September was another difficult month for global equity markets, however we are shifting our focus to those stocks that have outperformed during the same period. The S&P/ASX 200 declined 3.6% in September, bringing the total decline to 7.2% year to date (as of 30 September 2015).
Looking at sector performance over the month of September, all sectors declined with the exception of Information Technology and Industrials, gaining 5.36 and 1.44 per cent respectively. IT rebounded after falling significantly during the month of August however Industrials performed well during August relative to the other sectors.
Energy was the worst performer in September by a long way. Losing over 12.5 per cent in September alone as oil and gas prices dragged the sector down. August was equally difficult for Energy stocks bringing the total loss over the last two months to 26.10 per cent.
However, the key to successful investing is to find great companies and pay the right price for it, regardless of what the market or individual sectors do. Here are 5 stocks that have outperformed in the month of September as their business models appeared strong enough to spur buying in an otherwise bearish market.
1. Ardent Leisure Group Ltd (AAD) – up 9.8%
Ardent Leisure Group (ASX:AAD) is an operator of leisure and entertainment assets across Australia, New Zealand and the United States. AAD operates Dreamworld, WhiteWater World, SkyPoint Climb, d’Albora Marinas, AMF and Kingpin bowling centres and Goodlife fitness centres across Australia and New Zealand.
Following the retirement of Ardent’s CEO earlier this year, the company’s share price dropped 19.5 per cent. The stock has since broken out of its downtrend and gained 9.80 per cent during September alone. A break from its downtrend coupled with strong fundamentals provided a great opportunity for investors. Its US Main Event operations continue to experience strong growth buoyed by currency tailwind.
2. Greencross Ltd (GXL) – up 10.9%
Greencross Limited (ASX:GXL) is an Australian veterinary services provider which owns 132 vet clinics and 200 retail stores. The total store network has increased 35% during FY15 to 332. The company owns stores in Australia and New Zealand.
Whilst the company’s share price declined significantly in August due to the appointment of a new CEO, the stock has regained most of the lost ground gaining 10.9 per cent in September alone. The recent price drop has provided investors with a great opportunity in a company with strong fundamentals. FY15 acquisitions are largely complete and are expected to contribute to revenue growth during FY16. Management is determined to further expand GXL’s store network going forward.
3. Gold Road Resource Ltd (GOR) – up 27.5%
Gold Road Resources Ltd (ASX:GOR) is an Australian minerals company focused on gold exploration in Western Australia. Its primary asset is the Gruyere Project near Laverton, where Measured, Indicated and Inferred Resources have been delineated totalling 137Million tonnes (Mt) grading 1.24g/t for 5.5million oz. A Scoping Study into a 5Mt pa open pit and underground mining operation was completed during 2015. Gruyere is part of a regional exploration license holding covering 5000km2. A Joint Venture was established with Sumitomo Metal Mining over approximately 2,900km2 of the licenses where Resources have yet to be delineated.
Year to date, GOR’s share price has gained 73.5 per cent and more recently gained 27.5 per cent in September alone. The growth in its share price was largely due to promising drilling results and a favourable gold price environment in AUD terms. The company provides attractive exposure to the gold mining industry with its land package in the Yarmana region, existing resource inventory at Gruyere, and track record of low discovery costs.
4. Technology One Ltd (TNE) – up 9.1%
Technology One Ltd (ASX:TNE) is an integrated developer and distributor of enterprise software for Government, financial services, education, health, and the utilities sectors. It was established in 1987 and has been continually profitable since 1992.
TNE’s share price has been following a clearly defined uptrend for over 6 years and more recently gained 9.1 per cent in September. Investor’s remain confident about the company as it continues to grow profits and deliver consistent dividend growth whilst maintaining a healthy balance sheet.
5. Berkeley Energy Ltd (BKY) – up 18.9%
Berkeley Energy Limited (ASX:BKY) is an Australian minerals company with uranium assets in Spain. The Company’s most advanced asset is the Salamanca Project, where indicated resources of 34.4million tonnes (mt) and inferred resources of 31mt have been delineated. On 31 August 2015 the company announced the change of its name to Berkeley Energy Limited. The name change reflects the proposed transition of the Company from an explorer to a producer. As expected satisfaction of final mining and processing regulations have driven interest in the Company.
Year to date BKY’s share price has gained 57.1 per cent and more recently gained 18.9 per cent in September alone. Exposure to the Uranium markets and the transition from explorer to producer has continued to attract investors.
Author: Simon Herrmann
Oct 08, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.