3 ASX stocks that beat the index on Friday

Averages can be deceiving – the market fell 1%, but these companies bucked the trend

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 June 12, 2012 1:31 pm AEST

The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) fell 1.1% to close at 4,064 on Friday. Investors were alternating between worrying about Europe's economic woes, and the next day optimistic that Europe will somehow resolve its issues. This was compounded by US Federal Reserve boss Ben Bernanke refusal to discuss any future stimulus action to boost US growth.

These three stocks climbed by 2% or more, out-performing the index by a decent margin.

Echo Entertainment Group Limited (ASX: EGP) climbed 4.4% to $4.49, on news that chairman John Story had resigned and Asian gaming giant Genting had taken a 5% stake in Echo. James Packer's Crown Limited (ASX: CWN) owns a 10% stake in Echo as well, igniting speculation that a bidding war could erupt. A report in the Sydney Morning Herald has suggested that alternatively, Genting and Crown could work together to split up Echo, with Crown taking the Sydney casino, and Genting getting Echo's Queensland assets, including Jupiters Gold Coast casino, Brisbane's Treasury Casino and Jupiters Townsville Hotel & Casino.

The Reject Shop Limited (ASX: TRS) rose 3.7% to close at $9.89, although a long way off its high of $13.06 set in March this year. It appears that investors have been taking advantage of the price fall, and are jumping back into the stock. It still doesn't appear to be a bargain at the current price though, trading on a trailing P/E of 15.5, and paying a dividend yield of just 3.2%.

James Hardie Industries SE (ASX: JHX) increased 2.2% to close at $7.40. In the last year, James Hardie has seen its share price rise by over 30%, as the US housing market appears to be recovering. That market generates about 75% of the company's revenues, so the recovery should be good news for James Hardie's profit results. With a falling Australian dollar, a dominant market share in fibre cement, and solid profit margins, it appears to be the favoured prospect in the building materials sector.

Other stocks that gained on Friday included Seven West Media Limited (ASX: SWM), up 1.9% to $1.19, Fairfax Media Limited (ASX: FXJ), and Aurora Oil & Gas Limited (ASX: AUT), up 1.5% to $3.36.

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Motley Fool contributor Mike King doesn't own shares in any companies mentioned. 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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