The companies to keep on your radar this reporting season

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The Olympics may be over for another few years, but extraordinary performances and record-breaking results remain strong, similar to the performance of the Australian share market recently.

The local sharemarket hit another all-time high of 7,615 (after rising15% so far this year), despite the recent wave in COVID-19 cases across the country.

We are also in the crux of a highly anticipated reporting season, where there are a few companies, in particular, to keep on your radar.

cba shares reporting season dividends share buyback

With all this in mind, let's dive into three key market themes for the coming month.

On to a winner

Last week (the first week of August), we saw the ASX200 record its best gain in eleven weeks, after rising 2%. Continuing this growth trajectory, this week, the market soared to 7615 points for the first time in history.

The upwards trend appears to be unshakable as abundant buying persists across most sectors. The market's technical indicators are supporting the fundamentals over the year ahead - meaning solid and quality stocks should continue to perform well. So if you're playing the long-term investing game, you'll be in good stead.

Recently we've seen some really sizeable gains in the market that have been quite telling. For example, local favourite, Afterpay (ASX:APT) announced it could be taken over by US payments giant Square. The news saw Afterpay shares jump 36% last week to $132.15. The entire buy now, pay later space benefitted from the news, as the massive vote of confidence boosted the sector's sentiment and that lifted competitors share prices too.

For example Zip (ASX:Z1P) shares jumped 16% last week on the news, Splitit (ASX:SPT) rose 24%, and Sezzle (ASX:SZL) rose 10% Overall, as a result of buying into the tech stocks, the tech sector rose 14% last week, which was one of the tech sector's best weekly gains on record.

Looking at commodities, lithium, has also been performing strongly.

Lithium is the key ingredient in batteries in laptops, and electric cars. Forecasts for the resource look promising and suggest lithium prices will at least double in four years. Many global investment houses are supporting this notion. Pilbara Minerals (ASX:PLS) is a local lithium producer and their shares jumped 18% last week, and this week they're trading 17% higher.

A season's best

While the share market has been reaching record highs, interest rates have remained at record lows. The Reserve Bank of Australia has vowed to keep the cash rate at 0.1% until the next time the Olympics roll around in 2024.

Low interest rates are driving investor demand for shares, especially those that have a positive earnings outlook. As such this, earnings season investors are focused on share buybacks and dividends. Bets are on for earnings to score a 26% increase for the 2021 financial year which will be a key player in share price growth.

Dividend heavyweights will be worth watching as their prices are set to bulk up, such as Commonwealth Bank of Australia (ASX:CBA). Its shares pumped up to a brand new record of $109.03 after it reporting a 19% jump in profit to $8.8 billion in the 2021 finanical year (beating the $8.6 billion expected), which was supported by stronger business, home lending, and larger deposits (as in Aussies are saving more).

What also boosted CBA's profit was that its COVID-19 loan impairment expenses dropped 78%, reflecting the improving economic conditions in the financial year. Plus CBA announced a $2.00 final dividend, a big turn around from the same time last year's dividend of $0.98 per share.

So, if you hold CBA shares or buy them before August 17 you'll be eligible for $2 dividend, payable on September 29. On top of that, CBA announced a $6 billion share buyback to return money to shareholders, (who hold or buy CBA shares before August 18).

Another example is Suncorp (ASX:SUN), who just reported a 13% jump in net profits to $1.3 billion which beat the $976.3m expected. They also declared a 40 cents per share dividend, a special 8 cents per share dividend and a $250 million share buyback. This success came from a 42% jump in insurance profit and a 69% jump in banking profit thanks to surges in lending and savings.

Outside the old reliables, overlooked outperformers will likely be the stars of the show. Expect to see them rise amongst the ranks and experience a share price rally. Investors could consider watching Telstra (ASX:TLS) on August 12.

Regarding Telstra - the market expects profit of $1.5 billion and a $1.4 billion share buyback following Telstra''s 50% of its mobile tower business for $2.8 billion?

Other companies to watch include BHP (ASX:BHP) reporting on August 17, and Breville (ASX:BRG) reporting the same day.

However, the key with reporting season is not just watch if the number was a rise or fall compared to last year, but the key Is to watch if the numbers are better than expected -then you'll likely see their share prices rally.

Hope on the horizon 

Business and consumer confidence data has taken a hit thanks to lockdowns across the east coast. Employment data is also tipped to show a decline in new hires and job listings, while unemployment is expected to rise.

Markets may see reluctance creep in if core economic data continues on a downwards trend. Slow and steady can be an effective strategy in these circumstances, so investors who stay the course long term often emerge victorious.

Hope comes in the form of vaccines. The New South Wales government wants 70% of the state's population to be vaccinated before restrictions start to ease. This is important as the Great Sydney Area is responsible for a large chunk of the country's economic activity. Vaccination rates are on the rise and will continue to do so with the addition of the Moderna vaccine, closely followed by Novavax.

Now the vaccine rollout is picking up speed, demand will remain for health services. Investors going for gold in the health sector should consider companies that manufacture and sell respiratory equipment and PPE, are involved in developing and administering COVID-19 vaccines or operate in the pathology industry.

In terms of direct shares, you could look into CSL (ASX:CSL), Healius (ASX:HLS), Ansell (ASX:ANN) and Sonic Healthcare (ASX:SHL). Otherwise, you could invest in an ETF that tracks the global health sector index and will offer diversified exposure to companies producing vaccines, such as Pfizer and Johnson & Johnson, as well as other leading health giants like Merck, United Health, and Roche. Popular options include the BetaShares Global Healthcare ETF (ASX:DRUG) and iShares Global Healthcare ETF (ASX:IXJ).

Happy trading!

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Jessica Amir is a market analyst and media presenter for Bell Direct, Desktop Broker and Bell Potter Online. She has more than 14 years' experience in financial markets.