BWX Ltd

BWX Details
 
Reaffirmed FY18 outlook:Consumer staples company, BWX Ltd (ASX: BWX) has completed the acquisition of Andalou Naturals, Inc, which is expected to have FY18 revenue contribution of US$41m and the pro forma forecast EBITDA of US$8.5m. BWX has projected the annualized cost synergies of US$1m, that is anticipated to be achieved by the end of the first full year of ownership. This acquisition is transformational for BWX US operations. Moreover, BWX has agreed to acquire Nourished Life for AU$20m. Overall, BWX is focusing on the integration and consolidation of the recently acquired businesses. The company has reaffirmed its FY18 outlook, and expects the FY18 EBITDA to exceed the 30.7% growth achieved in FY 17. Meanwhile, BWX stock has risen 30.47% in three months as on January 2, 2018 ad trades at higher level. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $7.53


BWX Daily Chart (Source: Thomson Reuters)
 

Class Ltd

CL1 Details
 
SMSF market share expected to increase: Despite having better than average industry return on equity, Class Ltd.’s (ASX: CL1) stock has fallen 19.36% in three months as on January 2, 2018 due to the Super Reforms and the industry experiencing 4% growth in FY17, which is lowest in five years. The industry got disrupted by time needed to assess and advise investors. CL1 was impacted in the June and September quarters, as many firms delayed the loading of funds or deferred their move to the cloud and then in September the company saw a return to historical rates of conversion. However, in the September quarter the company has posted 28% growth in the revenue due to a strong growth in the accounts administered on Class. Therefore, CL1 reported 39% increase in FY17 EBITDA and a 37% growth in the net profit after tax. The company’s EBITDA margin expanded from 45% to 48% due to the scalability of the business model.
 

Quarterly Growth (Source: Company Reports)
 
Moreover, the market share of SMSFs at the end of the September quarter has increased to 25%. CL1’s high retention rates and new account growth have contributed to the market share growth. Additionally, in FY18, CL1 will invest in Class Super to maintain market leadership and to further increase SMSF market share, despite a challenging environment. The company in FY18 is expected to deliver Class Portfolio to address the $3t in assets that investors hold outside super, and improve the engagement with financial planners, particularly, those working closely with accounting firms. Further, CL1 has planned to expand and better leverage the partner ecosystem, to increase revenue share from partner products, enhance customer value, and provide the broadest wealth accounting platform possible. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $2.77


CL1 Daily Chart (Source: Thomson Reuters)
 

MNF Group Ltd

MNF Details
 
Future Outlook: Telecom company, MNF Group Ltd (ASX: MNF) in FY18 expects to deliver good profit growth of about 24% over FY17. The earnings per share is expected to come in at 20.5 cents over FY18 which would represent growth of 18%. Moreover, the small business continues to drive aggressive product strategy lead by Virtual PBX product suite. In the fourth quarter of FY18, MNF plans re-launch of new fully “app” based products.
 

FY18 Outlook (Source: Company Reports)
 
In the third quarter of FY18, MNF plans launch of New Broadsoft initiative. The new domestic voice network is ready for launch in New Zealand during the third quarter. iBoss for UFB and other products are expected to follow in early FY19. Further, pending POP upgrade in NZ is planned for fourth quarter of FY18. New POP deployment in Australia is being planned for launch in FY19. Meanwhile, MNF stock has risen 22.57% in three months as on January 2, 2018 and is peaking to its 52-week high. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $6.79


MNF Daily Chart (Source: Thomson Reuters)

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