Five great potential stocks to hold

JB Hi-Fi Limited

JBH Details
Finished raising capital: JB Hi-Fi Limited (ASX: JBH) has finished raising funds via retail shortfall bookbuild and finished the Retail Entitlement Offer of raising $135 million. About 1.7 million new shares are offered through the retail shortfall bookbuild, and a clearing price of $29.40 per new share was achieved which represents a premium of $3.20 above the offer. Moreover, JBH had already raised $259 million through the Institutional Entitlement Offer. JBH has acquired 100% of The Good Guys for the total cash consideration of $870 million. This acquisition would strengthen their presence in the home appliances market as well as generate net synergies of $15 - 20 million per annum to the combined business after a three-year integration period, excluding one-off implementation costs. Meanwhile, JBH stock rose 31.06% in the last six months (as of October 14, 2016), and we maintain a “Hold” recommendation on this dividend yield stock at the current price of $28.53
 

JBH Daily Chart (Source: Thomson Reuters) 

Flight Centre Travel Group Ltd

FLT Details
Strengthened Indian presence: Flight Centre Travel Group Ltd (ASX: FLT) has diversified its India business by acquiring Bengaluru based Travel Tours Group (TTG), a leading local travel group with interests in foreign exchange, the MICE sector and in leisure, corporate as well as wholesale travel. Moreover, FLT has posted $AU150 million in FY 16 in total transaction value (TTV) from its 18 locations. TTV from FLT's established businesses in India during FY16 had reached $AU419million, and about 70% was coming from the large FCM corporate business. The remainder came from FLT's emerging MICE and FX operations, and from a small network of leisure travel shops.
 

 

Recent Acquisitions (Source: Company Reports) 

Based on FY16 results, the combined India business would have surpassed South Africa to become FLT's sixth largest country by sales behind Australia, the USA, the UK, Canada and New Zealand. Additionally, FLT is continuing to expand in Europe and has secured presence in five key countries Sweden, Denmark, Norway, Finland and Germany through the agreement to acquire corporate businesses owned by European online travel agency, eDreams ODIGEO. The group even acquired a minority interest (49%) in the Gold Coast-based Ignite Travel Group to further diversify its Australian sales network. We give a “Hold” recommendation on the stock at the current price of $ 34.90 
 

FLT Daily Chart (Source: Thomson Reuters) 

Sirtex Medical Limited

SRX Details
Launched SIRCCA: Sirtex Medical Limited (ASX: SRX) is holding its AGM on October 25, 2016, and has recently launched SIRCCA, a new randomised controlled clinical study of SIR-Spheres Y-90 resin microspheres, for patients with unresectable Intrahepatic Cholangiocarcinoma, also known as iCCA. Cancer researchers from Assistance Publique – Hôpitaux de Paris (AP-HP) and The Asia-Pacific Hepatocellular Carcinoma Trials Group (AHCC), National Cancer Centre Singapore and Singapore Clinical Research Institute (SCRI) intends to collaborate on a prospective meta-analysis which would combine the impending results of two large, randomized controlled studies of SIR-Spheres Y-90 resin microspheres versus sorafenib. The results of the prospective meta-analysis are expected to be out in CY 2017. We give a “Hold” recommendation on the stock at the current price of $ 29.49 
 

SRX Daily Chart (Source: Thomson Reuters)

Contango Microcap Limited

CTN Details
Turnaround from loss to profit:  Contango Microcap Ltd (ASX: CTN) has entered into an agreement with stockbroking firm, Taylor Collison Limited to underwrite the CTN’s Dividend Reinvestment Plan (‘DRP’) for the FY16 final dividend. Taylor Collison Limited underwrote the DRP to a shortfall up to $6.0 million or 99% of the dividend with the support of new and existing sophisticated and professional investors.

 

FY 16 Consolidated Financial Performance (Source: Company Reports)
 
On the other hand, CTN had signed a contract to sell its fund management operation, Contango Asset Management Limited on 24th June, 2016 and has raised its stake in Contango Income Generator Limited to 38.4%. CTN stock rose 16.32% in the last six months (as of October 14, 2016), and has a decent dividend yield. Accordingly, we give a “Hold” recommendation on the stock at the current price of $ 1.09

 
CTN Daily Chart (Source: Thomson Reuters) 

Super Retail Group Limited

SUL Details
Restructuring Businesses: Super Retail Group Ltd (ASX: SUL) reported 8.2% growth in the sales to a $2.42 billion in FY 16 (for 53 weeks to 2nd July 2016) and the normalized net profit after tax increased by 2.2% to $108.6 million as compared to the corresponding period of FY 15 (52 weeks) after adjusting for restructuring costs and brand name impairment. The restructuring cost is of $45.8 million after tax related with transformation of Rays and Infinite Retail businesses. SUL has invested in new and refurbished stores.

 

FY 16 Performance snapshot (Source: Company Reports)
 
Moreover, in FY 17 the group forecasts their unallocated costs to be circa $21m, including corporate $8m, unutilized distribution center storage of $5m, Digital $5m, and Other $2m. SUL has planned capital expenditure of circa $115m to support the larger store development program, Rays transformation and investment in information systems. Meanwhile, SUL stock rose 26.99% in the last six months (as of October 14, 2016) and the company is having a decent dividend yield. We give a “Hold” recommendation on the stock at the current price of $ 10.36

 
SUL Daily Chart (Source: Thomson Reuters)

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