Freelancer stock ramped up 176% since listing and over 93% year to date. The company’s main source of revenue is new and existing users posting new projects and completing the projects along with crowdfunding the contests on Freelancer.com and its regional websites.
FLN is the world’s largest freelancing and crowdsourcing marketplace by total number of users and total number of projects posted. The company has 44 regional websites, 19 supported countries, 33 supported languages and dedicated multilingual support team.
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Freelancer Financial Highlights (Source: Company Report)
In the fiscal year 2014, FLN posted net revenue $26.1 million on gross payment volume of $103.7 million, a growth of 39% from the previous year. FLN posted operating net loss after tax of $1.5 million compared to the fiscal 2013 operating NPAT of $1.1 million. Operating loss before interest, tax, depreciation and amortisation came in at $2.1 million compared to $1.2 million last year.
Three key factors that will speed up the growth of Freelancer in years to come are the substantial wage differential between the developing and developed countries. Rise in the labour supply for services on the back of internet expansion and better education level. Hike in demand with labour service prices declining.
FLN announced the launch of local jobs, tapping the increasing online local service market. The employers are enabled to hire anyone across the world, and with the launch of local job, hirers can even select a freelancer to undertake a local job on-premises. According to various reports, out of US$1.2 trillion jobs taken by the US freelancer workers, around 64% was taken within the local metro area, which is an encouraging development for Freelancer. As of now, the firm will launch the service in Australia and eventually across all sites. The users can press the “Hire” button on the homepage, and then can select if their job location needs to be specific or not. If the hirer select the local location then it will be matched with the freelancers available in the local area.
FLN launched a slew of mobile products across all the major platforms, enhanced website for mobile and native applications on the Android and iOS. Such initiatives helped an increase of 250% in Monthly Active Users (MAUs) on mobile in the second half of 2014.
FLN Daily Chart (
Source: Thomson Reuters)
We put a BUY reccommendation on the stock at the currrent price of $1.29.
Ozforex Group Ltd (ASX:OFX)
OFX Group has largely underperformedr this year so far with shares down almost 25% year to date compared to a gain by the S&P 200 ASX. Much of the decline for OFX have come after the earnings report in May. Though the stock is down, it presents a good buying opportunity for the investors as it holds potential to make a come back.
OFX Daily Chart (Source: Thomson Reuters)
Though the result disappointed the investors, OFX was able to post a rise in the earnings per share (EPS) of 18%. Turnover and operating income were up over 20% while free cash flow also witnessed a robust growth. Also, OFX registered a rise of 18% in the active clients i.e. people who have used OzForex’s services over the last 12 months. Not only, this but the active client base actually doubled over the past four years. OFX enjoys an increasing base of long-term customers, and the percentage of income from the long-term customers has also moved up for the firm.
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OZFOREX Financial Highlights (Source: Company Report)
Increased expenses may have one of the reason that made investors flee. It must be noted that a rise in the expense was primarily due to more spending on promotional costs and more hiring to support the growth.
Global payments industry is expected to be worth USD $2.3 trillion by 2018, and OFX is well poised to benefit from this. The company has been expanding into foreign markets, allowing it to benefit from cross-border transactions and trade finance. OFX has been successful in the US market, and despite competition, the firm has been able to grow its revenues in Asia.
For 2014, the Sydney-based company handled 142,000 clients facilitating $16 billion worth of money compared to $13.6 billion last year. The total number of tranactions for the firm increased by 21% to over 702,000. Owing to its scale of operations, the firm has been able to offer premium service to the clients even at discounted rates. Its scale of operation gives it a competitive advantage over rivals, who more often compete on one front ;price or service, but not both. Owing to the use of proprietary technology, the company is able to keep its costs low along with enhancing user experiencing. Also, the firm enjoys support of major banks, helping it to process transactions quickly, and at lower cost.
Owing to strong fundamentals, OFX was able to determine a fully franked dividend of 3.58 cents per share, making its full-year distribution to 7.08 cents. Among other factors, OFX appears a good investment if its able to push its active clients and transactions.
Based on the above reasoning, we recommend OFX a Buy at current price of $2.16.
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