Aristocrat Leisure Limited
Launching in various markets in October 2018: Aristocrat Leisure Limited’s (ASX: ALL) stock rose 2.6% on October 10, 2018 after the company gave 2018 G2E investor presentation. The company has highlighted in the presentation that the acquisition of Plarium and Big Fish had significantly increased the scale of the company’s Digital business. The company continues to invest in premium video hardware and the expanding portfolio of Gaming operations into low, mid and high denomination segments. Lightning Link & Dragon Link are dominating the top performing lease games list and the company plans to release Dollar Storm in 2019. For Outright sale, ALL is on track to go live in Washington market in October 2018 and has strategic partnership with Tulalip tribe, Aristocrat sponsor. The company is also on track to launch in Manitoba market by mid-October 2018. Meanwhile, Dr. Ian Blackburne will retire as the Chairman of the company on 21 February 2019 and will be succeeded by current Non-Executive Director, Mr. Neil Chatfield. On the other hand, ALL stock is trading at the price of level $27.93, has resistance at $32.9 and support at $26.77. ALL stock has fallen 12.95% in three months as on October 09, 2018 and is still trading at a high P/E. Based on the foregoing, we have a Wait and Watch view on the stock at the current price of 27.930.
Webjet Limited
Cautious on oil price: Webjet Limited’s (ASX: WEB) stock has risen 6.31% in three months as on October 09, 2018, after the company reported robust FY 18 with 54% rise in Total Transaction Value to $3 billion, 54% rise in revenue to $291 million, 71% increase in EBITDA to $87.4 million and 30% growth in Net profit after tax (NPAT) to $43.2 million. During FY18, the company experienced strong organic bookings growth with all regions growing significantly faster than their underlying markets. The company had delivered strong growth in Europe, and is now the #2 player in MEA, and the Americas and Asia both grew significantly during FY 18. TTV margins expanded largely due to increased size in all regions, as well as more sales from higher margin direct contracts. Moreover, for FY 19, WEB has reiterated the bookings’ growth targets for both the B2C and B2B businesses, and expects bookings growth rate of more than 3 times the underlying market for B2C and more than 5 times the underlying market for B2B. However, oil prices are recovering after a further decline in Iran’s exports. Major oil traders are projecting the Brent crude oil price to be above US$100 a barrel in the near future due to OPEC and its allies are struggling to fill the gap caused by U.S. sanctions on Iran’s oil exports. Meanwhile, WEB stock is also trading at a high P/E. The stock is trading at the price level of $14.27, has resistance at $17.58 and support at $13. Based on the foregoing, we maintain a wait and watch stance on the stock at the current price.
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FY 18 Financial Performance (Source: Company Reports)
Cann Group Limited
Decent Outlook: Cann Group Ltd.’s (ASX: CAN) stock has fallen 9.84% in three months as on October 09, 2018 after the company reported 82.61% rise in net loss in FY 18. The stock is trading at the price of level $2.78, and has resistance at $3.21 and support at $2.66. However, by the end of FY 19, the company expects that the construction on the Phase 3 expansion facility will be well underway. The company also expects to maintain strong momentum, and is progressing with the development of a range of new dosage forms, suitable for patients in Australia and in overseas markets. CAN has already secured the export licence, and is working with the authorities to gain approval for the permits which will allow the company to start export sales. CAN plans to step up the engagement with the medical community to ensure medical professionals have the resources they require to make considered decisions on the suitability of medicinal cannabis treatment for their patients. Among the cannabis stocks listed on ASX, CAN has a decent footing and fundamentals. Based on the foregoing, we give a “Speculative Buy” recommendation on the stock at the current price of $ 2.780.
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FY 18 Financial Performance (Source: Company Reports)
Bapcor Limited
Strong Performance in FY 18: Bapcor Ltd.’s (ASX: BAP) stock has risen 6.81% in three months as on October 09, 2018 after the company for FY 18 reported 22% and 47.8% rise in the statutory revenue and net profit after tax respectively compared to FY17. Pro-forma net profit after tax from continuing operations increased by 31.6% in FY 18 on the back of the impact of the acquisition of Hellaby’s automotive businesses and good profit growth across all of Bapcor’s automotive business segments. Further, for FY 19, BAP is projecting continued revenue and profit growth in FY19. The company expects EBITDA of approximately $170M that is at a reasonable level, leading to an increase in NPAT of between 9% and 14% above FY18 proforma NPAT. Meanwhile, BAP stock is trading at a P/E of 21.74x, and has resistance at $7.65 and support at $6.55. Based on the foregoing and the run-up so far, we give a “Hold” recommendation on the stock at the current price of $ 7.300.
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