Over the past week, the S&P/ASX 200 Index (ASX: ^XJO) (Index: XJO) slipped down 1.5%, thanks partly to the drop in iron ore prices. Despite that, here are three stocks that beat the market's returns handily.
Cabcharge Australia Limited (ASX: CAB)
The company that operates taxi and public transport fee service networks is up 8% over the past five trading days, but 7.4 % of that gain came on Thursday. Recently, it announced a 7.4% fall in reported full year profit. It was thought that a surcharge reduction on the amount taxi users are charged in NSW would hurt the company's revenues.
However, a similar change in Victoria previously seemed not to have the expected negative effect in the FY 2014 full year results. Riders are still paying by card, the revenue worries abated and investors pounced. The stock has risen about 45% since early July and now yields a healthy 4.9% dividend fully franked.
M2 Group Ltd (ASX: MTU)
The internet service provider and telecommunications company with brands such as Dodo, iPrimus and Commander delivered a stunning 60% increase in full year underlying net profit recently. On Thursday, it closed at $7.99 after hitting a new all-time high of $8.07. Over the past week it is up 5.27%. The stock yields 3.3% fully franked.
In addition to telecommunications, the company has entered the utilities payment space. It is offering to bundle broadband with energy utility payments, which is especially attractive to businesses looking for ways to save money and control power consumption. It has launched its 4G mobile service and had strong organic growth in customer numbers in the past year.
Cover-More Group Ltd (ASX: CVO)
This company operates in the travel insurance and medical assistance markets. The company listed in December 2013 and reported a full year 14.1% gain in pro-forma net profit. It is expanding overseas in Asia to take advantage of the much larger travel markets there. The stock is up 5.7% over the past week. About one month ago, the share price was as low as $1.70. Since then it has achieved a whopping four-week gain of 41.1% after closing at $2.40 on Thursday.
It has continued e-commerce growth and has launched its youGo travel insurance in collaboration with Flight Centre Travel Group Ltd (ASX: FLT), the number one leading travel agency. I find this quite attractive for the stock since that will potentially give Cover-More more business and larger customer volumes.
All three stocks have surprised and impressed the market and investors have moved in quickly. Amongst them, I would prefer M2 Group because it is establishing itself strongly in an industry known for being fast-paced and highly competitive. They are focusing on adding more services that everyday people have a strong need for and it is paying off.
To round off this group, there is one more stock with solid dividends and good growth that you should know about. It isn't a widely known company, yet this small-cap ASX stock has been called by The Motley Fool's analysts as "The Top Stock of 2014 – 2015".
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