After more than a week of heavy selling, the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) index finally entered positive territory, gaining more than 2% to rise above 5000 points.
The best investors know that there's often no rhyme or reason to these day-to-day movements, and instead use the vagaries of the market to get a better price for companies they are buying or selling.
Here are four companies that smashed the market today:
Domino's Pizza Enterprises Ltd., (ASX: DMP) rose 9.1% to $53.85 after yet another expansion was announced, this time into Germany through a joint-venture with UK-listed Domino's Pizza Group Plc.
The expansion is expected to add a further 4-5% increase to Domino's earnings per share assuming the transactions settle in early 2015. Domino's has certainly been on a cracking run in the past few years, but investors would do well to remember that as the company gets bigger, its ability to 'move the dial' through acquisitions becomes limited both by its size and its funding options.
Trading on an exorbitant trailing Price to Earnings (P/E) ratio of 73, savvy investors might be better off looking for the next Domino's, rather than trying to buy this one.
Crown Resorts Ltd (ASX: CWN) soared 13.8% to $12.11 after media reports surfaced indicating that some assets may be sold to private buyers. Much like private equity interest recently announced in Greencross Limited (ASX: GXL), the news has acted as a catalyst to spur Crown's share price after more than a year down in the doldrums.
After a year of takeovers and buyouts, investors are greedily hoping for more mega-deals, which may be forthcoming given that the Australian dollar has plunged against the US dollar. Either way, Crown doesn't look overly expensive even after today's rise.
Santos Ltd (ASX: STO) lifted 5.3% to $3.45 after the price of oil rose overnight, providing some much-needed relief to nervous shareholders who have lost more than 15% of their investment in the last month alone. Future rises or falls depend almost entirely on the price of oil, and there is a curious disconnect between comments from major banks around the world and statements from oil cartel OPEC.
Many global banks have indicated the oil price could fall further, to US$35/barrel or even US$25 a barrel, yet the Secretary General of OPEC is on record as suggesting low oil prices will not continue and could rise in a few months to a year.
I'm inclined to listen to the guys who drill the oil, and this could be a development worth watching closely.
BHP Billiton Limited (ASX: BHP) shares also gained 5.4% to $17.15 on the back of a rising oil price as well as news that the US could begin exporting oil in an attempt to alleviate a storage glut that is depressing prices on American crude oil. BHP owns a number of oil and gas producing shale assets in the USA.
While this could offer a short-term reprieve, the value of other resources such as natural gas and copper have fallen in recent days and the overall result is likely to be an unchanged outlook for BHP, which I would not recommend buying today.
