3 ASX stocks that beat the market yesterday

The market average was flat – but some companies performed much better

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published April 5, 2012 4:07 pm AEST

The benchmark S&P/ASX 200 index closed 3 points or 0.07 per cent lower to 4,333.9 yesterday (Wednesday April 4), weighed down by negative leads from global markets. The US Federal Reserve was the main culprit, as minutes from their latest policy meeting dampened expectations of more government stimulus.

Falls in BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) shares were the biggest drag on the index with BHP down 43 cents to $34.75 and Rio down 48 cents to $66.30. Between the two, they make up over 13 per cent of the index.

However, the following three stocks did much better than the average.

Ardent Leisure Group (ASX: AAD), was up 7.3 per cent, likely buoyed by an analyst report which suggested that despite wet weather impacting on theme park earnings, the group's expansion plans for its bowling, gym and Main Event businesses continue to offer earnings growth potential. Deutsche Bank sees scope for Ardent Leisure to grow earnings by 16 per cent in 2013, and possibly as high as 18 per cent. On that basis, the group is trading on a forecast P/E of just 7.3 times.Ardent Leisure owns and operates theme parks such as Dreamworld, Whitewater World, marinas, bowling centres and health clubs, and indoor entertainment centres in the US.
QBE Insurance Limited (ASX: QBE) continues to rise from its low of $9.88 back in January 2012, rising another 3.4 per cent yesterday, as it announced that the company will increase premiums in Australia by more than 7 per cent in 2012 and stop providing cover to some parts of far north Queensland and northern NSW, after it was hit by natural disasters. The company is also cutting its exposure to the US MidWest, which has been hit by severe weather over the past year. QBE also announced another acquisition, this time in the UK where it has purchased the rights to renew policies of customers of commercial insurer Brit. Brit generates about $770m of continuing gross premiums, and will give QBE a 5 per cent share of the UK's regional commercial insurance market.All up, QBE appears to be doing the right things by shareholders.
Aristocrat Leisure Limited (ASX: ALL) was up 2.9 per cent, continuing its rise, up over 17 per cent in the least month, on expectations of a much improved 2012 financial year. I covered Aristocrat recently in more detail here. In summary, 2011 financial year net profit was up 21 per cent to $66.1m, debt is being reduced, and the falling Australian dollar will have a positive impact on the company's financials.

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Motley Fool contributor Mike King owns shares in QBE. The Motley Fool's purpose is to educate, amuse and enrich investors. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Click here to be enlightened by The Motley Fool's disclosure policy.

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