Reporting season is about to start. It's the most exciting part of the financial year to me as most of the ASX businesses report their annual figures.
Some businesses will disappoint the market. Some businesses will do about as good as the market expects. Also, I think there'll be a few winners that report earnings better than the market is expecting.
Here are four businesses that I think could surprise the market in a positive way:
Healthscope Ltd (ASX: HSO)
The Healthscope share price has been under pressure ever since it reported that patient numbers weren't growing. If patient numbers aren't growing then revenue and profit won't grow either.
The market really isn't expecting much from Healthscope this reporting season but I think it could surprise. In the long-term the business will grow as the ageing demographics come into effect and boost the number of patients.
Healthscope is trading at 18x FY18's estimated earnings.
NIB Holdings Limited (ASX: NHF)
NIB has surprised the market time and again each time it reports more policyholders and profit than expected. NIB has seen its share price fall from $6.44 to today's $5.73, but I think it could rise again when it reports in August.
There has been a lot of negativity surrounding private health insurance but NIB has continually shown that it's able to grow even with the issues.
NIB is currently trading at 21x FY17's estimated earnings.
Challenger Ltd (ASX: CGF)
Challenger has continually surprised with how much it has grown annuity sales. Challenger is a difficult business to fully understand or value, but it is clear to see how popular its products are becoming which is why I think its annual results could be strong.
It continues to grow its distribution channels which promises even further growth over the next few years.
Challenger is currently trading at 19x FY17's estimated earnings.
Domino's Pizza Enterprises Ltd (ASX: DMP)
Domino's shareholders have been on a rollercoaster over the last year. However, I don't think Domino's is anywhere near done growing yet – it has huge potential with growing profit margins, its number of outlets and same store sales growth.
Domino's is currently trading at 39x FY17's estimated earnings.
Foolish takeaway
I think all four of these will surprise the market and could generate strong short-term returns, whilst also promising long-term returns too.
