Tag: Motley Fool

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Zoom Video Communications (NASDAQ: ZM) is taking advantage of the boom in working from home due to the coronavirus pandemic by announcing its videoconferencing software will soon be available on popular smart displays from Amazon.com, Inc. (NASDAQ: AMZN), Facebook, Inc. (NASDAQ: FB), and Google (NASDAQ: GOOGL).

Zoom on Portal from Facebook should be available next month, while capabilities for Amazon’s Echo Show and Google’s Nest Hub Max will be available by the end of the year.

Zoom launched its Home product last month, and it ties together with its hardware-as-a-service (HaaS) program to let businesses outfit their employees with affordable conferencing and collaboration equipment.

It recently announced its Zoom Phone cloud phone service was now available in 40 countries around the globe.

The video communications specialist cites a Morning Consult study that shows working from home has tripled compared to before the COVID-19 pandemic, and a third of workers would upgrade their home office setup if their employers subsidized the cost.

Nearly half (47%) of employers intend to allow employees to keep working full-time from home going forward, and adding Zoom Video capabilities to products people might already have in their homes would certainly expand its utility.

At the same time, Facebook is also looking to tap into the work-from-home trend, separately announcing that beyond its own Workplace collaboration tool and the addition of Zoom functionality, it has also partnered with BlueJeans, GoToMeeting, and Webex for even more videoconferencing options on Portal.

Facebook says Workplace on Portal also includes Portal TV and it is now adding backgrounds for video calls.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Rich Duprey has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Amazon, Facebook, and Zoom Video Communications and recommends the following options: short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, and short August 2020 $130 calls on Zoom Video Communications. The Motley Fool Australia has recommended Alphabet (A shares), Amazon, and Facebook. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Qantas Airways Limited (ASX: QAN) chief executive Alan Joyce has called for national action to steer the country away from a disastrous “cliff”.

While announcing a $2.7 billion loss-before-tax for the 2020 financial year, Joyce expressed his frustration at a lack of national coordination for state border closures due to Covid-19.

“At the moment, there are no rules around how borders are going to close and going to open,” he said.

“Some areas of Queensland, Tasmania, and other parts of the country, 30% of the jobs are dependent on tourism.”

Joyce added he’s not asking for a complete opening of all state borders, but merely clear national rules based on health advice on when they’re closed and when they’re open.

“If it’s safe to do it, it should be opened… We’re saying ‘Let’s have the rules to say what would you have to see in order for those borders to be open?’ So, we all have clarity and know what’s the right thing to do.”

Travel restrictions are political, not based on health

The Qantas chief was especially frustrated at the travel restrictions between virus-suppressed areas.

“We still don’t understand why states with zero cases for a long time have borders closed to states with zero cases. That doesn’t seem to make any medical sense or any advice that we  have seen.”

The Queensland premier Annastacia Palaszczuk this week stated her state’s borders would remain shut to Victorians and New South Wales visitors until at least Christmas.

Joyce slammed such a declaration made this far out from December, considering the fast-changing nature of the epidemic.

“What’s the basis of it? … Even if Victoria gets down to no cases, or New South Wales gets back to no cases, is that still the situation?”

“Surely, these decisions should be based on the facts, the health advice, and the level of cases that we’re seeing around the various states. That’s what we’re calling on… And we think that eventually will cost jobs and businesses, particularly a lot of the small businesses in Queensland, to go out of business.”

Flights to the US won’t happen before a vaccine

Qantas would concentrate on reviving the domestic business before shifting its focus to re-opening international routes.

“Potentially have the bubbles, country by country, when we have a similar level of exposure to the virus – New Zealanders, they are an example – that should potentially open up relatively fast compared to the other countries around the world.”

Traditionally a big money-spinner for the airline is travel between Australia and the US.

But the dire Covid-19 infection rate in the North American nation has Joyce pessimistic about a revival anytime soon.

“The US, with the level of prevalence there is probably going to take some time. It will probably need a vaccine before we could see that happening,” he said.

