Be patient and wait for opportunities

AS the final week of corporate reporting season comes to an end, investors can breathe a sigh of relief.

Despite fearmongering and global uncertainty headlining the news, Australia’s stock market has only declined around 6 per cent over the past month.

With many investors asking whether the worst is over, let’s look at how some companies fared during the last round of reporting season:

Fortescue profits were up 195 per cent, due to an increase in production volume, rising iron ore prices and our weaker dollar. It also announced a $500 million share buyback and a final dividend of 24c a share, double the previous year’s. Place this stock on your watch list.

IOOF’s shares continued to fall this week after releasing its full-year profits. IOOF has been riddled with scandal in recent years, with a significant decline in its share price after the banking royal commission. It would be wise to give this stock a miss for a while.

Wesfarmers released positive full-year results with earnings a share up 13.5 per cent, plus revenue of $27.9 billion and a fully franked dividend (including a special dividend) of $2.78 a share. If you own Wesfarmers, sit back and enjoy the ride.

Afterpay announced a 130 per cent increase in customers over the past year and an 86 per cent rise in income of $264.1 million with underlying sales up 140 per cent to $5.2 billion. I would be conservative with this stock, due to increased competition in this space.

In its full-year results, Woolworths recorded sales at $59.98 billion and net profit, and earnings a share up around 7 per cent. This stock looks fantastic at present.

We have continued to experience market volatility this week. I expect the market to trade up until it makes its eventual low between midSeptember and early October.

It is a time to wait for good stocks to present opportunities over coming months. Dale Gillham is chief analyst at Wealth Within. wealthwithin.com.au