Countplus Ltd


CUP Details

Strategic business divestments: Countplus Ltd (ASX: CUP) issued a soft guidance and estimates its full year operating results to be around 20% lower for the fiscal year of 2016 than last year impacted by higher provisioning charges and an impairment of the smaller accounting businesses. Consequently, the stock fell over 27.13% in the last six months (as at May 25, 2016). On the other hand, the group isrestructuring their business from the past three years and made a series of investments in the last six months in Hunter Financial, Australian Superannuation & Compliance (“ASC”), HWC Accountants and Cummings West.
 

Group Performance (Source: Company Reports)
 
The company is also expecting further strategic business divestments at the end of this financial year. The company has indicated for impact on earnings and EPS in the short term. There has been a recent selling by one shareholder which the company expects to be exhausted shortly. However, the company aims to reinvest proceeds of the strategic business divestments expected at the end of the financial year, in new investments. CUP has an attractive P/E with a strong dividend yield and has surged 14.17% in the last one month (as at May 25, 2016). The company nonetheless expects its full year net profit after tax and EPS not to be materially different from last year though not marginally higher. We issue a “Speculative buy” recommendation on the stock at the current price of $0.70

 
CUP Daily Chart (Source: Thomson Reuters)
 
Sunland Group Ltd


SDG Details

Enhancing business via acquisitions: Sunland Group Ltd (ASX: SDG) recently acquired Prime Beachside Greenmount resort in Coolangatta for $26 million which is a three star resort hotel having 151 rooms. Earlier in January 2016, SDG even acquired a prime 6.053 hectare development site in Ingleside in Sydney’s Northern Beaches for $7.25 million (plus GST). This transaction is Sunland’s third residential site acquisition in Sydney’s prestigious Northern Beaches and has increased the Group’s Sydney portfolio to more than 420 dwellings with an estimated end value of $408 million. The company had 6,000 residential housing, urban development and multi-storey products along Australia’s eastern seaboard with an estimated end value of $3.8 billion. With the acquisition of Northern Beaches and Greenmount resort, the portfolio has increased considerably. The stock has corrected 3.88% in the last three months (as at May 25, 2016). Sunland has also been recently notified by the Australian Securities &Investments Commission (ASIC) that the Commission has completed its investigation into certain statements made by SDG in ASX disclosures on 20 February, 02 March and 21 July 2009 and has decided not to take any further action. The Supreme Court of Queensland has delivered a favorable ruling for SDG in the Marcus Lee vs Sunland and others’ matter. Trading at an attractive P/E with a good dividend yield, we give a “Speculative buy” recommendation on the stock at the current price of $1.46
 

SDG Daily Chart (Source: Thomson Reuters)
 
Far Limited


FAR Details

Focusing on Potential Oil Wells: FAR Limited (ASX: FAR) has safely drilled and logged the SNE-4 appraisal well ahead of the schedule, and recently also successfully completed the two SNE field appraisal wells, SNE-2, SNE-3 which have oil that is expected to be commercially available after drilling and have huge potential. ConocoPhillips and Cairn Energy would bear all the expenses of drilling. The positive results from SNE-4 has confirmed the scale and extent of SNE field resource.
 

Oil Contingent resources (Source: Company Reports)
 
The company has agreements covering wells set to be drilled early next year in Kenya. The group maintained its cash at $31.7 million as of March 2016. FAR recovered over 22.54% in the last six months (as at May 25, 2016) and we recommend a “Speculative buy” on the stock at the current price of $0.086
 

FAR Daily Chart (Source: Thomson Reuters)

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