Welcome to Friday, Foolish readers. The S&P/ASX 200 (INDEXASX: ^XJO)(ASX: XJO) fell 0.2% today but still managed to finish the week up 1% at 5,088 points.
As ever, a few stocks considerably outperformed, and here's why:
A2 MILK FPO NZ (ASX: A2M) soared 31% to $1.36 following another profit upgrade as a result of higher-than-expected sales of its infant formula. As a result, full-year Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) are expected to be at least 50% higher compared to last year.
Despite the rise, A2 Milk could continue growing rapidly as the Chinese market for baby formula is enormous and growing. I expect shares to soar in the near term as investors hope A2 turns into the next Bellamy's Australia Ltd (ASX: BAL).
Greencross Limited (ASX: GXL) shot up 9.6% to $6.37 as anticipation builds around a potential bidding war for the company, with two buyers reportedly interested in the company. Despite the rise, Greencross' shares do not look expensive at today's prices, although investors must be cautious that a takeover bid may not materialise, and prices could collapse again.
I continue to hold my Greencross shares, and it would take prices above $7 to get me thinking about selling.
Corporate Travel Management Ltd (ASX: CTD) rose 7.5% to $12.07 after the company announced a takeover for Californian business Montrose Travel. The acquisition is expected to be immediately earnings accretive and will be paid through a portion of stock (20%) as well as operating cash flow and short-term US Dollar debt (80%).
Corporate Travel looks quite expensive trading on a Price to Earnings (P/E) ratio of 38, although there's no question it is delivering the goods for shareholders.
Bega Cheese Ltd (ASX: BGA) shares gained 7.5% to $6.13 today on no news, although it seems likely that the strong performance of A2 Milk played a part, given that Bega has commenced a joint venture with Blackmores Limited (ASX: BKL) to start selling infant formula in China, where Blackmores already has a strong presence.
If the performance of these other companies is anything to go by, Bega shares could be set to soar further as well.