“We potentially could see a vaccine by the middle or the end of next year and countries like the US may be the first country to have widespread use of that vaccine. So that could mean that the US is seen as a market by the end of 21, hopefully we could, dependent on a vaccine, start seeing flights again.”

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Motley Fool contributor Tony Yoo 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 Star Entertainment Group Ltd (ASX: SGR) share price is on the move this morning, up more than 6% after the casino operator revealed its full year results. Although the company performed strongly between July 2019 and February 2020, the COVID-19 shutdown punched a hole in revenues and profits. 

What does Star Entertainment Group do? 

Star Entertainment Group is behind The Star casinos in the Gold Coast and Sydney, the Treasury Casino and Hotel in Brisbane, and manages the Gold Coast Convention and Exhibition Centre on behalf of the Queensland Government. The company has also entered a $3 billion joint venture to redevelop Queen’s Wharf in Brisbane, which is expected to open in 2022. 

How did Star Entertainment Group perform in FY20? 

Star Entertainment Group reported a 46% decline in profits as a result of the shutdowns of its properties. Both Sydney and Queensland ventures showed strong earnings growth pre-COVID-19, however venues were shuttered in March in response to the spread of the pandemic. This led Star to defer its first half dividend and implement strategies to conserve liquidity, standing down 90% of its employees. 

While properties have largely reopened, they are subject to limits on patron numbers and distancing requirements. The shutdowns resulted in a 23.3% fall in net revenue over the full year and 22.8% decline in earnings before interest, taxes, depreciation and amortisation (EBITDA), which fell to 430 million. Net profit after tax dropped 46% to $176 million and no final dividend was declared.

Chair John O’Neill AO said:

Whilst acknowledging the impacts of COVID-19 have been extraordinarily challenging, the fundamental earnings prospects for The Star remain unchanged, underpinned by valuable long-term licences in sought after destinations. The Star delivered record normalised and domestic earnings for July 2019 to February 2020 on a pcp basis before the full impact of COVID-19. This reflected growth from investments, operational improvements and cost management benefits.

What is the outlook for Star Entertainment Group?

Star Entertainment Group’s properties are now operating under capacity restrictions, and travel restrictions mean many VIP gamblers cannot visit. In July, domestic gaming revenues were around 80% of the prior corresponding period, but VIP volumes were only at 5%. Nonetheless, cash flow was materially positive after investments, enabling the company to reduce debt. A debt covenant was waived in June, and no cash dividend can be paid until Star Entertainment Group reduces its gearing ratio below 2.5 times.

At the time of writing, the Star Entertainment share price is up by 6.36% to $3.01 per share.

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Motley Fool contributor Kate O’Brien 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 Pro Medicus Limited (ASX: PME) share price has come under pressure following its full year results release.

In morning trade the Pro Medicus share price is down almost 5% to $24.10.

How did Pro Medicus perform in FY 2020?

For the 12 months ended 30 June 2020, the leading health imaging company reported a 23.9% increase in revenue from underlying operations to $56.8 million.

Management advised that this was driven by solid growth in key jurisdictions, with North American revenue up 23.7% and Australian revenue rising 19.2%. This offset a 37.7% decline in revenue in Europe, which was largely a result of the one-off sale to the German government in the previous period.

Thanks to a lift in its margins to 52.5%, underlying profit before tax (which excludes a $3 million one-off capital sale to the German government in the previous period) was up 33.4% to $30.24 million.

On the bottom line, Pro Medicus posted a full year reported net profit of $23.1 million. This was up 20.7% on the prior corresponding period.

In light of this strong form and its very strong balance sheet (cash reserves of $43.4 million and no debt), the board declared a fully franked final dividend of 6 cents per share. This lifted its total FY 2020 dividend to 12 cents per share, up 14.3% year on year.

Management commentary.

Pro Medicus’ CEO, Dr. Sam Hupert, was pleased with the company’s performance in FY 2020.

