Why these 3 ASX companies popped yesterday

The market was up yesterday – but these companies trounced the index

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 May 23, 2012 3:54 pm AEST

Industrial companies were the big winners on the ASX yesterday with the S&P / ASX 200 Industrials Index (Index: ^AXNJ) (ASX: XNJ) climbing 2.3%.

Here's a rundown on why these three industrial companies popped yesterday.

Vocus Communications Limited (ASX: VOC) jumped 9.9%, or 16 cents to close at $1.77. Like many stocks, Vocus has seen its share price hammered in the last month, falling 16%. There has been no particular reason for the share price falls, and little change in its underlying business strength. As we mentioned in our weekly update on Monday, Vocus' business is unlikely to be heavily impacted by either a flailing Europe or a slowing Chinese economy.

In fact, Vocus released good news on Monday, when it announced that it was acquiring Maxnet Limited, a leading New Zealand based data centre operator and Cloud provider for NZ$9.5m. The acquisition complements Vocus' existing data centre product offerings, and is expected to contribute NZ$2m in Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), in the 2013 financial year.

Macquarie Radio Network Limited (ASX: MRN) surged 11.7% to close at 62 cents. Macquarie Radio owns two of Sydney's leading radio stations, 2GB and 2CH and has 26% of the Sydney market radio revenue. The company's joint venture with Pacific Star Network Limited (ASX: PNW), Melbourne Radio Operations, was recently placed into administration, due to poor financial performance and operating losses. For the six months to December 2011, the company reported a 62% fall in net profit, and expects 2012's financial year net profit to fall by a similar margin compared to the previous corresponding period.

The price rise maybe related to reports in March 2012 that Gina Rinehart is considering a plan to bankroll MRN's efforts to acquire the radio interests of Fairfax Media Limited (ASX: FXJ).

Newsat Limited (ASX: NWT) was up 7.7% to close at 70 cents as investors anticipated that the company will be awarded $230m of export financing by the end of this month. The funds will provide two-thirds of the capital needed to launch Australia's first satellite, Jabiru-1, sometime in the December quarter of 2014. According to the Australian Financial Review, the company is expected to launch a large capital raising in June 2012 to finalise the funding requirements for Jabiru-1, with the majority of the funds to be raised from overseas investors.

Jabiru-1 is expected to have a 15-year life, and achieve revenues of over $US2 billion and net profits of at least US$1 billion over the satellite's lifetime. With that prospective income and net profit, Newsat could be a stock to add to the watchlist.

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Motley Fool contributor Mike King owns shares in Vocus. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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