Stocks’ Details

OneVue Holdings Limited

A Look at 1HFY19 Results: OneVue Holdings Limited (ASX: OVH) had stated that, in 1H FY 2019, sharpened focus towards continuing businesses of Fund Services as well as Platform Services supported the growth of more than 31% in the revenues. For the half-year ended December 31, 2018, the company posted total revenues amounting to $29.45 million reflecting the rise of 25% on the YoY basis. The company added that the quality recurring revenues have made 91% of the revenues. With respect to Fund Services, the company stated that the business was supported by the continuation of contracted transitions, securing of the new clients as well as integrating the KPMG Super acquisition.


Review of Operations (Source: Company Reports)

The revenues for the Fund Services has witnessed the rise of $5.1 million or 45% as compared to the prior corresponding period with the robust growth from Managed Fund Administration as well as Super Member Administration which was offset by exited RE business.

What To Expect From OVH: OneVueHoldings Limited had stated that they are focusing towards strong growth runways in the Fund Services as well as Platform Services. Also, the company possesses a robust pipeline of new business opportunities. Also, the company is looking forward to the growth opportunities in both Platform Services as well as Fund Services.

Stock Recommendation: On the daily chart of OVH, Moving Average Convergence Divergence or MACD has been applied and default values were used for the purposes. After observation, it was noted that the MACD line has crossed the signal line and had moved in the downward direction after crossover hinting bearishness.

However, the company’s stock is trading towards the lower levels which might be a decent entry point considering the robust growth of revenues which was witnessed in 1H FY 2019. Also, the company is having a strong pipeline of new business opportunities.

Based on the above factors and current trading level, we maintain our “Speculative Buy” recommendation on the stock at the current market price of A$0.535 per share (down 4.464% on 26 February 2019).
 

Paragon Care Limited

FY 2018 had been Termed as Transformational Year: In FY 2018,Paragon Care Limited (ASX: PGC) had posted NPAT amounting to $10.9 million while the pro forma FY 2018 NPAT stood at $18.7 million. The company’s FY 2018 EPS stood at 5.4 cps which demonstrates the acquisitions as well as recent capital raising timing in 2H of the financial year. 

  
FY 2018 Results Summary (Source: Company Reports)

The company had earlier announced the acquisition of Total Communications which happens to be in line with PGC’s strategy to focus towards high-technology opportunities, yielding recurring revenue streams.

What to Expect From PGC: In FY 2019, there are expectations that the continuing business would be generating the revenues amounting to around $240 million while the EBITDA is expected to be $28 million. The company would soon announce its financial information for 1H FY 2019, there are expectations that the company would be reporting revenues of $119 million from continuing business while $11 million from discontinued business & non-recurring costs. In the same period, PGC is expected to post EBITDA amounting to $14 million from continuing business.

Stock Recommendation: On the daily chart of PGC, Relative Strength Index or RSI has been applied and default values were used for the purposes. After careful observation, it was noticed that 14-day RSI had earlier reached the oversold level. However, it has now started to rebound from the oversold levels. Therefore, there are expectations that the company’s stock price might witness a rise moving forward.

However, the company’s stock has delivered the return of -41.25% in the time span of the previous 6 months and trading at close to 52-week low level with reasonable PE multiple of 8.70x.

Based on aforesaid facts and the upcoming 1HFY19 earnings release which will be published soon, we maintain our “Speculative Buy” rating on the stock at the current market price of A$0.470 per share.
 

Wattle Health Australia Limited

Wattle Health to Acquire B&P: Recently, Wattle Health Australia (ASX: WHA) had announced that it has entered into conditional agreement to purchase the additional 46% of the shares in CNCA accredited dairy products processing and packaging facility, Blend and Pack Pty Ltd, for the consideration of $46 million. The acquisition is expected to be financed by way of a debt issue to be managed by the international capital advisory firm, Exotix Capital. After the completion of the acquisition, Wattle Health Australia would be having total assets amounting to approximately $165 million.


Net Cash Used in Operating Activities (Source: Company Reports)

WHA had earlier posted key information about the Q2 FY 2019 and, in the quarter ended December 2018, the company’s net cash used in operating activities amounted to A$5,205,616.

What to Expect From WHA: There are expectations that Wattle Health Australia would be witnessing robust growth of sales for remainder 2019 calendar year with launch of Uganic as well as continued growth of distribution of the company’s Australian natural baby food and Little Innoscents. The company stated that it is possessing robust balance sheet. We expect that WHA would also be aided by strong position of its balance sheet.

Stock Recommendation: On the daily chart of WHA, Exponential Moving Average or EMA has been applied and default values were used for the purposes. After observation, it was noticed that the company’s stock price had crossed the EMA and had moved in the downward direction which reflects the bearishness.

However, the company’s stock price is trading towards the lower levels and it can be considered a decent entry point considering the expectations of strong growth of the sales (as mentioned above) as well as strong balance sheet. Hence, we maintain our “Speculative Buy” rating on the stock at the current market price of A$0.885 per share (down 1.117% on 26 February 2019).


Stock Price Comparative Chart (Source: Thomson Reuters)   

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