulage trucks.

A second company offers an opportunity to tap into what could be a mega-trend of the future. If you've noticed that the daily news seems to increasingly revolve around what's happening on Twitter rather than the actual news events, then Newzulu Ltd (ASX: NWZ) may be a company to cash in on the digital future.

It's a journalism platform and news wire that aggregates and sells independently provided photos and videos of news events for distribution around the world. One of its main aggregation platforms is Twitter and in that sense it may be the first ASX-listed business able to use Twitter to monetise itself as a disruptive business model with digital tailwinds.

While media organisations like Fairfax Media Limited (ASX: FXJ) are slashing staff as revenues fall, Newzulu boasts a large and growing news team of some 150,000 freelance journalists and contributors worldwide. When a photo or video submitted by a freelancer is bought by a news agency the freelancer is paid the fee minus Newzulu's share.

The website has professional partnerships with the Australian Associated Press and Press Association and has a global reach via worldwide news burueaus. Unfortunately its backdoor listing status means it remains strictly for the watchlist for now.

Enero Group Ltd (ASX: EGG) is a marketing and communications company which operates out of Sydney, London and New York.

Notably in August two of Australia's most respected small-cap stock pickers, Contango MicroCap Limited (ASX: CTN) and Perpetual Limited (ASX: PPT) took significant positions in the company.

Contango has a strong stock-picking record having been relatively early investors in outperforming business like iProperty Group Ltd (ASX: IPP) and BT Investment Management Ltd (ASX: BTT).

Now valued around $100 million, Enero Group recently announced operating earnings of $9 million on $119.5 million of revenue, and has been restructuring itself in an attempt to return to consistent profit growth.

Shares have been up 10% over the last month to $1.17, and are still substantially below mid-August highs of $1.30.

The post 3 stock picks from a top investment adviser appeared first on The Motley Fool Australia.

Here are five stocks which rated a mention:

1. Altium Limited (ASX: ALU) operates within the technology and software sector and has sales globally. Despite an incredible share price run which has seen the stock gain 640% in the past five years, the company is still relatively small with a market capitalisation of $270 million.
2. WDS Limited (ASX: WDS) is a highly respected provider of specialised underground coal mining products and services. Given the current state of the coal sector WDS is certainly a contrarian play but one which could pay-off handsomely. In the meantime, the stock is currently offering an attractive dividend yield of approximately 8%.
3. eBet Limited (ASX: EBT) has a market capitalisation of $63 million and largely flies under the radar of many investors. The company operates in a number of exciting niches relating to poker machines and online gaming which offers good prospects for further growth.
4. Lindsay Australia Limited (ASX: LAU) is a refrigerated trucking provider. Lindsay's operations are focussed on the hot climatic region of Northern Queensland and can be viewed as a play on increased agricultural production and the China food bowl theme.
5. Enero Group Ltd (ASX: EGG) is a marketing and communications company that has survived a near-death experience. The stock has gained 160% in the past year and with the business having been stabilised some investors think there could be further gains ahead.

The post Refresh your portfolio with these 5 micro-cap stocks appeared first on The Motley Fool Australia.

Infrastructure, engineering and construction group Seymour Whyte Ltd (ASX: SWL) gained 5% last month and is up nearly 41% in the past year thanks to strong revenue and earnings growth. The earnings growth in turn led to a 43% increase in the interim dividend.

Australian Ethical Investment Limited (ASX: AEF) as the name suggests is a fund manager who offers its investment services utilising an ethical screening process. Like many other fund managers, AEF enjoys leverage to higher equity markets. In the past year the shares have gained 54%.

Enero Group Ltd's (ASX: EGG) share price has soared 64% in the last three months during which time it reported its interim results which showed a 135% increase in EBITDA. Having undertaken major restructuring efforts in the past few years, the marketing and communications group is on a much more solid footing.

Shine Corporate Ltd (ASX: SHJ) has followed in the footsteps of fellow legal services group Slater & Gordon Limited (ASX: SGH) by listing on the ASX. The stock has been a steady performer since listing almost one year ago, however the recent interim results put a rocket under the stock price with the shares gaining 27% in the past month alone.

Foolish takeaway

Despite enjoying stellar gains there is still reason to be positive about the potential for further share price gains over these four stocks. Each stock appears to be trading on undemanding multiples and given the outlook for earnings growth further share price appreciation could be warranted.

The post 4 soaring small stocks to watch in April appeared first on The Motley Fool Australia.