AusCann Group Holdings Ltd (ASX: AC8)

Surging on advantage in a growing market: Shares of AusCann rallied about 18% on November 22, 2017 as DayaCann, AC8’s 50:50 joint venture in Chile, had bagged its second cultivation licence to allow the JV to immediately commence cultivation activities in Chile. It is worth noting that the license is the only licence granted in Chile for cultivating medical cannabis. The duo had earlier updated the market about the successful harvest of the first crop in Chile of over 400kg. We give a “Hold” on the stock that has witnessed a run-up of 236% this year to date (as at November 21, 2017) and has potential for further growth, at the current price of $0.875
 

Mineral Resources Ltd (ASX: MIN)

Cost management: Mineral Resources’ stock surged 12.5% on November 22, 2017; and during Managing Director’s Presentation, the group touched upon the 24% growth in FY17 reporting revenue to $1.46 billion with NPAT of $201 million rising 83%. Further, the group added 30Mtpa new contract crushing tonnes during the year. MIN also expects a 15% saving in total material movement costs based on key initiatives and has been granted an exclusive worldwide IP license to use Hazer process for graphite production. MIN also aims to maintain its FY18 EBITDA of at least $500 million. The stock has been peaking close to its 52-week high price and looks “Overvalued” at the current price of $18.99
 

Sonic Healthcare Ltd (ASX: SHL)

Decent outlook reaffirmed: Sonic Healthcare provided its CEO’s address during the AGM and reported that the underlying EBITDA growth for FY17 was 5.3% while revenue growth was 5.8% to A$5.3 billion with net profit growth of 4.4% at the back of performance from laboratory and imaging divisions. However, foreign currency and non-recurring items in FY 2016 had impacted the statutory financials while cash generation from operations was up 4% on previous corresponding period. The group is benefitting from organic growth coupled with accretive acquisitions. However, the interest expenses are said to increase by 10-15% on constant currency basis in FY18 while an underlying EBITDA growth of 6-8% is expected. The group has been maintaining a steady dividend growth over the years. Despite a decent result and outlook, the stock still looks “Expensive” at the current price of $21.61


Full-year Dividends (Source: Company Reports)
 

NextDC Ltd (ASX: NXT)

Tracking on growth: NextDC has been delivering strong growth across key metrics through from FY17, and demonstrated a 33% increase in revenue with 77% increase in EBITDA and doubling of operating cashflow.  The group’s contracted utilisation surged by 5.4MW to over 30MW. NXT now expects FY18 revenues to be up 18% to 25% from $123.6 million achieved in FY17 and sit within the range of $146 million to $154 million. This has been said to be driven by existing contracted utilisation levels and new customer contracts in FY18 while there may be some operating cost increases related to three new data centres and rising energy prices. EBITDA is also expected to jump up between 14% and 25%. With the AGM update, the stock soared by 2.2% on November 22, 2017. Given the prospects, we maintain a “Hold” at the current price of $5.53
 

Mantra Group Ltd (ASX: MTR)

Acquisition update: Mantra Group’s shares ended flat with the release of the chairman’s address during AGM. The group had a decent FY17 with the business performing strongly in all operating segments, and the group could deliver a final fully franked dividend of 6 cents per share bringing the total fully franked dividend for FY17 to 11 cents per share. The growth of portfolio with 6 new properties along with Mantra Sydney Airport Hotel, FV by Peppers in Brisbane and Mantra MacArthur Hotel, Canberra, seems to be on track. With regards to the proposed acquisition of the group by AccorHotels, ACCC intends to undertake a public review process as part of its consideration of the transaction and updates on regulatory conditions will be provided soon. We maintain a “Hold” on the stock at the current price of $3.90, and await further information.
 

Class Ltd (ASX: CL1)

Positive performance: The cloud-based software group, Class Ltd.’s stock rallied about 4.8% on November 22, 2017 post the Investor Day Update. During 30 September 2017 and 20 November 2017, the group witnessed growth in Class Super by additional 3,321 accounts, while the portfolio grew by an additional 243 accounts yielding 3,874 portfolios. There was over 35% uplift in new accounts in October over prior corresponding period. The growth in Class customers and net new accounts have supported the quarterly performance. Going forward, the group aims to build more capability given the complex nature of the industry. With forward price to earnings level and 18% fall in last three months (as at November 21, 2017), we give a “Hold” at the current price of $2.62,
 

Account and Customer Growth (Source: Company Reports)

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