The S&P/ASX 200 (INDEXASX: XJO) has increased more than 26% for the year and is currently trading near all-time highs. The strong market has supported some great share price performances, including the 3 companies below.
Let's take a closer look at why these 3 ASX 200 shares doubled in 2019.
Pro Medicus Limited (ASX: PME)
The Pro Medicus share price opened the year at around $11.30 and surged to an all time high of $38.39 high in September. Since then, the company's share price has been sold off and Pro Medicus shares are currently trading around the $23 mark. Despite the sell-off, the Pro Medicus share price is still up more than 116% for the year.
Pro Medicus is a quality company in the medical imaging sector and has a competitive advantage over other companies in how it approaches data management. Pro Medicus software allows for easy transfer over mobile devices via direct streaming, rather than compressing and sending files.
The company reported earnings for FY19 earlier this year, which saw an 83.1% increase in underlying net profit after tax of $22.74 million. In addition, Pro Medicus paid a 10.5 cent fully franked dividend for the financial year, which was up 75% from the previous year. Despite paying an increased dividend, Pro Medicus was also able to grow its cash position from $25 million to $32 million for FY19. The company was also included in the ASX 200 earlier this year after meeting the criteria of market capitalisation and liquidity.
Jumbo Interactive Ltd (ASX: JIN)
Jumbo Interactive is an online platform that has exclusive distribution agreements with leading lottery companies. The company powers the Ozlotteries.com website, which provides consumers with a wide range of domestic lotteries including Powerball, TattsLotto and Ozlotto.
The Jumbo Interactive share price opened the year at around $7 and rocketed to an all-time high of $28.00, but has since halved to around $14 after releasing an underwhelming trading update.
In its trading update, Jumbo Interactive notified the market that it expects profit margins for the first half to be narrowed due to an increase in business development costs. The company expects net profit after tax to be $14.3 million, reflecting 13% growth. Earlier this year, the company reported earnings for FY19 that beat market expectations. Jumbo Interactive delivered revenue growth of 64% to $65.4 million and growth in net profit after tax of 124% to $26.4 million.
Despite the setback, the Jumbo Interactive share price is still up more than 110% for the year.
Nanosonics Ltd (ASX: NAN)
Nanosonics has been a star performer in 2019, with the company's share price up more than 123% for the year. Nanosonics is a global provider of sterilisation devices to hospitals and healthcare centres. The company's flagship Trophon device sterilises ultrasound probes without the use of chemicals. The company also has a sticky business model and
Earlier this year, Nanosonics delivered a strong half-year report, highlighted by a 221% increase in net profit of $7.1 million and record first-half sales revenue of $40.7 million. Sales of Trophon devices increased 11% and contributed $16.4 million to revenue, while revenue from its patented consumables were up 59%, generating $24.3 million in revenue.
Foolish takeaway
In my opinion, the greater a company's share price has stretched over 12 months, the more caution should be exercised. The price action reflects the underlying business, however it could be over-valued as well. I think a more prudent strategy would be to keep these companies on a watchlist and wait for a pullback before making an investment decision.
