It has been an eventful day for the S&P/ASX 200 Index (ASX: XJO). After sinking lower in early trade, the benchmark index is trading roughly flat at 5,557.6 points at the time of writing.

Four shares that have not let that hold them back are listed below. Here’s why they are storming higher:

The ALS Ltd (ASX: ALQ) share price is up almost 5% to $6.92. This appears to have been driven by a broker note out of Credit Suisse this morning. According to the note, the broker has upgraded the testing services company’s shares to an outperform rating with an $8.00 price target. It made the move ahead of its results release next week.

The Clover Corporation Limited (ASX: CLV) share price has jumped 12% to $2.51. Investors have been buying the infant formula ingredients company’s shares following the release of a positive trading update. Clover revealed that it has recently experienced a surge in demand and expects this to continue in the fourth quarter. Strong sales of infant formula products during the pandemic is driving the demand for ingredients.

The Computershare Limited (ASX: CPU) share price is up 4% to $12.66. This follows the release of an update by the share registry company after the market close on Tuesday. Computershare revealed that the majority of its businesses are operating resiliently during the pandemic. As such, it has reaffirmed its management earnings per share guidance of a 20% decline in FY 2020.

The EML Payments Ltd (ASX: EML) share price has rocketed 15% higher to $3.78. This morning the payments company released an update for the third quarter and April. Although it has been facing large headwinds, revenue and EBITDA were up 20% and 24% financial year to date at the end of March. The company also revealed that it made an operating profit during the month of April.

More reading

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• Why this ASX infant formula share is surging 14% higher today
• Why the EML Payments share price is rocketing over 12% higher today
• 5 things to watch on the ASX 200 on Wednesday
• 3 Warren Buffett ASX dividend shares to buy right now

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited and Emerchants Limited. The Motley Fool Australia has recommended Emerchants Limited. 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 Scott Phillips.

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The Alliance Aviation Services Ltd (ASX: AQZ) share price soared as much as 30.23% higher this morning on the back of a trading update. The company provided further insight into how the business is tracking in the wake of COVID-19 and re-established its FY20 earnings guidance.

About Alliance Aviation Services

Alliance provides contract, charter and allied aviation services across Australia to mining, energy, tourism and government sectors.

Its customer base includes S&P/ASX 200 Index (ASX: XJO) names like South32 Ltd (ASX: S32) and BHP Group Ltd (ASX: BHP).

The company owns a fleet of around 40 aircraft and completed 19,710 flying hours in the first half of FY20. 

What did Alliance announce?

This morning, Alliance revealed it has experienced a significant increase in demand for charter flights and expects to deliver its strongest charter revenue result in many years. The company attributed this uptick in demand to a combination of social distancing and a lack of available scheduled flights by other operators.

As a result, Alliance has welcomed a significant number of new resources sector clients and expects this level of charter revenue to continue through FY21.

Although travel restrictions have impacted inbound tourism contract revenue, Alliance has been able to capitalise on additional demand for flights in the resources sector. Implementing measures such as health screening of passengers, temperature checks, and specific seating plans, the company has actually increased its flight schedules of contracted clients.

In terms of its wet leasing division, Alliance has an agreement in place with Virgin Australia Holdings Ltd (ASX: VAH) to provide aircraft and crew and operate services on Virgin’s behalf. As Virgin is still in voluntary administration, this agreement remains suspended. Alliance noted it is not expecting any wet leasing activity for the remainder of FY20 and anticipates limited demand for these services in FY21.

FY20 outlook

By way of a trading update on 20 March 2020, Alliance outlined the impact of COVID-19 on its operations at the time and accordingly, suspended FY20 earnings guidance.

According to the company, now that the impact of COVID-19 has somewhat stabilised, it is in a position to provide earnings guidance for FY20. Alliance now expects to report full-year profit before tax in excess of $40 million. At the very least, a result of $40 million would represent 22% growth on the $32.8 million achieved in FY19.

More reading

• Why investing in these COVID-19 stricken ASX shares won’t be the same again for a very long time
• ASX 200 climbs 1% in positive start to the week
• Virgin narrows its shortlist down to 4 suitors
• 5 ASX 200 winners and 5 losers of the week
• Why Beach, CBA, Qantas, & Xero shares are dropping lower

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. 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 Scott Phillips.

