Capitol Health Ltd

CAJ Details 
· Expecting a better second half of FY17 performance: Capitol Health Ltd (ASX: CAJ) stock rallied over 13% on December 20, 2016 as the group commented about expecting a better second half of FY17. Management reported that Federal Government’s bulk-billing incentive program changes for diagnostic imaging providers would be deferred till 1 July 2017 to allow for further consultation. The group already forecasted this funding pressure from the government by contemplating a 5-7% negative impact on their revenues for fiscal year of 2017. Given the uncertainty in government funding related changes and weak revenue forecasts, CAJ stock already fell about 57.4% this year to date (as of December 19, 2016). On the other hand, Capitol Health is now forecasting a better second half of FY17 revenue performance.

· Recommendation: CAJ stock surged over 4.5% in the last five days (as of December 19, 2016) and we believe this momentum to continue in the coming months. The stock is trading at a decent dividend yield. We give a “Hold” recommendation on the stock at the current price of - $ 0.13

BT Investment Management Ltd

BTT Details 
· Dividend player: BT Investment Management Ltd (ASX: BTT) stock lost over 4.95% on December 20, 2016 owing to downgrade in market sentiments at the back of expectations of a weak update from the group’s UK based JO Hambro business. Meanwhile, BTT reported that they are paying their final 2016 dividend on 21 December 2016 while the allocation price for shares to be issued under the Dividend Reinvestment Plan (DRP) will be $11.03. The group estimates to issue 251,935 new shares under the DRP on 21 December 2016, leading to overall ordinary shares of 310,769,797 on issue. BTT delivered an overall dividends growth by 14% year on year (yoy) to 42.0 cents for FY16 while generated an overall shareholder return of 42% per annum on average over five years.

· Recommendation: UK and Europe represent second major FUM portfolio for BTT which is worth about $26.3 billion as at 30 September 2016, after its major FUM portfolio from Asia Pacific worth about $45.0 billion. We think that the ongoing uncertainty in the UK and Europe might continue to impact the group’s FUM performance in the coming periods. Moreover, BTT stock already rallied over 31.8% in the last three months (as of December 19, 2016) placing the stock at a higher P/E. We give an “Expensive” recommendation on the stock at the current price of - $ 10.55 

Dividend growth over the years (Source: Company Reports)

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