He said: “It reinforces the momentum achieved in recent years. Key drivers of the profit increase were growth in transaction revenue in North America and increased RIS sales in Australia. The three key contract wins in the USA extends our growing footprint in the academic hospital segment as well as regionally-based community hospitals.”

The chief executive also provided investors with an update on how COVID-19 was impacting the business. Pleasingly, while there has been some impact, it has not been substantial.

Dr. Hupert said: “We have kept momentum going operationally, and our client volumes have increased steadily after an initial steep drop in exam numbers at the end of March/beginning of April. By 30th June, average examination volumes were back above 90% of normal business levels across the USA and Australia. Compared to many other businesses, we have held up very well.”

No guidance was given for FY 2021, but the chief executive notes that its pipeline remains strong and has continued to grow even during the pandemic.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. 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 Domain Holdings Australia Ltd (ASX: DHG) share price is up 2.2% in early morning trade following the release of its full year FY 2020 results.

A challenging year for Domain

Domain recorded total underlying revenues of $261.6 million in FY 2020. This was a sharp 9.1% fall on a like-for-like base, taking into account various adjustments. The real estate media and technology services provider found the second half of the financial year particularly challenging due to the coronavirus pandemic.

Full year earnings before interest, taxes, depreciation and amortisation (EBITDA) declined by 17.4% to $84.4 million, while EBIT declined more significantly by 32.7% to $43.3 million.

Domain did, however, manage to reduce its like-for-like annual expenses by 5%. This achievement was partly due to a strategy to reduce overall costs that has been in place for several years now.

By the end of June 2020, Domain also managed to achieve a net debt of $105.8 million. This was a significant reduction from Domain’s net debt of $147.9 million last year.

Decline in core digital revenues

Core digital revenues declined by 6.4% during FY 2020 for Domain, while core digital EBITDA fell 6.6%.

Within this division, residential revenues declined by 6.7% during FY 2020 and 4% on a like-for-like basis. Meanwhile, residential subscription revenue dropped 15% compared to FY 2019.

However, the residential division achieved solid annual growth across a range of metrics. This includes a 14% increase in unique digital audience, as well as a strong 43% increase in app launches during the first six months of 2020.

Domain CEO Jason Pellegrino said: “In our residential business, the number of paid depth contracts increased in all states, underpinning record depth penetration. The introduction of our flexible pricing model and continued implementation of targeted market-by-market strategies, supported a 6% increase in controllable yield, with further gains from favourable market mix.”

The media, developers and commercial division saw a sharp 8.6% decline in revenues during FY 2020.

Mr Pellegrino said: “Media continued to see the impact of its new operating model during the first quarter. Broad weakness in the advertising market was exacerbated by COVID-19 in H2, with reduced spending in key advertising categories. Despite lower revenue, the new operating model is delivering an improved margin.”

However, it was the print division that took the biggest hit for Domain. Print revenues declined by 41% and print EBITDA was down a massive 56%.

Market outlook for the Domain share price

On a positive note, Domain noted that during the month of July it had witnessed strong year-on-year growth in both Sydney and Melbourne. However, the outlook for the full year FY 2021 remains uncertain. Melbourne’s stage 4 lockdown in particular is likely to have a negative impact on full year results.

Domain did not declare a dividend in light of market uncertainty in FY 2021.

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Motley Fool contributor Phil Harpur 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 IDP Education Ltd (ASX: IEL) share price is rocketing significantly higher this morning after the release of its FY 2020 results.

In early trade the student placement and language testing company’s shares were up a massive 45% to $21.60.

How did IDP Education perform in FY 2020?

IDP Education had a tough 12 months in FY 2020 because of the impact of the pandemic on the international education market.

Nevertheless, the company still managed to deliver a solid full year result this morning.

In FY 2020, IDP Education reported a 2% decline in revenue to $587.1 million and a 29% increase in EBITDA to $148.6 million. The latter was driven by a sizeable reduction in both direct and overhead costs. Direct costs fell 8% to $241.9 million and overhead costs were reduced by 10% to $196.2 million.