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The InvoCare Limited (ASX:IVC) share price has continued its recent upward trend this morning and is trading for $11.17, driven higher by the widespread gains of the S&P/ASX200 Index (ASX:XJO) more broadly.

At the time of writing, the funeral home operator is trading at a 25% discount compared to its pre-COVID-19 highs of $14.92 earlier this year.

Although some investors may view the funerals industry as a controversial addition to their portfolio, here are 3 reasons I believe the current InvoCare share price has significant potential to outperform in the medium to long-term:

Successful capital raising

On 14 April, InvoCare announced it would tap institutional investors for $150 million total equity in the company at a price of $10.40 per share. The company cited that the raising would “provide enhanced support for its growth initiatives and further strengthen its balance sheet.”

The next day, however, the company revealed that over-subscription of the placement by investors had prompted its expansion to $200 million. This 25% enlargement suggests that there was significant demand for InvoCare shares and may be considered a positive indication that investors see sizeable growth opportunities for the company moving forward.

Track record of strong financial performance

The widespread impacts of COVID-19 will inevitably disrupt the short-term business operations of companies such as InvoCare. Despite this, the company’s track-record of stellar financial performance should provide investors with optimism that it will survive the challenging contemporary economic environment.

In its FY19 annual report to shareholders, InvoCare saw sales revenue rise by 3.5% to approximately $490 million, operating earnings before interest, taxes, depreciation and amortisation (EBITDA) grew by 21.4%, and net profits substantially increased by a whopping 54% relative to FY18. These figures were accompanied by a fully franked dividend of 41 cents per share, thus representing an annual dividend yield of 2.9%.

Lastly, InvoCare’s FY19 report discussed the acquisition of several regional funeral facilities as part of its overall growth strategy, including the purchase of Heritage Funerals (QLD) and Batemans Bay & Moruya District Funerals (NSW). These businesses will likely add to the 30% of existing market share that InvoCare currently holds in the funeral home industry.

This robust financial performance in FY19, combined with InvoCare’s fruitful acquisitions strategy, provide considerable opportunities for investors to benefit from the long-term earnings growth and profitability of the company.

Ageing population

According to the Australian Institute of Health and Welfare, 15% of the Australian population was included in the 65 and over category as of 2017, with this proportion of older demographics expected to inflate to 8.7 million people (22%) by 2056. If this projection is accurate, InvoCare appears well-placed to benefit from an ageing population. In the FY19 annual report, InvoCare CEO Martin Earp summarised this current demographic trend by stating:

The populations in our core geographical markets of Australia, New Zealand and Singapore are growing and ageing, with the first wave of the so-called baby boomer generation now impacting on anticipated death volumes. This positive demand profile is forecast to continue for at least two more decades.

To effectively meet this additional demand for funeral services, the company has embarked on a $200 million refurbishment program known as ‘Protect & Grow’. As of April 2020, 106 locations had undergone various improvements, and a further 74 sites are expected to benefit from renovations in FY20. Of particular interest, the Protect & Grow venture has seen mixed responses from shareholders, perhaps owing to their concerns that the up-front debt is weighing down the company balance sheet. This has arguably kept the share price lower in recent months.

However, I believe that this investment in the company’s infrastructure should be viewed positively by investors. InvoCare has recognised the long-term demand opportunities an ageing population provides, and is adapting accordingly to distribute the ensuing profitability of this demographic shift to its shareholders.

Foolish takeaway  

Fresh off its over-subscribed capital raise, I believe InvoCare is well-placed to emerge from the COVID-19 pandemic in a position of strength. The company has a significant portion of market share in a growing industry and has demonstrated a desire to further expand in the coming years through acquisitions and internal investment via the Protect & Grow strategy.

Although this company may be a buy-and-hold for the medium to long-term, I believe there is significant upside for prospective investors to include InvoCare shares in their portfolio.

More reading

• ASX 200 down 0.2%: Big four banks lower and TPG announces demerger plans
• Positive signs for Australia’s jobs market as ABS data points to a recovery
• Is the Newcrest Mining share price in the buy zone?
• Are ASX bank shares worth buying despite dividend cuts?
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Toby Thomas owns shares of InvoCare Limited. The Motley Fool Australia has recommended InvoCare Limited. 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 Scott Phillips.

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