Service Stream Ltd

DCMA agreement with nbn: Service Stream Ltd (ASX: SSM) has signed a new Design and Construction Master Agreement (DCMA) with nbn under its new Fibre-to-the-Curb (FTTC) technology. Under the DCMA, SSM’s Fixed Communications division is responsible for the design and construction of broadband infrastructure to over 130,000 premises in the eastern regions of Melbourne. The work under the new contract is valued at over $120 million to be done over the 2.5-year term. SSM is expecting to get its first work instruction under the agreement and will start design works as early as February 2017 and targeting the completion of all associated construction activities by April 2019. Given this deal, the stock rallied over 13.6% on December 21, 2016 but slipped 3% on December 22, 2016. The group has appointed an additional company secretary, Nicole Goding. Overall, the stock has already risen 37.3% in the last six months as on December 20, 2016, and is trading at a higher P/E. We give an “Expensive” recommendation on the stock at the current price of – $ 1.06

Contango Income Generator Ltd

Stake sell-down completed: Contango Income Generator Ltd (ASX: CIE) has announced about completion of the stake sell-down by Contango Microcap Limited (CTN) in CIE. The shares (3 million) have been sold to both CTN and CIE shareholders through an application offer. This move has been expected to enhance liquidity. CIE recently appointed Andrew MacDonald, as non-executive director and chairman while Ms Hari Morfis joined as Company Secretary. We give a “Speculative Buy” recommendation on the stock at the current price of – $ 0.95

Spotless Group Holdings Ltd

FY17 a transitional year: Spotless Group Holdings Ltd (ASX: SPO) recently appointed Simon McKeon AO as a non-Executive director. In FY 16, SPO witnessed many challenges owing to which net profit after tax dropped 14% and EBITDA was down 1.5% over previous period but the group could manage to report a 10.6% growth in revenue. However, the group delivered a 17% and 6% growth in the underlying revenue and EBITDA, respectively. The revenue grew from the stable performance of existing business and the acquisition contribution. SPO has committed $200 million to six acquisitions, invested in the working capital in the acquired businesses and invested the capital required to support delivery of the long-term contracts including PPP’s. The group expects FY17 to be a transitional year at the back of contract losses and margin pressure in some sectors but second half is expected to be better while group’s efforts in mobilising seven new PPP’s will add value in FY17. SPO stock has a good dividend yield and is trading at a cheap P/E. We give a “Buy” recommendation on the stock at the current price of – $ 0.96

Paragon Care Ltd

Supply agreement with Total Face Group: Paragon Care Ltd (ASX: PGC) has signed a supply agreement with Total Face Group (TFG) to supply a range of Paragon’s products across the TFG network. Under the new supply agreement, PGC would supply a vast array of products and service options under the agreement spanning across consumables, capital equipment and devices. Moreover, TFG relationship is expected to support strong revenue growth for PGC in FY17 and beyond. PGC stock has risen 24.6% in the last six months as on December 21, 2016. We give a “Hold” recommendation on the stock at the current price of – $ 0.77

AVJennings Ltd

Portfolio Expansion: AVJennings Ltd (ASX: AVJ) commented that while activity patterns and growth rates in some markets are seen to be changing, the returns are expected in second half of financial year 2017. Further, contract signings are expected to be at a level like that as seen in FY16. In FY 16, AVJ reported for revenue growth of 32.7% to $421.9 million. The group’s profit before tax rose 22.0% to $58.8 million while earnings per share rose 18.6% to 10.71 cents. The revenue grew on the back of changes in product mix and project share, while AVJ benefitted from the announcements made in prior periods that it would acquire the interests of joint venture partners in the ‘Argyle’, Sydney and ‘St Clair’, Adelaide projects. We give a “Buy” recommendation on the stock at the current price of – $ 0.61

Skydive the Beach Group Ltd

First quarter performance in line with expectations: Skydive the Beach Group Ltd (ASX: SKB) stock surged 4.8% on December 22, 2016. The group finished the first full financial year in FY 16 as a publicly listed company. In FY 17 till date, SKB finished the Wanaka deal, completed the Performance Aviation deal and Raging Thunder deal. Moreover, SKB’s results and KPI’s for the first quarter in FY17 are in line with the management expectations and are ahead of the same period last year. SKB expects ongoing strong business momentum for FY17. SKB stock has risen 22.67% in the last six months as on December 20, 2016 and is trading close to its 52-week high price. We give a “Hold” recommendation on the stock at the current price of – $ 0.65

Peet Ltd

Sale of Victorian land parcel: Peet Ltd (ASX: PPC) lately announced the sale of an undeveloped englobo parcel in Rockbank, west of Melbourne, Victoria for $30.5 million. The settlement is expected by November 2017. Recently, the group had also issued FY17 Performance Rights of the order of 2,445,666. Financial Year 2016 has been the group’s fourth consecutive year of operating profit growth. For FY17, the group expects to witness supportive conditions in Victoria, New South Wales/ACT and South Australia while Western Australia and Northern Territory may remain subdued. Further, earnings are expected to be weighted to 2H17. PPC stock has a decent dividend yield and is trading at a cheap P/E. We give a “Buy” recommendation on the stock at the current price of – $ 0.96

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