4 Stocks that you might want to have this Christmas - Crown Resorts, Aveo, Greencross and Eclipx

Crown Resorts Ltd

CWN Details
 
CrownBet’s agreements with Tabcorp:Crown Resorts Ltd (ASX: CWN) has informed that Tabcorp has entered into the agreements with CrownBet Pty Limited. This includes the settlement of CrownBet's opposition to the proposed combination of Tabcorp Holdings Limited and Tatts Group Limited in the Australian Competition Tribunal (ACT Settlement). As per the ACT settlement, CrownBet has agreed not to apply for judicial review of the Tribunal's decision on 22^nd November 2017 to grant authorisation for the combination. CrownBet has also agreed not to take any action that would delay the implementation of the combination. Moreover, as per NSW Settlement, CrownBet has agreed not to start any further court proceedings related to the subject matter of the NSW Supreme Court declaration it was previously seeking in relation to the legal status of the proposed arrangements with clubs in NSW. Additionally, Tabcorp has agreed a commercial arrangement with CrownBet for Supply of digital racing vision to CrownBet's customers (Vision Supply Agreement). Under this arrangement, CrownBet will make payments to Tabcorp, subject to an annual minimum amount. Meanwhile, CWN has been in discussion with parties about a possible merger of CrownBet, in a deal that bring consolidation in the booking industry. On performance front, challenges to the group look to fade a bit while the group expects to benefit from the rising number of travelers from Asia with support from a healthy portfolio. The group is also putting efforts to reduce opex to offset the softness in VIP business and managing gearing for partnership strategies. We give a “Buy” recommendation on the stock at the current price of $12.33



CWN Daily Chart (Source: Thomson Reuters)
 

Aveo Group

AOG Details
 
Sales rates to be normalized by 31 December:Aveo Group’s (ASX: AOG) sales rates have improved in September, and the company expects them to recover to normalised rates by 31 December and be maintained at that level through the second half of FY18. AOG is targeting the total volume of circa 500+ sales for H1 FY18, in which it is expected to be split approximately 40/60 across the first and second halves of FY18. Moreover, the sales rate of the Established Business is expected to be below the bottom end of the 10% - 12% range in FY18 but is expected to be offset by 110 Freedom conversion sales in addition to the 70 minor development sales.
 

FY 17 Financial Performance (Source: Company Reports)
 
Therefore, AOG is maintaining its FY18 profit guidance on the basis of these projected sales levels. AOG is expecting its FY18 earnings per share guidance of 20.4 cents per security, which is a 7.9% growth on FY17 and a full year distribution payout based on 40% - 60% of underlying profit in FY18. The stock has been impacted by some adverse media coverage, but the business model seems to be resilient. The trading scenario proffers a discount with good margin of safety. Meanwhile, AOG stock has risen 4.78% in last three months as on November 30, 2017 and is trading at a low P/E. We give a “Buy” recommendation on the stock at the current price of $2.63



AOG Daily Chart (Source: Thomson Reuters)
 

Greencross Limited

GXL Details
 
Expanding the footprint: Greencross Limited (ASX: GXL), a leading specialist retailer of pet food, pet related products and pet accessories, has a competitive advantage as it has many unique features which differentiate the company from both online and bricks and mortar competitors. There has been a lot of discussion relating to the potential impact of Amazon on the Australian retail landscape, however, GXL’s co-location strategy (having a veterinary clinic within the retail store) is something that seems to be benefiting the group. GXL’s sales of over 87% in the stores are made on the Group Loyalty card. The Loyalty program was relaunched in April 2017. Moreover, GXL has opened 5 stores, 4 in-store clinics and 4 grooming salons in FY 18 year to date. The group’s click and collect strategy is also working well. On the other hand, Chief Financial Officer, Warwick Thresher, will leave the company in the first half of CY 18. The search for a new Chief Financial Officer in partnership with Heidrick & Struggles is underway. Meanwhile, GXL stock has risen 10.67% in one month as on November 30, 2017. Seeing the growth rebound, we give a “Buy” recommendation on the stock at the current price of $5.82



GXL Daily Chart (Source: Thomson Reuters)
 

Eclipx Group Ltd

ECX Details
 
Positive Outlook for FY18: Post a strong FY17 performance backed by double digit gains in net operating income, Eclipx Group Ltd (ASX: ECX) expects FY18 NPATA growth in the range of 27% to 30% and EPS growth in the range of 10% to 12%. The diversification into horizontal and vertical adjacencies and strong asset growth in traditional fleet businesses is expected to continue in FY18. The integration of GraysOnline is on track, with the cost rationalization program substantially complete and a $1 million NPATA contribution to ECX for the period of Eclipx ownership (11 August 2017 to 30 September 2017). Further, the Right2Drive is delivering as expected, with over 33,000 hires in FY17 from 30 branches across Australia and New Zealand. On the other hand, ECX has priced its fourth Asset Backed Securities (ABS) issue, the Eclipx Turbo Series 2017-1 Trust; and the transaction has issued a total of A$351.5 million of bonds. Meanwhile, ECX stock has risen 13.48% in three months as on November 30, 2017. We give a “Speculative Buy” recommendation on the stock at the current price of $4.09



ECX Daily Chart (Source: Thomson Reuters)

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