August has been a good month for investors in some of Australia's favourite mid-cap stocks. Not only have they benefitted from some terrific earnings reports, but the outlook for 2014-15 appears to be strong, especially for companies with an overseas presence.
Take Domino's Pizza Enterprises Ltd. (ASX: DMP) as an example. The company's share price is up nearly 23% this month, and nearly 90% over the last 12 months due to investor demand for high-growth stocks.
All of the group's gains in August have been made since Domino's released its full-year report on August 12. Net profit rose 50% year-on-year as the acquisition of a stake in Domino's franchises in Japan performed better than expected, and the share price responded due to management's optimistic outlook for further expansion in the region.
Similarly, technology stock Iress Ltd (ASX: IRE) surprised the market last week with a better-than-expected 48% jump in net profit and 19% increase in dividend payout. The acquisition and integration of a business in the UK has performed exceptionally well and has resulted in nearly 50% of group revenue originating from outside Australia. Analysts are expecting companies with significant offshore exposure to deliver stronger profit growth than locally-focussed companies as a result of poor business confidence and a gradually weakening Australian dollar.
Finally, analysts are boldly predicting that the worst could be over for Cochlear Limited (ASX: COH) shareholders following an outstanding earnings report that pushed the share price up 10% over the last month. While margin compression didn't excite analysts, the promise of new products and an increase in revenue (particularly in the second half of the financial year) has helped to boost market sentiment about the company. Importantly, the company is expecting further product approvals in key global markets that have the potential to boost revenue, margins and net profit.
