In today’s daily we have covered stock research on iBUY  (BUY).









2 Stocks To BUY In November + Upcoming dividends





 
The S&P 500 was up by 5.53points or 0.27%on Monday to 2069.03 points. U.S. stocks opened modestly higher on Monday, pushing the Dow and S&P 500 further into record territory on the back of multiple merger deals and hopes China will take further accommodative monetary policy action. Best Buy Co. jumped 2.4 percent before the start of the holiday shopping season. Urban Outfitters Inc. advanced 5.9 percent, the most in the Standard & Poor’s 500 Index. 

Across the Atlantic, the FTSE Eurofirst 300 pared its early advance but still ended 0.1 per cent higher at a two-month peak. BT shares rose 3.7 per cent after the telecoms group confirmed it was in talks to acquire the mobile businesses of EE or Telefónica. The Shanghai Composite index rose 1.9 per cent to a three-year high while, in Hong Kong, the Hang Seng China Enterprises Index of “H” shares climbed 3.8 per cent, its biggest one-day gain in a year. Tokyo was closed for a holiday.



BT Daily Chart (Source – Thomson Reuters)
S&P ASX 200was up by 57.5 points or 1.08%on Monday and closed at 5361.8 points. Local shares rose on Monday after major markets in the United States, Britain and around Europe all lifted in response to increased global stimulus. BHP Billiton posted its biggest daily jump in almost three years, up 3.8 per cent to $32.90. The company told an investor meeting of plans to cut $US1 billion ($1.15 billion) worth of costs in the 2016 financial year.
Westpacadded 0.8 per cent to $32.50, while Commonwealth Bank and National Australia Bank each rose 0.4 per cent to $80.42 and $32.40 respectively. ALS Ltd, a laboratory that provides testing services to the mining industry, was the best-performing stock in the ASX 200, spiking 17.9 per cent to $5.28, after beating its interim profit guidance for $64 million with a reported $67.7 million. SPI futures are down 5 points. The Australian dollar is trading at US86.09¢, compared with Monday’s local close of US86.83¢.  Iron ore is up 0.2 per cent at $US70.42 a tonne.

BHP Daily Chart (Source – Thomson Reuters)
 
Top Performers on the ASX 200 were :-


 
Stock of the Day - IBY (BUY)

iBuy Group Limited (IBY) has recently provided updates of its General Meeting held on 13th November 2014. As per the meeting, a special unanimous resolution was passed for the change of name, i.e., the Company’s name be changed from iBuy Group Limited to Ensogo Limited and the constitution be amended to reflect this name change by changing all references to iBuy to Ensogo Limited. It also announced that name change is required to be registered with ASIC which will take place immediately.

As reported by the Company, the revenues for the half year ended 30 June 2014 were $25,474,692 and loss from ordinary activities after tax attributable to the owners of IBY was $6,658,281. The Company did not pay, recommend or declare any dividends during the financial period. The Company recently gained control of Ensogo Holdings Limited Hong Kong and its subsidiaries, namely Livingsocial Sdn Bhd, Ensogo Co. Ltd, PT Livingsocial and Ensogo Inc. IBY’s growth strategy is based on increase economies of scale by integrating acquired businesses into a single technology platform and regional supply chain under a common consumer brand; driving topline growth by increased number of flash sale events and cutting delivery times; and identifying acquisition opportunities in Southeast Asia to increase IBY’s scale and scope. The Company stated to deliver its objective of one technology platform and one brand by Q1 2015.

Operating Metrics (Source – Company Reports)

IBY operates in six Southeast Asian countries, totaling 8.2m email subscribers and pro forma H1 14 gross turnover of $71.2m.


Total Orders (Source – Company Reports)

As per the September Quarterly updates, the Company reported receipts from customers during September Quarter of $37.7m, which were marginally up on the June quarter. Payments to merchants and staff costs were also little high than expected. Nonetheless, the gross turnover projections for CY14 have been reasonable. 


Additional Capabilities on Top of Traditional B2C e-Commerce (Source – Company Reports)

The Company witnessed a good performance in September and July with regards to gross turnovers and cash collections. Weedy performance in August in Singap? 0 overall performance though. Singapore has rebounded in September and October. Operating cashflow for the quarter was -$6.2m which was below the June quarter figure of -$1.5m. With $7.5m cash at the period-end, IBY is comfortable to fund the business till the breakeven which is expected in mid-2015. With efforts to rationalize the work force, the Company expects to reduce operational expenditure. The Company confirmed that the staff costs will normalize to $5.5m- $6.0m per quarter. Marketing costs are expected to rise in view of higher spend in 4Q14 during Christmas trading.


Unique Visitors (Source – Company Reports)

Infact, the Company recently provided responses to various questions raised on increase in payments to suppliers. Specifically, IBY stated that the payments were made to allow the Company to access preferential business terms such as healthier pricing and additional product selection. The Company also stated that October has been the single highest gross turnover and cash collection month in IBY’s history. Further, IBY announ?ced that the development of the single Ensogo technology platform on which all countries will operate before the end of March 2015 is expected to incur costs of less than $1,000,000.

Moreover, there exists a positive trend growth in view of increase in unique visitors in September in comparison to June along with increase in monthly transactions. There was also an increase in monthly repeat buyers.

However, the Company has to be time and again cautious of few factors that are considered to pose a threat to its performance. These include high level of competition in flash sales industry, maintaining merchandising and product quality in view of IBY’s aim of acquiring and retaining a large customer base, maintaining healthy relationships with suppliers, monitoring customer acquisition costs, currency risks, and risks related to merchandising staff.


Strategic Objectives (Source – Company Reports)

Nonetheless, attributes such as cash-rich position (cash to market capitalization at around 11.8%); capability and skill to capitalize on its market-leading positions in the rapidly growing e-commerce / flash sales market; and gradual improvement in performance reflect that the Company will gain momentum as expected. Accordingly, we put a BUY recommendation for this stock at the current price of $0.115.
 

 


 
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