Bravura Solutions Limited

Decent Financial Performance in FY18: Bravura Solutions Limited (ASX: BVS) had earlier reported the results for FY 2018 and the presentation had depicted that the company had witnessed client wins with respect to the important markets like New Zealand, Australia, United Kingdom as well as South Africa. The company’s revenues have been growing at a healthy pace from the past few years. Its revenues have witnessed the CAGR of 13.07% over the previous five years.


FY 2018 Key Highlights (Source: Company Reports)

The company also witnessed decent growth on the YoY basis with respect to the margins. Its EBITDA (or earnings before interest, tax, depreciation and amortization) margin was 18.2% which implies the rise of 1.2% YoY. The company’s net margin has also improved from 7.5% in FY 2017 to 12.2% in FY18, reflecting a rise of 4.7%. The company had also stated that it is having a robust balance sheet as it possesses net cash amounting to A$24.8 million which provides the company with the sufficient support to tap the growth prospects which might arise in the future.

Upgradations, Implementations to Support BVS Moving Forward: As depicted by Bravura’s FY 2018 results presentation, the company happens to be in the robust position to reap the benefits of the robust demand with respect to Australia, United Kingdom, South Africa as well as New Zealand.

The company had also stated that, in FY 2019, Funds Administration as well as Wealth Management are expected to witness favourable momentum. As depicted by the company’s FY 2018 results presentation, the company believes that the EPS might witness the rise in mid-teens in full-year 2019.

Stock Recommendation:  On the daily chart of Bravura Solutions, Relative Strength Index or RSI has been applied and default values have been used for the consideration. After careful observation, it was noticed that the 14-day RSI is trending towards the overbought region. Once it reaches there, the stock might witness a decline. Moreover, the company’s EV/EBITDA ratio on trailing twelve months basis stood at 18.1x while the technology industry happens to have an average EV/EBITDA multiple of 2.1x (on trailing twelve months basis) which reflects that the stock is overvalued.

Considering the above parameters, the market players need to closely watch the stock at the current market price of A$4.090 per share.
 

Bingo Industries Limited

Operating Footprints, Strong End Markets’ Exposure Supported BIN’s FY 2018: Bingo Industries Limited’s (ASX: BIN) stock climbed up 5.707% on January 08, 2019 after the announcement about the undertaking which it had given to ACCC. As per the announcement, the undertaking reflected that it would divest waste processing facility which happens to be in Banksmeadow. This was done so that the concern of ACCC with regards to Bingo’s Dial A Dump Industries acquisition can be taken care of. On the other hand, the company had witnessed the improvement in the net revenues in FY 2018 on the YoY basis because of its strong operating footprint with respect to the VIC as well as NSW. Additionally, the company’s presence in the strong end markets which is being supported by the favourable demographics, economic tailwinds as well as strong construction activity also helped the company’s net revenues in the YoY growth. In FY2018, the company’s EBITDA margin stood at 30.8%.


Key Metrics (Source: Company Reports)

Key Priorities of Bingo: The FY 2018 annual report of Bingo Industries reflected the company’s priorities. These priorities include safety, customer experience, resource recovery, growth and innovation as well as develop and retain talent. The top management of the company is having a favourable outlook for 2019 and the company had also stated that there happen to be numerous opportunities.

The company’s AGM presentation also reflects that, in FY 2019, the company is expected to witness a rise in the pro forma EBITDA between 15-20% before any positive impact with respect to Dial A Dump acquisition. This EBITDA growth is expected to be encountered in underlying business.

Stock Analysis: On the daily chart of Bingo Industries Limited, Moving Average Convergence Divergence or MACD has been applied and default values have been used. As per the observation, the MACD line has just crossed the signal line and it has started to trend upwards. However, it would be a bit early to decide the stock’s momentum.

Considering the above factor, the market players need to closely watch the stock at the current market price of A$1.945 per share.   
 

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