If you weren’t aware already, earnings season is upon us. If there’s any company you think is on the rise, now is a great time to bet your dollars.
Here’s how I’d invest $10,000 this August.
Aristocrat Leisure Limited (ASX: ALL) – $4,000
Aristocrat Leisure is an Australian a lot machine developer. Since January, the share price has risen more than 37% to a $29.06 close yesterday. As the ethicality of gambling continues to be questioned in the face of tightening regulations, Aristocrat has invested heavily into its digital segment.
This ‘digital’ business taps into the lucrative $32 billion mobile gaming industry. Aristocrat has acquired Israeli’s Plarium and Seattle’s Big Fish Games, both of which contributed significantly to the 37% growth in the company’s digital segment.
The company’s share price is up 47% in the year to date. This is due to its stellar HY results which far surpassed investor expectations. Net profit after tax was up 34.9% with total revenues expanding 35% to US$2.1 billion.
Aristocrat will be announcing its FY19 results on 30 September. This could be the perfect opportunity to buy into the company’s growth.
Elixinol Global Ltd (ASX: EXL) – $3,000
Elixinol Global is an Australian CBD producer. The company’s share price has tumbled in 2019, its current price of $2.68 is less than half its peak of $5.69 in April. As a currently unprofitable company, Elixinol’s share price is highly sensitive to speculation as a result of weakness in global markets.
Nevertheless, the company has been making significant milestones in the US with its Colorado-based CBD business driving the largest portion of revenue. Recently, Elixinol struck an $18 million deal with Pet Releaf to sell hemp-based pet products. Similarly, the company’s legacy business, Hemp Foods Australia, also launched a burger product at Woolworths Group Ltd (ASX: WOW). The company continues to strike deals with distribution partners, which has been critical to its early success.
This has been pivotal to its strong HY results. Group revenue grew 18% on the previous quarter and 19% over the prior corresponding period, bring total revenue to $9.9 million.
Given the company’s foothold in CBD health and food products in the US thus far, investors will have their eyes peeled for any news on the success of these early partnerships.
A2 Milk Company Ltd (ASX: A2M) – $3,000
a2 Milk broke way past the $15 mark this year, hitting highs of $17.13 just two weeks ago. Though it’s now sitting at $15.31, shares in a2 Milk have returned a sweet 46% to its investors since the beginning of this year.
A couple months ago, concerns were raised amongst investors as China indicated its commitment to raise domestically produced infant formula to 60%. With a2 Milk’s largest market being China, this could not be ignored.
This is why a2 Milk is doubling down on its partnerships. Recently, JD Worldwide announced it would support a2 Milk through its online and offline marketing channels, increasing high-quality exports of infant formula into the Chinese market.
a2 Milk is known to consistently beat analyst expectations, and there is no reason this won’t be the case in its upcoming FY19 earnings call on 12 August.
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Motley Fool contributor Audrey Thehamihardja has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. 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.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019