Top Stocks To Stick With

Vita Group Ltd


VTG Details

Renewed Agreement with Telstra: Vita Group Limited (ASX: VTG) stock has delivered an outstanding performance of 80.54% in the last six months (as of June 21, 2016). This increase in the stock is driven by their solid first half 2016 performance, which delivered a 23% increase in revenue of $321.2 million and a 46% rise in EBITDA to $30.4 million as compared to corresponding period of 2015.
 

Vita’s performance (Source: Company Reports)
 
Moreover, the group has extended its Telstra Dealer and Master License Agreement till December 31, 2020. The extension of this agreement would enable them to generate further revenue growth for four years until the agreement is again extended in 2020. VTG has also declared a 40% increase in the fully franked interim dividend to 5.76 cents. We believe Vita remains a good investment opportunity despite its recent rise and accordingly, we maintain our “Hold” recommendation on the stock at the current price of  $4.03
 

VTG Daily Chart (Source: Thomson Reuters)
 
Flight Centre Travel Group Ltd


FLT Details

Mixed outlook: Flight Centre Travel Group Ltd (ASX: FLT) stock plunged over 25.22% in the last three months alone (as of June 21, 2016) as the group issued a profit downgrade for earnings of 2%-5% lower than its previous year’s earnings. This down grade was highlighted owing to Zika virus affecting popular destinations coupled with ongoing uncertainty on Brexit and higher expenditure incurred by the group to enable future expansion. However, despite subdued trading, FLT expects to surpass annual sales by $1.4b during 2015/16 with total transaction value for the year to June 30, 2016 to exceed $19b globally as opposed to $17.5b of FY15.
 

Long term initiatives (Source: Company Reports)
 
On the other hand, FLT has a strong business model and had acquired StudentUniverse.com and BYOjet.com which combined together should report in excess of AU 500 million in TTV during FY17. FLT also plans to launch Ireland leisure travel business and Aunt Betty, a virtual travel online brand in FY17. The group has also cut the fares to attract travelers. Based on the foregoing, we recommend a “Hold” on the stock at the current price of $23.74
 

FLT Daily Chart (Source: Thomson Reuters)
 
JB Hi-Fi Limited


JBH Details

Positive outlook: JB Hi-Fi Limited (ASX: JBH) stock has been performing well and delivered over 28.3% in the last six months (as of June 21, 2016) driven by its strong expansion efforts and outlook. The group is planning to acquire The Good Guys though they did not reach a formal agreement.
 

 Strong expansion efforts (Source: Company Reports)
 
JBH is expected to have 58 HOME stores at the end of FY16 and 75 HOME stores at the end of FY17. They estimate over 50 JB HI-FI stores with small appliances by the end of FY16. JBF is expected to pick up around $200 million in new sales due to fall of competitor Dick Smith earlier this year. We maintain our “Hold” recommendation on the stock at the current price of $23.74
 

JBH Daily Chart (Source: Thomson Reuters)
 
Magellan Financial Group Ltd


MFG Details

Increase in Funds Under Management: Magellan Financial Group Ltd (ASX: MFG) reported better funds under management (FUM) for the month of May 2016 and generated $42.6 billion as compared to $39.96 billion in April 2016. MFG stock fell over 6.8% in the last six months (as of June 21, 2016) as they reported a weak FUM in the month of March and April 2016.
 

MFG May performance (Source: Company Reports)
 
However, the company seems to be back on track with a better May FUM result. Consequently, the stock recovered over 7.9% (as of June 21, 2016) in the last three months with 7.8% jump in the last five days alone and we believe MFG has more potential in the coming months. The group witnessed net inflows of $158 million in May 2016. We maintain our “Buy” recommendation on this dividend yield stock at the current price of $24.00
 

MFG Daily Chart (Source: Thomson Reuters)
 
Seek Limited


SEK Details

Transition Phase: Seek Limited (ASX: SEK) reported that for second half 2016 the education business is expected to be in the bottom of the cycle. On the other hand, since they are going through a transition, the group’s profit growth is expected from second half 2017. SEK is launching new products and services in large scale through global collaboration. The revenue growth for FY16 is expected to be in the range of 15%-18%, while EBITDA growth would be in the range of 5%-8% and NPAT (before profit of IDP sale) will be around A$195 million as compared to FY15. Meanwhile, Joe Powell, Managing Director of Seek Education has decided to resign. Zhaopin, SEK’s subsidiary announced 19% revenue growth for the March 2016 quarter while EBITDA dropped 12%. SEK stock has risen 11.35% (as of June 21, 2016) since the last six months and still trading at attractive P/E against its peers. Accordingly, we maintain our “Hold” recommendation on the stock at the current price of $16.20
 

SEK Daily Chart (Source: Thomson Reuters)
 
REA Group Limited


REA Details

Geographical Expansion: REA Group Limited (ASX: REA) has completed the acquisition of Asia’s focused portal iProperty Group as well as invested in US’s Move Inc. REA has also acquired Flatmates.com.au Pty Ltd which is a market leading player in share accommodation in Australia as per announcement of May 31, 2016.
 

REA Financial performance (Source: Company Reports)
 
The company has increased the marketing initiatives in Italy to continue its expansion in Europe. REA reported a strong revenue increase of 20% in nine months ending with March quarter against prior corresponding period and expanded its free cash flow by 31% on a yoy basis. Accordingly, REA stock is up 8.2% last three months (as of June 21, 2016) and surged about 4% on June 22, 2016, and we maintain our “Hold” recommendation on this stock at the current price of $59.89
 

REA Daily Chart (Source: Thomson Reuters)
 
Ramsay Health Care Limited


RHC Details

Withdrew Chinese investments: Ramsay Health Care Limited (ASX: RHC) pulled out of a joint venture with Chinese company Jinxin in the city of Chengdu. This move from the group indicates its strategic updates and cautious expansion efforts given the tough conditions in the Chinese economy. RHC has integrated with Ramsay Santé and Générale de Santé, and further acquired nine hospitals in Lille, France. The group finished $126 million in brownfield capacity expansions. Ramsay has upgraded the guidance of Core NPAT and Core EPS growth to 15% - 17% for full FY 2016 as opposed to the previously stated 12% to 14% growth. The stock has generated 16.2% in the last three months (as of June 21, 2016) and we maintain our “Hold” recommendation on the stock at the current price of $70.99
 

RHC Daily Chart (Source: Thomson Reuters)

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