Growth Stocks for December

Carsales.Com Ltd

             CAR Dividend Details
 
Solid core business performance: Carsales.Com Ltd (ASX: CAR) reported a revenue growth of 32% year on year (yoy) to $311.8 million in fiscal year of 2015, boosted by its core online advertising market which rose by 6% yoy, as well as from the group’s new business initiatives. CAR continues to be among the most preferred online destination in buying as well as selling cars in Australia. Dealer revenues improved by 7% yoy to $112.9 million driven by improving dealer automotive enquiry volumes and growing demand of premium advertising products. Data, research and services revenues rose by 14% to $33 million on the back of ongoing growth of Livemarket and Livetrade products as well as Redbook Australia. Carsales.Com is expanding in international markets and invested in Stratton, tyresales and Auto Inspect which would start delivering in the coming fiscal years. The group also acquired SoloAutos in Mexico, iCar Asia, SK ENCARSALES.COM, and bought a stake in Webmotors, which would boost its international performance for thecoming periods.
 

Financial Performance (Source: Company Reports)
 
Meanwhile, the stock generated an increase of 8.90% in the last three months (as of December 04, 2015) and rose by 4.29% in the last four weeks. We believe that the stock has the potential to grow further in the coming months and accordingly give a “BUY” recommendation on this 3.2% dividend yield stock at the current price of  $10.62
 
 
CAR Daily Chart (Source: Thomson Reuters)
 

Yowie Group Ltd

               YOW Details
 
Targeting growth via roll out in Walmart: Yowie Group Ltd (ASX: YOW) recently signed a licensing agreement with Rovio Entertainment, the video game developer of Angry Birds franchise for the rights to manufacture and distribute Angry birds chocolate candy product in the US market. Yowie has licensing rights for the next three years till 2018. Meanwhile, Yowie has been selling its products in over 3700 Walmart stores and intends to expand its confectionery to over 4300 Walmart stores in the United States. With this move, the group could target greater than 320 million people in the US which would consequently boost the group’s volumes, wherein Yowie forecasts a volume in the range of 700 to 800 million units and projects greater than $2 billion value.
 

Yowie Geographic Focus (Source: Company Reports)
 
With regards to the core market highlights, Yowie has >30% volume market share via Ferrero’s Kinder Surprise and got over 36.2% value share in the Australian’s children’s confectionery market. The group is raising over $10 million equity capital to fund its growth opportunities like US rollout and national U.S. distribution and sales opportunities. Yowie stock generated an outstanding performance this year, and delivered over 103.67 %( as of December 04, 2015) during this year to date. We reiterate our “BUY” recommendation on this stock at the current price of  $1.10
 
 
YOW Daily Chart (Source: Thomson Reuters)
 

Nearmap Ltd

                  NEA Details
 
Customer win for Australia and solid US segment performance coupled with new patents to boost future growth: Nearmap Ltd (ASX: NEA) won two patent approvals for its new multi-directional oblique views, high-resolution digital elevation models - HyperCamera and HyperCamera 2 and intends to launch HyperaCamera2 in the first half of 2016 in the US market. The group is among ten major aerial imagery companies in the world. Meanwhile, NEA reaffirmed its revenue guidance in the range of $28 million to $32 million by end of December 2015 while expects a range of $30 million to $50 million in the US by December 2017. NEA has recently signed a contract with an annual value of $1.47 million with an existing customer for an extended usage for Australia.
 

Fiscal year of 2015 Australian performance (Source: Company Reports)
 
On the other hand, the shares of Nearmap fell over 44.70% during the year to date (as of December 04, 2015), as its profit before tax plunged 82% yoy to $0.6 million on the back of heavy US setup costs and tough market conditions. However, enhancing market penetration coupled with the new products launch would drive the stock performance in the coming periods. Based on the foregoing, we reiterate our “BUY” recommendation for the stock at the current levels of $0.39
 
 
NEA Daily Chart (Source: Thomson Reuters)
 

REA Group Ltd

                  REA Dividend Details
 
Targeting Asian opportunity: REA Group Ltd (ASX: REA) acquired iProperty Group which has solid presence in Malaysia, Hong Kong, Thailand and Indonesia. REA is targeting the booming Asian market wherein the focus on online advertising against offline advertising is growing. Meanwhile, REA continued to deliver strong core performance growth as well and accordingly delivered a revenue growth of 21% on a year over year basis to $146 million during first quarter of 2016. REA’s Australia site, realestate.com.au continued to be a dominant player across all devices wherein the site’s average monthly visits during the first quarter of 2016 improved by 33% year over year to 42.7 million while the consumers spent 257.3 million minutes a month on realestate.com.au’s main and mobile site. The site surpassed the average monthly time of the number two portal site by 5.5 times.
 
                   
                  REA’s market opportunity via IPP acquisition (Source: Company Reports)
 
Meanwhile, the shares of REA generated around 33.70% increase in the last six months and surged over 23.74% in the last three months (as of December 04, 2015). We remain bullish on the stock and reiterate our “BUY” recommendation at the current price of  $52.40
 
 
REA Daily Chart (Source: Thomson Reuters)
 

Fantastic Holdings Ltd

                   FAN Dividend Details
 
Delivered strong organic growth: Fantastic Holdings Ltd (ASX: FAN) shares surged over 34.26% (as of December 04, 2015) during this year to date boosted by its organic growth. FAN delivered 11% revenue increase during fiscal year of 2015, boosted by its like-for-like sales growth of 12.2% against a negative of 1.5% in fiscal year of 2014. The group offloaded its non performing Dare Gallery business with 10 stores during the fiscal year of 2015. Meanwhile, Fantastic Holdings reported a solid second half of the year performance, wherein comparative store sales performance rose 16.1%. FAN furniture’s L4L sales improved by 8.7% in FY15. Fantastic Holdings indicated good start to FY16 with year to date sales for July representing L4L growth of 12.8%. FAN is seeking to open new stores in Far North Queensland and maintaining its investments at its e-commerce platform to leverage the growing online opportunity.
 

Sales and Gross Margin Performance (Source: Company Reports)
 
The group undertook necessary changes to boost Le Cornu business which would deliver necessary returns during the year. We reiterate our “BUY” recommendation on the stock at the current price of  $2.30
 
 
FAN Daily Chart (Source: Thomson Reuters)

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