However, due to a significant jump in depreciation, its net profit after tax and amortisation was up just 3% to $70.4 million

While no final dividend was declared, the company will now pay its deferred interim dividend on 24 September.

Andrew Barkla, IDP’s Chief Executive Officer and Managing Director, commented: “Our results reflect strong momentum in the first of the half year, followed by a pivot towards disciplined capital management and product innovation in the second half.”

How did its segments perform?

The company’s Student Placement business was on form in FY 2020 and recorded a 12% increase in revenue to $190.6 million. While the Australian side of this business posted a 13% decline in revenue to $90.4 million, the Multi-destination side of the business made up for this with a 52% increase in revenue to $100.2 million.

Also delivering growth were its English Language Teaching and Digital Marketing and Events businesses. They both grew revenue by 4% year on year.

However, the company’s English Language Testing business offset this positive growth. Its largest segment reported a 9% decline in revenue to $325.5 million in FY 2020.

Outlook.

No guidance was given for FY 2021 given the uncertain operating environment. However, management advised that IELTS volumes are at the early stages of recovery as testing centres reopen.

It also notes that student intentions are strong, with research showing that only 7% of students no longer intend to commence study as planned.

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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 Idp Education Pty Ltd. 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 Beacon Lighting Group Ltd (ASX: BLX) share price is falling lower this morning following release of the company’s FY20 results. At the time of writing, the Beacon Lighting share price has fallen 1.5% to $1.32 after closing yesterday’s session at $1.34.

FY20 Results

The group had a strong financial year with revenue from ordinary activities increasing 2.6% to $252.2 million in FY20. Underlying sales increased 8% to $250.9 million. International sales increased 22.9% to $8.5 million.

Additionally, net profit after tax increased 38.5% to $22.2 million in FY20 from $16.04 million in FY19. Underlying net profit after tax increased 16.8% to $19.1 million. 

Earnings before interest, taxation, depreciation and amortisation (EBITDA) was up 111% to $62.53 million from $29.64 million in FY19. 

Beacon Lighting said stores experienced significant growth in sales as its customers were spending more time working, educating and completing projects at home. Additionally, company store comparative sales increased 7.2% based on a 52 week comparative basis. 

Online sales showed pleasing growth of 50.6% to $16.2 million with significant qrowth in Q4.

Earnings per share was 10.11 cents in FY20 up from 7.37 earnings per share in the prior corresponding period. This exceeded analyst expectations of 8.8 cents per share.

Gross margin was impacted by exchange rate volatility. As a result, gross margin in FY20 was down 63.9% in FY20 compared to 64.0% in FY19.

The company had a strong net operating cash flow generated by strong sales, margins and decline in inventory. This was supported by the sale of the distribution centre in Parkinson Queensland, debt reduction, two acquisitions and the Masson manufacturing factory in Epping, Victoria. 

The group declared a dividend of 2.4 cents per share. The annual dividend for FY20 is 5 cents per share up from 4.55 cents in FY19.

What’s next for the Beacon Lighting share price?

Beacon Lighting will continue to target growth in Australia and around the world by keeping up to date with the latest lighting technologies, opening new stores and introducing new product ranges. It remains encouraged by the continued support from all stakeholders. However, the group remains cautious regarding the high level of uncertainty globally because of the coronavirus pandemic.

Stage 4 restrictions are applying to its 28 Melbourne metropolitan stores and stage 3 restrictions are applying to 4 regional stores. Despite the restrictions, customers are still able to shop online with home delivery or click and collect. Regional stores remain open during this time but are subject to safety measures.

Beacon Lighting didn’t apply for the JobKeeper program. Having said that, the group advises significant uncertainties remain as to whether current sales trends will continue. Strong Q4 sales have continued into the start of FY21. 

The Beacon Lighting share price has increased 207% since its March lows and is 10.9% higher in year-to-date trading.

More reading

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• IDP Education share price rockets 45% higher on surprisingly strong FY 2020 result

Motley Fool contributor Matthew Donald 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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FAANG has become an acronym that almost every investor in the world is familiar with now.

