Adairs Limited

ADH has recently posted its financial growth report during its annual general meeting on October 26, 2018.

Decent financial results:For FY18, the company posted 21% rise in gross profit up to $190m, and netdebt reduced by $15.4m to $12.2m. Earnings per share reported 45% rise to 18.4 cents. Online sales grew by 75% up to $42m. EBIT margins posted 46.9% rise to $45.3 million in FY18. Despite of strong fundamentals posted by the company the results were not in line with the market estimation (which were on further higher side). Nonetheless, the group declared a 68.8% rise in full year fully franked dividends, which is a stupendous rise.

Technically,the scrip is trading on the lower zone of the bollinger bands. On a 3-month time frame on the charts, the scrip made “Doji” candle on September 27, and is trading in negative zone ever since from there. Candles are forming lower lows in the price charts. Looking at the major indicators like RSI, the stock is in oversold region indicating sellers might lose control and buyers soon may take over them in near term. Moving average convergence and divergence indication (MACD) is also in negative territory. All indicators along with price chart pattern indicates situation to ‘Hold’ and watch the scrip.

The market cap of ADH was recorded $298.57m, with price to earnings ratio (P/E) of 9.78 x as on October 30, 2018. At current juncture, ADH is trading at the price levels of $1.8, and with financials below estimates along with current price levels trading at lower zone of bollinger bands as indicated on the technical charts, we give a “Hold” recommendation on the scrip at the current price levels of $1.8 while the stock still looks interesting from high dividend yield (7.5%) perspective.


FY19 Guidance (Source: Company Reports)

Nanosonics Limited

NAN has presented its annual report for FY18 on August 20, 2018.

Moderate Financials:Total operating expenses recorded 15% rise to $42.6 million compared to $37 million in prior year. Cash and cash equivalents posted 10% rise and were up by $6.4 million up to $69.4 million, backed by ongoing growth and expansion projects. 10% decrease in sales was posted from $67.5m in FY17 to $60.7m in FY18.

Geographical and Product expansion:Company is expanding its operations in new markets with the introduction of Trophon and new products. Company is focused on one or more new solutions for infection prevention by the end of FY20 subject to regulatory approvals.

Technically the scrip is in downtrend from the start of October month. At current juncture the scrip is trading slightly above the lower bollinger bands. The scrip showed pull backs on the charts from October 25 onwards. Higher highs are formed on the price charts. Looking at major indicators like RSI, slight weakness in bearish trend is noted. All indicators along with price pattern indicate that pull backs can be expected in near term, and it’s a situation to hold the scrip at current levels of $2.99.
The market cap of NAN was recorded at $890.35m, with price to earnings ratio (P/E) of 154.69 x as on October 30. At current juncture, scrip is trading at the price levels of $2.99. Moderate financials and new product introduction in line with the management plan, along with current price levels trading slightly above the lower zone of Bollinger bands on technical charts, exhibit a “Hold” scenario at the current levels. We maintain a “Hold” recommendation on the scrip at the current price levels of $2.99.
 
 

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