5 ASX small-caps presenting post-earnings opportunities

Reporting season can mean different things to different investors. We view February and August as a period of either validation or disproof of the work put in before reporting season. The month-long reporting seasons also present fascinating price action. Companies that report well may be rewarded (excessively in some cases) while for others, the magnitude of the sell-off may present some opportunities to add to an existing position instead. 

One such case was retailer Accent Group (ASX: AX1). The company, already a prior holding in the Tyndall Australian Small Companies Fund, delivered a solid result that marginally beat market expectations. But despite this, the share price fell 16% on the day. We used this sell-off as our opportunity to increase our position.

Looking beyond August, we also expect that the next six to 12 months will be a boon period for small-cap stocks. Moderating inflation and the start of the interest rate easing cycle overseas will be the macro kick-starter for this process. However, we also expect earnings to improve over FY25 despite the challenges from FY24. Finally, and most importantly, if the rotation from large caps into small caps continues, that will provide the most natural tailwind. 

In this video, my colleague Tim Johnston and I discuss the small-cap results that stood out from the August reporting season. We also discuss four more stocks in-depth—two of which are new additions to the fund due to their earnings reports, and two of which we continue to believe are unloved. 

Managed Fund

Tyndall Australian Small Companies Fund

Australian Shares

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