It stands for (of course): Facebook, Apple, Amazon.com, Netflix and Google (now called Alphabet Inc). This group of companies have become the face of ‘big tech’ over in the United States — and their mindblowing success stories have had investors clambering over them for more than a decade now.

Unfortunately for ASX investors, all of the FAANG stocks are listed on US exchanges, which makes it relatively difficult for Aussies to own shares of them, at least compared with our own ASX shares.

Fortunately, it has never been easier for Aussies to get a slice of the FAANG pie than it is today.

So here are 3 easy ways ASX investors can access the FAANG stocks today.

1) A FAANG-dominated index fund

The BetaShares Nasdaq 100 ETF (ASX: NDQ) is the first easy way to get a hold of the FAANG stocks within your own portfolio. This exchange-traded fund (ETF) actually holds the largest 100 companies on the US Nasdaq exchange. Fortunately, the FAANG stocks make up a huge chunk of this index due to their sheer size. At the time of writing, Apple comprises the largest holding in NDQ at a 13.6% weighting. Next up is Amazon with 11.2%. Down the line, Alphabet has a 7.1% weighting, Facebook a 4.3% and Netflix at 1.9%. NDQ has a management fee of 0.48% per annum.

2) A FAANG-focused ETF

A second option for ASX investors looking for FAANG exposure is the ETFS FANG+ ETF (ASX: FANG). This is a relatively new ETF, only incepted back in February 2020. Even so, I think it’s a great alternative to NDQ if you’re looking for more concentration. This ETF holds the 5 FAANG stocks, as well as another 5 tech companies that are fellow tech heavyweights (hence the +). It’s currently weightings are as follows:

• 15.2% to Tesla Inc.
• 10.7% to NVIDIA Corporation
• 10.7% to Apple
• 10% to Amazon
• 9.5% to Alibaba Group
• 9.2% to Twitter Inc.
• 8.9% to Facebook
• 8.8% to Alphabet
• 8.8% to Netflix
• 8.2% to Baidu Inc.

FANG charges a management fee of 0.35%.

3) Buy the shares yourself

It used to be extremely difficult for ASX investors to buy US-listed shares directly, but this is no longer the case. All of the major brokerage platforms run by the ASX banks (such as Commonwealth Bank of Australia‘s (ASX: CBA) CommSec) now offer international trading, usually with an additional fee.

Further, there is a bevvy of other brokers that offer international options too, such as Stake and Charles Schwab. If you’re dead keen on owning the FAANGs, then you might just want to go straight to the source.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Facebook, Baidu and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Amazon, Apple, Facebook, Netflix, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Amazon, Apple, BETANASDAQ ETF UNITS, Facebook, and Netflix. 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 ASX Ltd (ASX: ASX) share price is on watch after reporting a 4.4% surge in net profit after tax.

Why is the ASX Ltd share price worth watching?

Underlying NPAT totalled $513.8 million with statutory NPAT climbing 1.4% to $498.6 million.

That saw the Aussie share market operator report a 4.4% increase in underlying earnings per share (EPS). Impressively, that is the 8th consecutive year of growth as EPS climbed to 265.4 cents.

The ASX Ltd share price could be on the move after also reporting a 4.5% dividend increase. The company’s dividends per share totalled 238.9 cents for the year including a 122.5 cent second-half distribution.

Operating revenue was up 8.6% to $938.4 million thanks to heightened trading activity in 2020. That follows a huge spike in average trading volume during the coronavirus pandemic and March 2020 bear market.

The largest business unit, Derivatives and OTC Markets, reported a 4.5% increase in operating revenue to $317.6 million.

Listings and Issuer Services had a strong year despite second-half challenges, with operating revenue up 7.3% to $237.1 million.

There was also strong growth across Equity Post-Trade Services (17.0%) and Trading Services (11.5%) to $127.4 million and $256.3 million, respectively.

ASX reported 7 million trades registered in CHESS with 24.5 million futures contracts traded in March 2020. $169 billion of bonds settled in Austraclear in the month, up 29% versus any previous pre-COVID daily settlement record from March 2019.

