Is it time to buy Navitas Limited and G8 Education Ltd?

Both these stocks have been hard hit after posting disappointing results. Is now the time to jump into these fallen angels?

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A month ago the market was weighed down by a plethora of macro risks and traded down 5% from the start of the year. Whilst these risks remain a concerted effort by central banks across the globe to address these issues by loosening monetary policy stoked a 12-day winning streak on the S&P / ASX 200 (Index: ^AXJO) (ASX: XJO), with the index now 8% above last year's close despite the recent pull back.

This re-enforces the notion that you cannot time the market – the best strategy in the stock market is the buy and hold strategy employed by best the investor the world has ever seen, Warren Buffett. However it doesn't mean you can simply buy any stock – it needs to be a great company and if you manage to get it on the cheap then even better.

Despite the recent strong run there are still quality stocks that have bucked the trend, and below are two such stocks that could be great additions to your portfolio.

Navitas Limited (ASX: NVT)        

The stock fell over 17% after it reported a 13% fall in first half net profits. However underlying net profit actually increased by 12% if the impairment on SIBT is stripped out.

There's a lot to like about the stock – its highly rated Australia university pathway programs are set to get a boost from the significantly lower Australian dollar.

Outside of Australia the company is targeting the U.S. as a key growth market. Specifically it is expanding the product offering from SAE, which will see the division's addressable market jump from $100 million to $4.1 billion. The 27% increase in first half revenues is an exciting indication of things to come.

At $4.64 it's trading slightly above its 52-week lows and could turn out to be a bargain in five years' time.

G8 Education Ltd (ASX: GEM)

Despite posting a record net profit the stock slumped 10% because it came in slightly below expectations. The country's largest for-profit childcare centre is set to follow its aggressive acquisition strategy, announcing the purchase of 12 centres after acquiring 203 new centres in 2014.

The group has a good track record with its acquisitions, and the combination of a fragmented operating environment and further interest rate cuts suggests that 2015 could be another big year on the acquisition front.

At $4.28 the stock has fallen nearly 24% since mid-September. It also boosts a meaty dividend yield of 4.4% – considering this represents only 44% of net operating cashflow there is definitely room to increase this.

Navitas and G8 Education are good prospects, but our top analysts at the Motley Fool have just announced their top stock for 2015. Be sure to check out what it is.

Motley Fool contributor Simon Chan does not own shares in any of the companies mentioned in this article.

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