Mesoblast Limited
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MSB Details
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Positive update on heart failure trial and funding drove the stock: Mesoblast limited (ASX: MSB) stock surged over 15.34% on July 01, 2016 driven by the group’s update on heart failure trial and funding of its clinical operations. The group reported that their interim analysis would evaluate the heart failure Phase 3 trial’s primary endpoint to give meaningful data in first quarter of 2017. MSB expects to incur over US$13 million for the trial costs of interim analysis. The group’s current cash reserves of around US$80 million are sufficient to fund the operations for the next 12-15 months. Moreover, MSB reported that they have decent funds for further Tier 1 programs for degenerative disc disease, graft versus host disease, and biologic-refractory rheumatoid arthritis. The group established a concrete equity facility for up to $A120 million or $US90 million for over 36 months to get funds when required.
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Recommendation: We maintain our “Hold” recommendation on the stock at the current price of $1.24
Aconex Limited
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ACX Details
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Agreement with ExxonMobil: Aconex Limited (ASX: ACX) stock surged over 7.7% on July 01, 2016 as the group made a four-year enterprise agreement with ExxonMobil Global. With this agreement, the entire ExxonMobil firm and its affiliates would use the group’s project-wide collaboration solutions to connect teams and control processes for engineering and construction projects globally. The negotiated terms between both the parties would enable ExxonMobil with scale and flexibility by enhancing its usage, as new projects and users are added to the Aconex platform. On the other hand, ACX stock already rallied over 29.8% during this year to date (as of June 30, 2016) placing the stock at higher levels.
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Recommendation: We give an “Expensive” recommendation on the stock at the current price of $7.55
FlexiGroup Limited
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FXL Details
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Outstanding dividend yield: FlexiGroup Limited (ASX: FXL) rose 6.03% on July 01, 2016 with change in director’s (Andrew Abercrombie) interest notice. The group reported that it is refocusing on core (high ROE) business units of Cards, Certegy and Leasing, while discontinuing non-core (low ROE) business units which includes Blink, Think Office Technology and Flexi Enterprise; and divesting or writing off associated assets. The group is also launching new payments business and accordingly started getting partners. FXL has a solid dividend yield and expects its FY16 dividend to be in the range of 50% to 60% of cash NPAT. Moreover, FXL agreed to acquire a minority equity interest in Kikka Capital, an online, non-bank lender to Australian small to medium businesses. The group agreed to invest $2 million of equity (having an option to enhance its investment in the future). The latest developments with impairment costs have let FXL guiding for statutory net profit after tax dipping by around 35% for the year to $54.2million. Meanwhile, FXL is still trading at an attractive P/E.
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Recommendation: We give a “Speculative Buy” recommendation on the stock at the current price of $1.84
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Enhancing focus on core business (Source: Company Reports)
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