Total expenses climbed 9.0% to $286.2 million due to unexpected COVID-19 related costs while earnings before interest and tax (EBIT) was up 8.5%.

The Reserve Bank of Australia’s three interest rate cuts weighed on ASX’s interest income figures. That was evident in the Group net interest income decline of 67.5% to $7.6 million with a 15.1% in total interest income to $83.8 million.

Which segments are supporting the ASX Ltd share price?

The ASX Ltd share price will be one to watch this morning after reporting strong performance across its business units.

Total capital raised climbed 12.8% to $97 million with an increase in secondary capital offsetting a decline in IPOs. That was largely driven by a spate of equity raisings in Q4 2020 as companies looked to secure their balance sheets.

Cash market trading in 2H FY20 rocketed 52.4% compared to the previous year and was up 30.5% for the full-year.

ASX noted market trends had been accelerated by the pandemic. That includes increased reliance on technology and process digitisation. Data and security were also among the factors cited by the exchange operator.

Outlook

There was little in the way of guidance provided by management amid the current uncertainty. Market volatility and low interest rates look set to create more headaches in FY21.

However, the ASX Ltd share price could be in demand after reporting an increased dividend and its 10th consecutive year of consecutive EBIT growth.

More reading

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Motley Fool contributor Ken Hall 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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There’s good news for those who feel they’ve missed out on the share price surge of ASX stocks that delivered better-than-expected results. It may not be too late to buy them after the fact.

History shows us that these reporting season champs have on average continued to climb in the months after they post their results.

There are plenty of ASX winners to pick from too. The list of ASX stocks that have surged ahead or broken new records on the back of good results is pretty long, and we are only little more than half way through the busiest part of reporting season.

Profit season record breakers

A few recent examples include the CSL Limited (ASX: CSL) share price, Monadelphous Group Limited (ASX: MND) share price, Cochlear Limited (ASX: COH) share price and Wesfarmers Ltd (ASX: WES) share price.

Good on those who’ve been able to pick these stocks before their earnings numbers were made public. But trying to pick the winners before the results is fraught with risks. Not even the experts can do this consistently.

Buying the best reporting season winners

It could be a much safer strategy to buy the outperformers the day after they release their profit news.

Data over the last nine reporting season complied by Bell Potter’s high-profile trader Richard Coppleson showed that the top 20 stocks of the reporting season continued to outperform months later.

These top 20 movers jumped on average 14.7% the day they released their results, and they continued to climb another 1.4% over the next four months.

Tiny drops make an ocean

This may not sound like much, but what’s also clear is that this group managed to keep ahead of the S&P/ASX 200 Index (Index:^AXJO) over that four months in every instance.

Even if you missed the first day share price surge, as many of us do, the group still kept ahead of the ASX 200 by 0.1%.

Before you thumb your nose at the small margin, remember that most portfolios outperform over the longer-term not by picking the big winners, but by avoiding the big losers.

Reading the fine print

But as with anything, there are caveats you need to be aware of. Firstly, just because it’s happened in the past, doesn’t mean it will in the future. Current macro conditions are very different to the last nine reporting seasons, although fortunately, record low rates are supportive of equities.

The other thing to remember is that Bell Potter’s numbers are averages. This means you need to buy enough of the top 20 profit season winners to get similar results and you need pretty deep pockets to do this.

Picking only a few of the top 20 will likely give you a big skew to the upside or downside, you can never really know.

I am also not advocating that you use this as your primary investment strategy. What I find most interesting about the data is how it can help limit the risk of investing in a loser.

More reading

• Mirvac share price on watch as profit slumps 45%
• Why the Carsales share price is still a buy at an all time high
• Wesfarmers share price on watch after cautious outlook overshadows strong FY 2020 result
• Where to next for the McMillan share price following Wednesday’s results?
• 5 things to watch on the ASX 200 on Thursday

Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and CSL Ltd. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Cochlear Ltd. 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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