The first week of the month is always an interesting time at fool.com, because our contributors get together to publish their list of favourite ASX stocks for the month.
We're also in 'confession season', which means investors can usually expect a few 'dirty laundry' updates as companies update investors on their performance in the lead up to the end of the financial year and reporting season.
Here's last week's latest updates at:
The Banks
Australia's big four banks, Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd. (ASX: NAB), and Australia and New Zealand Banking Group (ASX: ANZ) copped a pasting from Foolish contributors last week.
"Why are the big banks so unethical?" asked one article. "Do the big four banks have a culture problem?" asked another. ANZ made headlines for irking the corporate cop ASIC, and Senator Sam Dastyari warned that the big banks faced billions of dollars in fines if they continued to stonewall ASIC investigations.
(It seems unlikely that they will have to pay billions, but the chance of penalties is definitely rising)
Incidentally, shares in Westpac recently hit their lowest point all year, changing hands for $31.19.
Tech Stocks
Motley Fool analyst Matt Joass is excited about the potential for Senetas Corporation Limited (ASX: SEN), a tiny technology stock that could be a good way to profit from growing cyber-security risks. With recurring revenue and a number of important defence, government, and financial sector customers Senetas could be a good thing, but it's definitely not right for every investor.
Readers may be more familiar with Iress Ltd (ASX:IRE), which provides financial software to a variety of customers in Australia and overseas. A tendency to make acquisitions has gradually broadened Iress' product offering, and its latest acquisition could send another 'Buy' signal to investors.
Jobs portal SEEK Limited (ASX: SEK) also made an acquisition of sorts, increasing its stake in Mexican job website OCC Mundial and a similar venture in SEEK Asia. SEEK now owns 98.2% of Mexico's leading jobs website, and writer Tom Richardson explains what the stock has to offer at today's prices.
Food manufacturers
Recovering beverage manufacturer Coca-Cola Amatil Ltd (ASX: CCL) slipped below $10 in line with the falling ASX. After a number of uncertainties were cleared up at the annual general meeting, the stock looks appealing at $9.54.
Food manufacturer Patties Foods Limited (ASX: PFL) informed the market that underlying net profit this year should be around $15 million, including $1.5 million in costs experienced during the frozen berry recall earlier this year. Despite trading on a P/E of 10, there looks to be better alternatives out there.
The Losers
Shares in In-Vitro Fertilisation (IVF) company Virtus Health Ltd (ASX: VRT) plummeted some 22% during the week after an update revealed lower growth expectations despite the company confirming its guidance as recently as February. Similar company Monash IVF Group Ltd (ASX: MVF) is unlikely to be affected thanks to its small presence in the competitive NSW market.
Virtus wasn't the only company to experience a profit downgrade, with Metcash Limited (ASX: MTS) confessing it would book a $640 million dollar write-down due to an 'increasingly competitive trading environment'. Additionally the company will suspend its highly lucrative dividend for at least 18 months. Unsurprisingly shares in Metcash sagged 19% to $1.12, their lowest point in 14 years.
Not all companies were losers however, as G8 Education Ltd (ASX: GEM) acquired another 8 centres, taking its total number of childcare places to 35,125 – an increase of 2.5%. While G8 carries risks, the company is carrying out its aggregation strategy successfully, and within its targeted price range (4x EBITDA for the latest purchase). One analyst has put a target of $6.70 on the stock, an 80% premium to today's prices.
(Contributor Owen Raskiewicz discusses G8's value further in his article here)
Shares in baby food and formula producer Bellamys' Australia Ltd (ASX: BAL) soared after the company announced that its second-half profit would be roughly in line with the first half. This represents a major increase over previous results and Bellamy's could be a stock to watch.
Last but not least – while we're on the topic of small caps – former fool.com contributor (now Fool analyst) Claude Walker shares some mistakes he made investing in small-cap stocks recently. Small-caps can definitely deliver great performance, and the more prepared you are, the better you'll perform in the sector. Read on to discover two small-caps that are much less volatile than Claude's unfortunate investment!
