Osprey Medical Inc.

OSP Details

Osprey Medical Inc. (ASX: OSP) is focused on protecting patients from the harmful effects of X-ray dye used during angiographic imaging procedures. It is committed to making angiography safer for patients suffering from Chronic Kidney Disease (CKD), improving clinical outcomes, and reducing adverse economic impact.

Result Performance (H1FY21 Ended 30 June 2021)

• Revenue stood at $1.07 million, up 33% on prior corresponding period (pcp) on the back of increased DyeVert units sold which on normalized basis was ~44% up to pcp.
• Operating cost reduction strategy to mitigate the impact of the pandemic leads to 10.1% YoY decline in operating costs which in turn leads to an overall 12.7% YoY decline in operating loss to $6.5 million.
• Loss after tax for the period stood at $5.18 million, a decline of 30.3% on pcp.

Key Data (Source: Company Reports)

Recent Update:

• On 12 August 2021, the company announced the appointment of Martin Emerson to its Board of Directors. He has 35 years of experience in the healthcare field and a track record of successes in market development, geographic expansion and existing market growth.

Outlook:

As per the reports, the company witnessed repeat sales in US through its Independent Sales Agency (ISA) partners. However, outside the US, recovery from the pandemic has been slower in Europe and the ANZ regions. Despite this, a consistent demand from GE Healthcare augurs well for the company.

Key Risks:

The company’s operations have been affected due to the disruption brought in by the  COVID-19, and the uncertainty in the trading environment still persists with the rise in cases of Delta variant being reported in the various parts of the world.

Technical Overview:

Chart:

Source: REFINITIV

Note: Purple Color Line Reflects RSI (14-Period)

Stock Recommendation:

The stock of the company declined by ~35.29% in 1 month. It has made a 52-week low and high of $0.011 and $0.033, respectively. Notably, the joining of Steven Brandit to the Board will help further strengthen the company’s international expansion and commercialization strategy.

Considering the current trading levels, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.011 per share, down by ~8.334% as on 25^th August 2021. 

HUB24 Limited

HUB Details

HUB24 Limited (ASX: HUB) is a financial services company that provides wealth management superannuation investment platform, technology and data solutions to the Australian market.  

Result Performance (FY21 Ended 30 June 2021)

• The company for full-year FY21 reported an increase in revenue of 34% YoY to $110.9 million on the back of 36% YoY increase in platform revenue to $101.1 million. Underlying EBITDA for the year increased by 47% YoY to $36.2 million whereas underlying PAT rose by 53% YoY to $15 million. Statutory NPAT for the year stood at $9.8 million, up 18.7% YoY.
• Total Funds Under Administration (FUA) stood at $58.6 billion, an increase of 237% on previous year.
• The Board of Directors declared final fully franked dividend of 5.5 cps, taking the full year dividend to 10 cps, an increase of 43% on previous year. The payment date is on 15 October 2021.

Income Statement (Source: Company Reports)

Outlook:

Over the years, the company has strengthened its financial position, operating profitably with a strong balance sheet, and generating strong operating cash flows, despite the  ongoing impact  of the pandemic. Its cash reserves are significantly above regulatory capital requirements. As per the reports, the company is well-placed to pursue further growth opportunities as the leading provider of integrated wealth platform, technology and data solutions.

Key Risks:

The company is susceptible to certain risks such as credit risk; liquidity risk; market risk; interest rate risk; foreign exchange risk; capital management risk; etc.

Valuation Methodology: Price to Book Value Multiple Based Relative Valuation (illustrative)

Stock Recommendation:

The stock rose by ~17% in 3 months and ~30.6% in 6 months. The stock has been valued using Price/BV multiple-based illustrative relative valuation and the target price reflects a decline of low double-digit (in % terms). A slight discount to Price/BV Multiple (NTM) (Peer Average) has been applied considering the risks related to the business as well as rise in expenses in FY 2021 on the YoY basis.

For the purposes of relative valuation, we have taken peers such as Pinnacle Investment Management Group Ltd. (ASX: PNI), Mainstream Group Holdings Ltd (ASX: MAI), Perpetual Ltd. (ASX: PPT), to name a few. 

The stock of the company is trading towards the 52-week higher levels. Thus, we advise the market players to liquidate the stock.

Considering the aforesaid facts as well as valuation, we give a “Sell” recommendation on the stock at the current market price of $30.860 per share (Australian Time: 2:00 PM (GMT+10)) on 25^th August 2021.

Technical Chart:

Source: REFINITIV, Purple Color Line Reflects RSI (14-Period)

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined:-

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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