June is a preferred month for investors to adjust their portfolios and align with fundamentally strong stocks and sectors. Q4 FY24 developments reflecting a fair valuation of the ASX Stock Market to go for.
Release of major economic data has already equipped ASX market in 2024 with a clear perspective.
The three top ASX stocks to buy in June 2024 are
IMDEX Limited (ASX: IMD)
IMDEX Limited announced its financial results for the half-year ended on 31 December 2023, reflecting strong growth and operational performance.
Revenue surged to $235.3 million, marking an 18.4% increase (16% on a constant currency basis), while normalized EBITDA reached $71.0 million, up by 13.1% (14% on a constant currency basis), with a corresponding margin of 30.2%. Operating cash conversion stood at an impressive 84%. Although NPAT declined to $16.8 million, normalized NPATA rose to $32.8 million, indicating resilience and growth. Moreover, net debt decreased by $19.2 million to $45.7 million, owing to accelerated debt repayment. The company also declared an interim fully franked dividend of 1.5 cents per share, representing a 26% NPAT payout ratio on normalized earnings.
The ASX Listed Company has demonstrated a resilient financial performance over the past few years, marked by consistent half-yearly revenue growth year on year. Despite a temporary setback between H1’23 and H2’23, the net margin has shown steady improvement since H2’23, reflecting effective management strategies to enhance profitability.
IMD is well-positioned to capitalize on opportunities in the market, with major drillers and miners signaling expansion programs. Steady demand from current customers and potential contracts in the Philippines and PNG indicate ongoing growth prospects. Additionally, there are opportunities for increased mining investment in Argentina and Ecuador, supported by favorable government policies. IMD’s suite of products, including innovative solutions for orebody knowledge and directional drilling, aligns well with increasing demand for drilling efficiency. Overall, with mid and major resource companies remaining well-funded, IMD is poised for continued success and expansion in the years ahead.
AGL Energy Limited (ASX: AGL)
AGL’s 1H24 results were led by many factors, including improved fleet availability and flexibility, more stable market conditions. The higher wholesale electricity pricing from previous periods reflected in pricing outcomes and contract positions. Total AGL customer services increased to 4.3 million, a rise of 13,000 compared to FY23
AGL Energy Limited’s positive trends in financial performance for the fiscal year ending 30 June 2023 provide several benefits for the company. The increase in gross margins from $2,714 million to $2,965 million indicates enhanced profitability, while the 12% rise in underlying EBITDA to $1,361 million reflects improved operational performance. The significant growth of 25% in underlying Net Profit after Tax (NPAT) to $281 million further highlights AGL’s financial strength and resilience. The substantial reduction in total liabilities from $12,753 million to $10,119 million indicates improved financial stability. Additionally, the increase in Return on Equity (ROE) by 1.2 percentage points to 4.9% and the rise in Return on Capital Employed (ROCE) to 5.7% demonstrate more efficient management and effective use of capital. The adjusted Return on Capital Employed (ROCE) also increased by 1 percentage point to 3.3%, underscoring improved profitability relative to capital employed. These positive financial metrics enhance investor confidence, improve funding and creditworthiness, and position AGL for sustained growth and resilience against market fluctuations.
AGL has been performing well, consistently surpassing revenue and earnings estimates over the past few semiannual periods. Since the first half of 2023, there has been a trend of growing revenues and improved profit margins, indicating the effectiveness of the company’s strategies, such as cost management or revenue growth initiatives. Additionally, consistent dividend payments and a growing asset base, along with long-term liabilities consistently exceeding short-term liabilities annually, suggest a stable financial position.
The advancement of the development pipeline by over 60% from 3.2 GW to 5.3 GW demonstrates AGL’s commitment to future growth and its proactive stance in expanding its capacity. This expansion positions the company to meet future energy demands and capitalize on emerging market opportunities, particularly in renewable energy.
The a2 Milk Company Limited (ASX: A2M)
The a2 Milk Company Limited’s financial results for the half-year ending on 31 December 2023 demonstrate its successful execution of strategic initiatives, leading to strong performance during this period. Group revenue increased by 3.7% compared to the previous year, reaching $812.1 million.
The ASX company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 5.0% to $113.2 million, with an EBITDA margin of 13.9%, reflecting a 0.2 percentage point improvement. Net profit after tax (NPAT) attributable to the company’s owners saw a notable uptick of 15.6%, totaling $85.3 million. Basic earnings per share (EPS) also rose by 18.6% to 11.8 cents.
Closing with a strong note, the company reported a net cash position of $792.1 million, reflecting a $34.9 million increase since June 2023. The operational cash conversion rate stood at an impressive 86.8%, highlighting the company’s financial health and efficient capital management during the reporting period.