This is an updated version of the report published on 20 April 2023 at 3:55 PM (GMT+10)
Company Overview: The Lottery Corporation Limited (ASX: TLC) is an Australia-based lottery company engaged in providing lottery business across the globe. PWR Holdings Limited (ASX: PWH) is involved in the designing, engineering, production, testing, validation, and sales of customised aluminium cooling products and solutions to the motorsports and automotive original equipment manufacturer (OEM) industry in Australia. The Kalkine’s Sector Report covers the Investment Summary, Sector Overview & Supporting Catalysts, Data Insights & Analysis, Financial Metrics, Financial Commentary, Risks, Outlook, Technical Analysis along with the Valuation, Target Price, and Recommendation on selected stocks.
Investment Summary
Sector Overview and Supporting Catalysts
Data Insights and Analysis
Index Performance
Key Drivers versus Key Constraints
Investment theme and stocks under discussion (TLC, PWH)
After understanding the sector, let us now look at two companies listed on the ASX. The price potential of the companies under discussion has been analysed based on the EV/EBITDA valuation multiple method.
1. ASX: TLC (The Lottery Corporation Limited)
(Recommendation: Buy, Potential Upside: Low Double-Digit, Mcap: AUD 10.99bn)
TLC is an Australia-based lottery company engaged in providing lottery business across the globe.
The stock has witnessed a dip of ~2.53% in last one month, and over the last three months, it has surged by ~3.93%. The stock has a 52-week low and 52-week high of AUD 3.905 and AUD 5.350, respectively and is currently trading slightly above the 52-week high-low average. TLC was last covered in a report dated ‘16 February 2023’.
2. ASX: PWH (PWR Holdings Limited)
(Recommendation: Speculative Buy, Potential Upside: Low Double-Digit, Mcap: AUD 1.01bn)
PWH is involved in the designing, engineering, production, testing, validation, and sales of customised aluminium cooling products and solutions to the motorsports and automotive original equipment manufacturer (OEM) industry in Australia.
The stock has witnessed a surge of ~7.29% in last one month, and over the last three months, it has dipped by ~14.71%. The stock has a 52-week low and 52-week high of AUD 5.610 and AUD 12.530, respectively and is currently trading above the 52-week high-low average. PWH was last covered in a report dated ‘24 August 2022’.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is neither an Indicator nor a guarantee of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 20 April 2023. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual’s appetite for upside potential, risks, holding duration, and any previous holdings. An ‘Exit’ from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.
Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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