Domino’s Pizza Enterprises Limited (ASX:DMP)

Negative Sentiments- Domino’s Pizza Enterprises Limited is engaged in the operation of retail food outlets and the operation of franchise services with master franchise rights and network spread across Australia, New Zealand, France, Belgium, the Netherlands and the Principality of Monaco.The Company recently issued 274 fully paid ordinary shares at an issue price of $51.97 each for 274 shares under the terms of the Domino's Pizza Enterprises Limited Employee Share Acquisition Plan. The Company focuses on same-store sales growth (SSS) as it was noted that in ANZ, SSS Growth was just 3.7 per cent in 1HFY18 and whereas in the first five weeks of 2HFY18, it was just 5.9 per cent and this disappointed the market which led the share price slip. Further, DMP is considered to have good technology platform while its efforts across other geographies like Europe are on track. European network sales increased €33.4m to €298.0m for H1 while Japan sales increased ¥289.3 million to ¥21,037.9 million. In Germany, the acquisition of Hallo Pizza is said to be on track while DMP has flagged its conversion target of 130 stores with 115 Hallo Franchise stores already signing up. However, the stock has witnessed its short interest rise recently. Till afternoon trading as on 5 July 2018, Domino’s stock had already exceeded its recent daily average trading volume. The Company’s Debt percentage in its total capital employed increased from 41.8 per cent as on 31 July 2017 to 55.3 per cent as on 31 December 2017. The stock was down by 9.13 per cent on 5 July 2018 due to the negative sentiments in the market with concerns mounting on the performance in Japan. The stock can be avoided as of now at the current market price of $48.92.


Network Sales Growth (Source: Company Reports)
 

Bellamy’s Australia Limited (ASX:BAL)

Risk from the Chinese markets- Bellamy's Australia Limited is an Australia-based producer, supplier and marketer of organic baby food and formula and offers a range of organic food and formula products for babies and toddlers. Lately, Norges Bank became the substantial holder of the Group since 3 July 2018 by holding 5.60 per cent of the voting power.  There was a speculation in the market that the Company can face unexpected delays in getting the Chinese product registration approval to sell Chinese labelled product in Australia. The China market is very unpredictable and risky given the rules of law. On the financial front, the group recorded revenue CAGR of 62.9 per cent over the period of 1HFY14-18 at the back of volume and value growth. The company had upgraded FY18 revenue growth to 30-35 per cent (from 15-20 per cent) and FY18 EBITDA margin to 20-23 per cent (from 17-20 per cent), excluding Camperdown.However, the group’s turnaround remained on track and the underlying health of the business continued to strengthen its position in the market. The stock was down by 9.625 per cent as on 05 July 2018. The stock is also trading at a very high P/E. The stock is moving downward since past three months (by 33.38 per cent as on 4 July 2018). One can avoid the stock at the current market price of $12.77 after looking at the issues prevailing in the Chinese market.


Cash flow position Trend (Source: Company Reports)
 

Cleanaway Waste Management Limited (ASX:CWY)

Trading at higher level - Cleanaway Waste Management Limited, formerly Transpacific Industries Group Ltd., is a waste management company and the Company's segments include Solids and Liquids & Industrial Services. Recently, the Company completed the acquisition of Tox Free Solutions Limited and this acquisition was a significant step towards strengthening and balancing its integrated waste management services across Australia. As Australia’s leading waste management company, Cleanaway has built a complete asset base and services portfolio. Till now 80 per cent of the Company’s revenues were contracted and customer churn has been a key driver of performance. Though the Company has a limited exposure to the change in the recycling markets, it is expected that the Company’s FY18 earnings will be line with current market expectations. In the meanwhile, Marathon Asset Management LLP changed its substantial holding from 6.02 per cent to 5.92 per cent since 31 May 2018.  ROE decreased from 2.5 per cent as on 30 June 2017 to 2.1 per cent as on 31 December 2017. The stock was rising since 5 years (up by 117.29 per cent as on 29 June 2018) but started falling since one month (down by 1.19 per cent as on 4 July 2018). The stock recovered by 2.40 per cent as on 5 July 2018. The stock is trading close to its 52 week high price that is $1.75. So, the stock looks “Expensive” at the current market price of $1.705.


Financial Performance Highlight (Source: Company Reports)
 

AusCann Group Holdings Limited (ASX:AC8)

Raised A$33.4 million via a share placement: Cannabis group, AusCann Group Holdings Limited (ASX:AC8) has completed the capital raising of A$33.4 million via a share placement that was made open to institutional and sophisticated investors from North America and Australia. With this news, the stock plunged by about 7% on July 05, 2018. The company aims to direct the proceeds towards cannabinoid pharmaceutical research and clinical studies along with expansion efforts in Chile and Australia. Further, AC8 aims to conduct medical outreach programs in new international markets, and a portion of the proceeds will be used for this purpose. The key aspect to note is that the placement allowed participating investors to receive 1 option for every 2 shares subscribed and exercisable at A$1.465, and this is a 33% premium to the Placement issue price. On the other hand, the group has been taking steps to expedite its Canadian Engagements and the boost from the new legislation passed in Canada may play a role in favour of the stock. We maintain a “Hold” on the stock at the current price of $ 1.190.
 

Cynata Therapeutics Ltd (ASX: CYP)

Moving ahead with key Partnerships: Stem cell and regenerative medicine company,  Cynata Therapeutics Ltd (ASX: CYP) has bagged a development partnership with Royal College of Surgeons in Ireland. This would entail therapeutic potential of Cynata’s Cymerus™ mesenchymal stem cells (MSCs) to treat sepsis under the RCSI Strategic Industry Partnership Seed Fund. Further, Cynata’s portfolio of target indications and potential commercial opportunities for its Cymerus MSCs will find support from the partnership. CYP’s technology is based on low cost methodology to provide stem cells that can be used against many diseases. The group also obtained an Orphan Drug Designation by the US FDA for its product, CYP-001, which has delivered encouraging trial data from its Phase 1 clinical trial. Cynata has now selected cardiovascular disease as a high-priority target area. We maintain a “Hold” on the stock at the current price of $ 1.390, given the year to date run up of 132% and other developments as planned.


Cymerus licensing model (Source: Company Reports)

 
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