Dicker Data Limited

DDR Details
 
New Distributor Agreements: Dicker Data Limited (ASX: DDR), subsequent to the loss of the Cisco NZ business in August 17, is targeting new vendors and implementing structural cost saving measures in the NZ business. Therefore, despite the loss of Cisco in NZ, the company is still projecting revenue growth of 10% for the full year 2017 as per previous guidance. As a result, DDR stock has risen 18.25% in three months as on December 12, 2017. Moreover, DDR Australia is appointed as a distributor of Juniper Networks for the Australian market, effective December 2017. DDR is able to access the entire Juniper Networks’ product portfolios, which include networking, security, applications and software-defined products.
 

1H 17 Financial Performance (Source: Company Reports)
 
DDR is also appointment as a distributor of Hewlett Packard Enterprise in the New Zealand market, effective December 2017. Additionally, DDR is appointed as a distributor for four market leading brands in New Zealand, which are Kensington, QNAP, Storagecraft and Seagate. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $3.00


DDR Daily Chart (Source: Thomson Reuters)
 

Washington H Soul Pattinson & Company Limited

SOL Details
 
Impact from regulatory uncertainty and poor policy: Washington H Soul Pattinson & Company Limited’s (ASX: SOL) stock has fallen 8.21% in three months as on December 12, 2017 as SOL’s portfolio has a number of businesses that are impacted by regulatory uncertainty and poor policy. In fact, many Australian companies are facing difficult regulatory environment, which is making SOL’s businesses globally uncompetitive. Further, SOL is facing increased cost of doing business due to the energy crisis in Australia. In FY 18, Brickworks expects the energy cost will rise by $20 million and TPG has indicated that it will pay an extra $7 million. Additionally, New Hope is working with Queensland government to secure approvals to continue to mine at New Acland. This process of securing approval is going-on for 10 years.
 

Portfolio Value as at 30 November 2017 (Source: Company Reports)
 
On the other hand, the group has delivered dividends at a cumulative annual growth rate of 9.4% per year over the last 15 years. Based on the shortcomings while SOL is a good dividend payer, we give an “Expensive” recommendation on the stock at the current price of $17.07


SOL Daily Chart (Source: Thomson Reuters)
 

Money3 Corporation Limited

MNY Details
 
New debt facility: National Credit provider, Money3 Corporation Limited (ASX: MNY) has secured a $150m debt facility in 3 tranches of $50m which will consolidate all existing debt and provide an additional $70m of funding over existing facilities. The fund will be used for the growth of its secured automotive receivables. The debt facility has single digit interest rate with 3-year term, extendable up to 5 years and repayable after 2.5 years without penalty. Further, when the facility is fully drawn, the receivables greater than the required security coverage can be used to source further external funding through securitization, if required. Moreover, the first tranche will replace the existing $50m facility (at a reduced effective interest rate). The second tranche will pay out the existing bonds when they mature in May 2018 ($30m) and will provide a further $20m of funding. The third tranche ($50m) will be available to grow secured automotive receivables if required. The group has performed well in FY17 with 13.4% growth in total revenue and NPAT growth of 44.5%. Meanwhile, MNY stock has risen 13.89% in three months as on December 12, 2017 and we give a “Hold” recommendation on the stock at the current price of $1.635


MNY Daily Chart (Source: Thomson Reuters)

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