Smartgroup Corporation Ltd Expanding Service Capabilities Through Acquisitions

Expanding service capabilities through acquisitions: Smartgroup Corporation Ltd (ASX: SIQ) shares surged 29.18% in the last three months but corrected about 11.11% in the last one month (as at February 05, 2016). SIQ has completed the acquisition of Trinity Management Group assets for an initial payment of $1.7 million. Based on this, the company indicated for pro-forma forecast calendar year 2016 (CY16) revenues of $3 million and EBIT of $1.2 million. The group also had provided a trading update for the period ending 31 December 2015 and the update is preliminary and subject to the year-end audit and sign off. The group expected to report CY15 revenue growth (~$ 90 million) of 24% over the previous year; CY15 EBITDA growth of 46% (~$ 36 million) over the previous year; CY15 NPATA of $ 26 million, which is a 49% increase on the previous year and CY15 NPATA per share of $ 0.25, which is a 46% increase on the previous year. These figures are unaudited and excluding any impact of the Advantage Salary Repackaging acquisition, including a one-off after-tax acquisition expense of $ 0.8 million to be booked in the second half of 2015. Advantage Salary Packaging acquisition opportunity consisted of expanding Public Benevolent Institutions (PBI) footprint to a broader segment of the outsourced salary packaging market, including charities and aged care, the potential to grow novated leasing offerings under group ownership, a good cultural fit and alignment with management. The key terms of the acquisition entailed an agreement to acquire 100% of Advantage Salary Packaging for $ 60.8 million (revenues of $ 14.7 million and EBITDA of $ 10.3 million). Given the ongoing efforts, we believe to adopt a wait and watch approach and thus recommend “HOLD” at the current price of  $4.56 To read the complete report click here 

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Challenger Ltd – Reiterated Positive Outlook

Reiterated positive outlook: Challenger Ltd (ASX: CGF) stock corrected over 5.29% during this year to date (as of February 01, 2016) raising concerns among investors over its first half of 2016 performance. But, management recently reiterated that they would achieve a first half of 2016 normalized profit after tax in the range of $180 million to $185 million and a statutory profit after tax in the range of $225 million to $235 million (which includes Kapstream sale). Moreover, Standard & Poor’s Ratings Services (S&P) issued a stable outlook and an A rating for Challenger Life Company Limited, while Challenger Limited was assigned a BBB+ rating. CGF also reported that its FY16 Life COE is on track to achieve $585 million to $595 million guidance range. The recent correction in the stock placed CGF at attractive valuations which is trading at a reasonable P/E and has a decent dividend yield. We remain bullish on the stock and give a “HOLD” rating at the current price of  $7.53  To read the complete report click here

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Which Ones Are Good To Invest In The Leisure, Travel And Tourism sectors?

Improving VIP programs turnover from domestic operations: Crown Resorts Ltd (ASX: CWN) stock recovered about 7% (as of January 29, 2016) in the last three months after facing pressure due to its poor performance in its Macau business. CWN has been focusing on its domestic business, and accordingly, the group’s VIP program play turnover in Australia reported a 41.8% year on year (yoy) rise to $70.8 billion for fiscal year of 2015. Moreover, Australian resorts witnessed a strong performance during July to October 2015 period, wherein the main floor gaming revenues (without VIP program play revenue) surged 10% yoy as compared to the earlier corresponding period. James Packer had recently resigned from the director position of the group, and intends to focus on Crown’s ongoing development projects across Sydney and Melbourne as well as its online platforms.  To read the complete report click here

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Crown Resorts Ltd – Improving VIP Programs Turnover From Domestic Operations

Improving VIP programs turnover from domestic operations: Crown Resorts Ltd (ASX: CWN) stock recovered about 7% (as of January 29, 2016) in the last three months after facing pressure due to its poor performance in its Macau business. CWN has been focusing on its domestic business, and accordingly, the group’s VIP program play turnover in Australia reported a 41.8% year on year (yoy) rise to $70.8 billion for fiscal year of 2015. Moreover, Australian resorts witnessed a strong performance during July to October 2015 period, wherein the main floor gaming revenues (without VIP program play revenue) surged 10% yoy as compared to the earlier corresponding period. James Packer had recently resigned from the director position of the group, and intends to focus on Crown’s ongoing development projects across Sydney and Melbourne as well as its online platforms.  To read the complete report click here

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Oil Search Ltd Strong performance

Strong performance: Oil Search Ltd (ASX: OSH) stock has witnessed significant fluctuations in the past six months. However, OSH’s quarterly results to December 31, 2015 give an indication of strong operation and financial foundation. The results revealed production in the fourth quarter of 2015 of 7.51 mmboe and a record 52% rise in 2015 full year production to 29.25 mmboe than production in 2014 which even exceeds the upper end of guidance range. A surge of 62% in total sales for the 2015 full year at 28.76 mmboe was noted against 2014. OSH reported that its fourth quarter production net to Oil Search from the PNG LNG Project was 5.73 mmboe and the base PNG oil and gas business contributed 1.79 mmboe. The PNG LNG Project witnessed an annualised production rate of 7.6 MTPA during the quarter as opposed to 7.4 MTPA in the previous quarter and 7.4 MTPA for the 2015 full year. However, the company reported for lower product sales than production due to timing of liftings. Total revenue for the quarter was 10% lower at US$342.9 million than the third quarter given the lower global oil and gas prices. OSH also refinanced its two existing US$125 million bilateral revolving credit facilities. Overall, the company’s performance appears to be robust. The company with major part of its operations located in Papua New Guinea has successfully quadrupled its production in the last two years. Based on a solid operation and financial foundation, we expect the current stock prices to improve in long term and hence put a “Buy” recommendation on OSH at the current price of  $6.50  To read the complete report click here

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Super Retail Group Ltd – Solid Sports segment contribution

 

Solid sports segment contribution:For the full year 2015, Super Retail Group Ltd (ASX: SUL) recorded a 7.1% increase in its group sales to $2.24 billion with a major contribution from sports segment. SUL made $90 million investments for future growth in new and refurbished stores and the development of multi-channel business capabilities.To read the complete report click here 

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FIVE STOCKS TO LOOK AT

Solid sports segment contribution:For the full year 2015, Super Retail Group Ltd (ASX: SUL) recorded a 7.1% increase in its group sales to $2.24 billion with a major contribution from sports segment. SUL made $90 million investments for future growth in new and refurbished stores and the development of multi-channel business capabilities.To read the complete report click here 

2016 ALL ORDINARIES ASX Mid Cap Stocks Australian Mid-Cap Dividend Stocks Dividend Yield 3%+ S&P/ASX 200 S&P/ASX 200 Consumer Discretionary S&P/ASX 300 S&P/ASX All Australian 200 S&P/ASX SMALL ORDINARIES Uncategorized