Aristocrat Leisure
Aristocrat Licenses allow hitting TV Show "Billions": Aristocrat Leisure Ltd (ASX: ALL) for FY 18 to 30 September 2018, had expected to continue with double-digit NPATA growth. On the other hand, as per the licensing agreement between Aristocrat, CBS Consumer Products, and Showtime Networks, the hit SHOWTIME TV show Billions will soon be available in the casinos. Further, ALL’s new Billions Slot Game will be premiered at the upcoming Global Gaming Expo (G2E) in Las Vegas. Meanwhile, the company is still expected to grow their earnings by a CAGR of 24% over the next three years, and ALL stock has fallen 7.26% in three months as on September 20, 2018. However, the stock is trading at a high P/E and technical indications reflect a potential buying opportunity post some correction. The stock is trading at the price of level $28.28, and has resistance at $33 and support at $27.8. As of now, we give an “Expensive” recommendation on the stock at the current price of $28.28.
Kathmandu Holdings
Enhancing the international growth through acquisition of Ob?z: Kathmandu Holdings Ltd (ASX: KMD) in FY 18, KMD had acquired Ob?z, which is a premium US based outdoor footwear brand. This strategic acquisition is expected to enhance the international growth and transform the company from an Australian retailer to a global outdoor apparel and equipment brand. Meanwhile, the company for FY 18 delivered robust performance with 32.9% rise in NPAT to record NZ$50.5m. This is on the back of 30.9% increase in EBIT to NZ$74.6m and 11.7% growth in Sales to NZ$497.4m. The company reported 9.6% growth in sales in Australia, which is the company’s largest market. The company is upgrading the online platform in the second half of FY18, which is due to be completed in November. KMD has enhanced its gross margin by 1.4% points to 63.4% in FY 18, which is above the long-term target range of 61% to 63%. Moreover, in 2018 KMD has generated record operating cash flow of NZ$75.6m, and had invested NZ$16.7m in capital projects, mainly for the expansion and updating the store network. As a result, KMD stock has risen 28.70% in three months as on September 20, 2018 and is also trading at a reasonable P/E of 13.48x. The stock is trading at the price of level $2.96, has resistance at $3.03 and support at $2.53. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $2.96.
.png)
FY 18 Financial Performance (Source: Company Reports)
Collins Foods
Strategic Steps & Strong FY 18 Performance: Collins Foods Ltd.’s (ASX: CKF) stock has risen 4.50% in three months as on September 20, 2018 after the company expanded into attractive growth markets with the completion of acquisition of KFC in Australia and Europe in FY 18. Meanwhile, CKF for FY 18 has reported 21.7% growth in the Group revenue to $770.9 million and 16.4% growth in underlying EBITDA to $94.5 million. This is on the back of vigilant cost control and a continuous focus on the improvement of the operational efficiency. During FY 18, CKF undertook the strategic decision to launch the Taco Bell brand in Australia, to provide further growth channel. The company exited the Snag Stand business after a strategic review in FY 18. Based on the foregoing, we give a “Buy” recommendation on the stock at the current price of $ 5.950, up 2.6% on September 21, 2018.
Domino's Pizza Enterprises
Responds to FWO investigation: Domino's Pizza Enterprises Ltd. (ASX: DMP) has fallen 4.84% in three months as on September 20, 2018 after the company has been noted to address issues related with approximately $2000 of underpayment of wages for 20 team members across 19 stores. One franchisee with two stores was found responsible for over $1,500 of the underpayment. This is on an 18-month investigation by the Fair Work Ombudsman (FWO) into 33 of its stores across Sydney, Melbourne, Brisbane and Adelaide. Further, it was found that only four Domino's Pizza stores "fully complied" with workplace laws. Therefore, the company had to make correct payments to almost 97% of employees during the audit period. In DMP’s corporate stores, the FWO found issues in three of the five stores investigated, which were related to paperwork for sick leave and inaccurate time records. Meanwhile, DMP for FY 18 has missed the estimates for annual underlying profit on the back of weaker same-store sales in Europe, Australia and New Zealand. For FY 18, the company has reported underlying net profit after tax of A$133.2 million ($96.84 million), which is below market estimates of A$136.6 million. The company has also missed company forecasts of a 20 percent rise. For the full year 2018, the same-store sales growth in Australia and New Zealand fell to 4.5 percent, which is below the firm’s recently lowered guidance of 7-9 percent growth. Additionally, for FY 19, DMP expects same-store sales growth for the group to be in the range of 3% and 6% and this expected to remain between the same range for the next three to five years. 2019 capital expenditure is expected to be between A$60 million to A$70 million and DMP expects to build between 225 and 250 stores for the FY 19. In addition, during the first 5 weeks of FY 19, Group same store sales were +4.4%. On the other hand, DMP stock is trading at a high P/E of 36.23x. The stock is trading at the price of level $50.66, has resistance at $57.8 and support at $48.9. Based on the foregoing, we give an “Expensive” recommendation on the stock at the current price of $ 50.66.
Disclaimer
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.