Is there any value to be found in BT Investment Management Ltd, Estia Health Ltd, and Vocus Communications Limited?

Here's why BT Investment Management Ltd (ASX:BTT), Estia Health Ltd (ASX:EHE), and Vocus Communications Limited (ASX:VOC) hit their highest point all year this week.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Despite having lost 11% in the past six months, the S&P/ASX 200 (INDEXASX: XJO) index is down just 4% for the year.

Strangely enough, a number of shares continue to reach new heights, including a superannuation fund manager, a recent aged care IPO, and a growing telecommunications giant.

Here's what you need to know about the latest rises at:

BT Investment Management Ltd (ASX: BTT) – last traded at $12.03, up 98% for the year

Like annuities provider Challenger Ltd (ASX: CGF), shares in BT Investment Management have soared in recent times as investors increasingly twig to Australia's booming superannuation industry.

The most recent catalyst for BT's rise was its latest annual report, which disclosed a rather ordinary 2% increase in revenue and 4% increase in net profit after tax. BT is one of the larger fund managers in Australia with $74bn Funds Under Management (FUM) and a majority of its funds are beating 3 and 5- year benchmarks before fees.

However, I expect that the spotlight on investing practices and fees could bring some pain in the near term – as could lower performance fees last year, given that funds under management often migrates to higher performing funds.

BT Investment looks fully valued and I would not buy shares at today's prices.

Estia Health Ltd (ASX: EHE) – last traded at $7.55, up 53% for the year

Aged care facility operator Estia Health has soared again in recent days after the company announced the acquisition of a further four facilities last week. The company has added 687 places in Financial Year 2016 so far (for a total of 4697), consistent with its stated strategy of adding 500-1000 places per year.

While the stock is experiencing a strong run, it is difficult to see much value given its lack of profitability, elevated price (50 x this year's forecast earnings) and aggressive expansion strategy. Estia looks likely to deliver growth to shareholders over the long term, but for the money there are better investments available right now.

Vocus Communications Limited (ASX: VOC) – last traded at $6.80, up 16% for the year

Vocus hasn't shot the lights out with its share price movements this year, but the company has shown significant ambition by gobbling up first Amcom Telecommunications Limited (ASX: AMM) and M2 Group Ltd (ASX: MTU).

Ultimately, the telecommunications sector, Vocus' assets, and its recent acquisitions are highly likely to deliver market-beating returns to shareholders over the long term. Indeed, Telstra Corporation Ltd (ASX: TLS) may have to start looking over its shoulder.

However, at today's prices and with a significant period of integration and consolidation ahead of it, Vocus' doesn't look like an outstanding buy. I expect profits and the share price will grow over the medium term, but I also suspect interested investors will find a better entry point if they are patient.

Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »