Netwealth Group Ltd (ASX: NWL)

Moving in a competitive territory: Netwealth Group Ltd (ASX: NWL) is a well-known name in investment platform technology that provides investment management solutions to financial intermediaries, and advices on investments and superannuation. The specialist platform provider has been successful in taking a share in the market when it comes to institutional platform services and competes with banks and other financial companies; and has witnessed 51% growth in financial intermediaries from June 2016 to June 2018. The group finds strength in providing better platform driven offerings against vertically integrated companies or banks. This has already been reflected in its FY18 result wherein EBITDA increased by 69.7% to $42.3m while EBITDA margin increased by 10.1% to 50.8%. In fact, NPAT surged higher by 72.7% to $29.0m with NPAT margin rising by 7.4% to 34.9% in FY18. However, the stock is already trading at a higher level. The resistance can be seen around $8.1 while support is noted around $7.9. There has been some contraction in the latest trading session. The stock rose up about 27% in last six months and was down about 9% in last three months. Trading at $ 7.980, and price to earnings ratio of 90.400x, the stock is a watch for a better buying opportunity with additional catalysts being looked to be falling in place while pricing competition prevails.
 

REA Group Ltd (ASX: REA)

Paving way forward on strong fundamentals: REA Group Ltd (ASX: REA) has been banking on the landscape of residential property market and prices. The group has a competitive advantage and can dominate the market while it undergoes pricing changes. While listing volumes have had a troubled run, the group has been able to generate growth in revenue and earnings on a yearly basis. REA has the capability to generate decent returns even with high supply and is boosted by the online platform. While competition from Domain Holdings prevail, REA has strong fundamentals and can achieve higher target price. The group has reported a 20% revenue growth from core operations with an increase in EBITDA of 22% to $463.7m in FY18. The reported net profit was up 23%. The group made a 20% rise in full year dividend despite the continuous pitfall noted in the property market. New experiences with Agent Edge for property advertising are gaining traction. REA also aims to have long term offshore opportunities and through its latest acquisition of Hometrack Australia, the group is vouching for better cost synergies. We have a “Hold” on the stock at the current price of $ 79.550 while it trades at a P/E of 41.580x and may witness resistance around $ 80.5.
 

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