Technology One Limited

Resolution of Dispute: Technology One Limited (ASX: TNE), the consultant of enterprise software in Australia, New Zealand, Malaysia and the UK, and Brisbane City Council (Council) have resolved their dispute over the Council's LGS Program. The company has kept the terms of the settlement confidential. On the other hand, in FY18, TNE expects the profit from Cloud to be $5 million compared to $2.5 million in FY17. The Consulting in FY18 is expected to return to strong profit growth. Meanwhile, TNE stock is not cheap even with the recent pull-back due to sluggish FY17 and trades on an FY18 PE ratio touching 35x. We give an “Expensive” recommendation on the stock at the current price of $4.94, and will review it at a later date for any potential buying opportunity.
 

Appen Limited

Acquired Leapforce: IT Services company, Appen Limited (ASX: APX) has completed its acquisition of Leapforce Inc. and RaterLabs Inc (together Leapforce) for US$80.0 million. Further, to partially fund this acquisition, APX has successfully completed a $25m institutional placement in November 2017 and has entered into a Syndicated Facility Agreement and working capital facility for a total aggregate amount of $72.6m. Moreover, the eligible shareholders had applied in a share purchase plan for up to $15,000 of new APX shares. Leapforce is expected to add significant scale to APX’s Content Relevance division with strong organic growth opportunities. Meanwhile, APX stock has risen 51.09% in three months as on January 09, 2018 and is trading at a very high level. The stock looks “Expensive” at the current price of $8.46

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