Appen Ltd

Persistent Volatile Environment Dragging the stock Lower: Appen Ltd (ASX: APX) was added to S&P/ASX 200 Index, effective from June 18, 2018 as per June 2018 Quarterly Rebalance of the S&P/ASX Indices. The company has delivered strong performance for FY 17 over FY 16 with 50% growth in topline and 86% rise in the Underlying Net Profit After Tax. Additionally, at the end of April 2018, the company YTD revenues plus orders in hand for delivery were approximately $190 million. The company expects 2018 full year EBITDA to be at the upper end of $50 million to $55 million. As a result, APX stock has risen 4.60% in three months as on August 09, 2018 but is trading at a very high P/E. However, the stock was down 3.166% on August 10, 2018 and this may be owing to some profit booking looking at the already high levels and global macro scenario. Based on the foregoing, we give an “Expensive” recommendation on the stock at the current price of $ 11.010.
 

Sims Metal Management Ltd

Negative sentiments impacting the stock: Sims Metal Management Ltd.’s (ASX: SGM), stock fell 4.60% on August 10, 2018 after the group gained a lot of negative sentiments in the market given the recent developments in China and impact on its second half performance. On the other hand, SGM had recently enhanced its financial disclosure by providing greater financial transparency of the equity accounted results for SA Recycling LLC (“SAR”). The company’s 50% investment in SAR, which is held through one of the Company’s subsidiaries, was disaggregated from the historical North America Metals operating segment for market disclosure. Meanwhile, SGM stock has risen 2.85% in three months as on August 09, 2018 and is trading at a P/E of 15.66x. Based on the foregoing, we give an “Expensive” recommendation on the stock at the current price of $ 16.160.

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