Folkestone Ltd

FLK Details
Joint venture with Furnished Property: Folkestone Ltd (ASX: FLK) has entered into a 50/50 joint venture with Furnished Property for developing 142 room hotel at Green Square, at Sydney. This is a strategic location which is over 100 metres from the Green Square Train Station and within the $13 billion, 278-hectare Green Square Urban Regeneration Area (‘GSURA’). Moreover, Folkestone has planned to launch the Folkestone Green Square Hotel Fund in March 2017, to raise circa $22.5 million of third party capital. The construction of the hotel is scheduled to start in early 2017 and the hotel is anticipated to open in late 2018. The group’s subsidiary, Folkestone Real Estate Manager Ltd recently announced for Folkestone Seniors Living Fund No. 1 closing oversubscribed. FLK stock has risen 11.63% in the last six months (as on January 10, 2017) and we give a “Speculative Buy” recommendation on the stock at the current price of – $ 0.96
 

FLK Daily Chart (Source: Thomson Reuters) 

Money3 Corp Ltd

MNY Details 
Expanding funding flexibility: Money3 Corp Ltd (ASX: MNY) recently stated that the group is equipped to comply with suggested changes through the Government’s statement on the final report of the review of the Small Amount Credit Contract (SACC) Laws. MNY further stated that SACC loans represent less than 12% of total loan book and there might be no change to MNY’s growth trajectory. MNY has drawn down an additional $10 million of funding under its existing debt facility, that has taken the total drawn down amount of this facility to $30m. This additional funding has been expected to lead to the ongoing growth in the secured automotive loan business.

 

Gross Loan Book (Source: Company Reports)
 
In FY16, MNY reported a 44.4% growth in the Net Profit after Tax to $20.1m, which has exceeded its prior profit guidance of $19m. The revenue grew by 40.0% to $96.7m. Moreover, MNY is expecting to achieve NPAT of $26m for FY17. MNY’s stock has risen 43.91% in the last six months as on January 10, 2017. The stock has a decent dividend yield. We give a “Hold” recommendation on the stock at the current price of – $ 1.66
 

MNY Daily Chart (Source: Thomson Reuters) 

Magellan Financial Group Ltd

 

MFG Details
Strong funds under management Performance: Magellan Financial Group Ltd (ASX: MFG) recently reported that its Funds under Management (FUM) reached $46,515 million in December 2016 against $44,865 million in November 2016. There has also been a rise in global and infrastructure equities. MFG earlier reported a solid growth of 14% in the profit after tax to $198.4 million in FY16 while fully diluted earnings per share (EPS) grew 13% to 115.5 cents as compared to the corresponding period FY 15. The revenue enhanced 17% to $333.8 million. This is due to the 27% increase in the Management fees to $258.4 million, and a 11% increase in the Performance fees to $48 million. Additionally, MFG in FY 16 has reported a solid 27% growth in the average funds under management to $39.4 billion. However, the employee expense has increased by 35% but this is in line with guidance. There is an expected occupancy expense of about $3.2 million for FY 17.

 

December Performance (Source: Company Reports)
 
Meanwhile, MFG stock has risen 15.6% in the last six months as at January 10, 2017. We give a “Buy” recommendation on the stock at the current price of – $ 24.56
 

MFG Daily Chart (Source: Thomson Reuters) 

Hunter Hall International Ltd

HHL Details
Undergoing management transitions: Hunter Hall International Ltd (ASX: HHL) is currently under transition and had appointed its Chief Financial Officer, Paula Ferrao, as an interim CEO. The group’s Deputy CIO, James McDonald, is an interim CIO. On the other side, Washington H. Soul Pattinson and Company Ltd (WHSP) had announced the proposal to acquire all of the outstanding HHL shares not already owned by WHSP for $1.00/share. Meanwhile, HHL has responded to the ASX query which was mostly related to the resignation of Peter Hall (CIO and CEO), selling of the shares and whether HHL is in compliance with the Listing Rules. HHL stock has fallen 38.11% in the last six months as on January 10, 2017 but is up 3.3% on January 11, 2017 at the back of recent updates and group’s confidence of its strategy. However, there remains some level of uncertainty in terms of performance. We maintain an “Expensive” recommendation on the stock at the current price of – $ 2.50
 

HHL Daily Chart (Source: Thomson Reuters) 

BT Investment Management Ltd

BTT Details
Tough conditions expected to prevail for UK business: BT Investment Management Ltd (ASX: BTT) reported a 12% increase in the statutory net profit after tax to $142.0 million in FY 16 while their cash net profit after tax (Cash NPAT) grew 18% to $156.0 million. Moreover, BTT’s funds under management grew by $5.6 billion to $84.0 billion in FY 16 and has experienced the net inflows of $4.4 billion. But, BTT stock is currently trading at a high P/E and close to its 52-week high price, and we believe that the tough conditions might prevail for their UK based JO Hambro business. We give an “Expensive” recommendation on the stock at the current price of – $ 10.89
 

BTT Daily Chart (Source: Thomson Reuters)

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