Earnings season always causes some sharp price movements as investors re-evaluate their stocks in light of where they expected them to be and how they actually performed.
Four of today's biggest risers are benefiting from some positive re-valuation and have successfully smashed the broader S&P/ASX 200 (INDEXASX: XJO) index, which is down 1.61% so far today.
Here's what you need to know:
Greencross Limited (ASX: GXL) – last traded at $7.04, up 2.9% for the day
After a strong report on Monday it's no surprise that Greencross has continued to soar throughout the week. After a mass sell-off earlier this year, investors are again awakening to the company's growth potential – both by acquisition and organically – and buying back into the stock.
With Greencross aiming to self-fund its expansion from 2017 onwards without adding to debt or conducting any further capital raisings, I believe the company has a decent shot at meeting its stated goal – capturing 20% of the Australian market over the medium term (up from 8% currently).
As a result, I would not be surprised to see Greencross rise further in the near term.
Newzulu Ltd (ASX: NWZ) – last traded at $0.07, up 6% for the day
Disruptive media company Newzulu is delivering more positive news to shareholders after a bunch of new earnings accretive contracts have been announced in recent weeks. Most of the contracts are small and reflect uncertainty around the service's value on behalf of buyers, but they are a step in the right direction for shareholders.
The latest contract with a major global news agency has plenty of upside potential if Newzulu can deliver on its promise to deliver up-to-date and interesting content.
It's still a high-risk, speculative buy but the company is definitely moving in the right direction and I wouldn't be surprised to see its share price rise further in the near future.
Primary Health Care Limited (ASX: PRY) – last traded at $4.68, up 5.1% for the day
Primary Health Care returned to favour today after announcing modest revenue and profit growth for the year. Investors apparently liked the establishment of a real estate investment trust, which will help pay down debt and fund the establishment of new centres.
I particularly felt that the announcement of new integrated 'super centres', one-stop shops for general medical services, diagnostics and pathology were a solid development and the expected return on invested capital of between 15-20% for these centres was even better.
Primary still faces some headwinds but over the long-term I expect it to be a solid performer and today's price looks undemanding.
JB Hi-Fi Limited (ASX: JBH) – last traded at $21.02, up 4.5% for the day
Last but not least, JB Hi-Fi has had some exciting days on the ASX after another strong performance, with the stock apparently surprising many investors. JB has delivered the goods despite tough trading conditions for a number of years now and the company's ability to meet consumer trends over time is a huge positive in an era of constant change.
With a strong dividend, good cash flow, its expansion strategy and an on-market buyback on the cards, investors should expect continued quality in coming years. Trading on a Price to Earnings (P/E) equation of ~15 even after today's rise, JB also looks reasonably priced.
