The S&P/ASX 200 (ASX: XJO) might be trading flat today but the Amaysim Ltd (ASX: AYS), Nearmap Ltd (ASX: NEA) and Webjet Ltd (ASX: WEB) share prices have crushed the Australian share market daily return.
If you haven’t already caught up with the best company results from this week, take a look at our Weekly ASX Reporting Season video below. Drew and I offer four growth stocks to Buy, Hold or Sell.
Amaysim shares – up 17%
Amaysim, the $200 million discount telecommunications company, didn’t release any market-sensitive information today but that didn’t stop the company’s stock rallying over 15% to be the ASX’s best performer. According to Rask Media’s Reporting Season Calendar, Amaysim is due to report its results on Monday, 31 August.
Side note: I’m always a little sceptical when a company’s shares rally (or fall) strongly before the company is due to release market-sensitive information. Then again, I’ve learned time and again not to to jump at shadows — oftentimes small-cap share prices rise/fall for no rhyme or reason.
In related industry news, TPG Telecom Ltd (ASX: TPG) released its first financial report since Vodafone Australia and TPG merged. In the update, shown below, TPG said the telco industry is weathering the effects of COVID better than other sectors. This might have been enough to spur a rally in fellow telco stocks like Amaysim.
Nearmap shares – up 9%
The Nearmap share price snapped back from a sell-off earlier this week following the release of its FY20 financial results. As reported by Rask Analyst Cathryn Goh, the aerial imagery business ratcheted up an 18% or $16 million increase in annualised contract value (ACV) to $108 million.
While that sounds great — I think it is promising — the company added $24 million of ACV a year earlier. Meaning, Nearmap’s growth rate slowed. What’s more, the number of customers who gave up Nearmap’s software, known as churn, rose from 5.3% of customers to 9.9%. The business also reported a net loss of $36.7 million which was worse than the $14.7 million loss reported a year earlier.
While the result wasn’t to the liking of some investors on the day, keep in mind Nearmap has a stellar reputation for growth and its shares have risen from below $1 per share a couple of years ago to over $2.66 now. Ultimately, while shares are better-priced today than they were a year ago (over $4), the company still commands a rich $1.2 billion market capitalisation. Strong growth is required to justify that.
Webjet shares – up 9%
Rounding out the top stocks on the ASX for Friday, Webjet shareholders got some reprieve from the repeated bad news cycle to see their shares rally 9%. Earlier this week Webjet shares released its FY20 report and, as covered by Rask Media’s Jaz Harrison, shares rallied 7%.
Webjet announced its total transaction value (TTV), which represents the dollar amount of travel bookings processed by its platforms each year, dropped 21% to $3 billion. That resulted in a 27% decline in revenue to $266 million and an operating profit (EBITDA) loss of $91.3 million – down from a $26 million profit last year.
The impact on travel companies has been well-documented by the financial media, with the likes of Qantas Airways Ltd (ASX: QAN) forced to make huge cuts to its workforce. Others, like Virgin Australia (ASX: VAH), have gone into administration. If you believe the travel sector is due to rebound to pre-COVID levels, Webjet shares could be one to scoop up. Right now, I’m not so brave.
Buy, Hold or Sell?
I reserve all of our team’s #1 share ideas for our Rask Invest research service.
Nonetheless, if I were looking at these three shares, Nearmap would be at the top of my watchlist, then Webjet. Webjet could seriously surprise investors if the good news flow can continue and COVID restrictions continue to ease.
However, none of these companies are in my portfolio right now. There are 2,100 stocks on the ASX and thousands more globally. Be choosey. If you’re looking for a daily stream of share ideas, use your web browser to bookmark our ASX growth shares page — or grab a copy of my investment report below.
