Liberty Financial Group
LFG Details
Financial Highlights: Liberty Financial Group (ASX: LFG) provides residential and commercial mortgages, motor vehicle finance, personal loans, business loans, broking services, general insurance and investments. The below picture gives an overview of the company’s performance in 1HFY22:
Financial Summary (Source: Analysis by Kalkine Group)
Key Risks: The company is exposed to risks arising from the failure of counterparties in paying loans, rising competition from peers and regulatory risks, etc.
Outlook: The company believes that its decent liquidity and capital position would support future growth. LFG would be focused on decreasing borrowing costs to complement Net Interest Margin (NIM), and introduction of expanded auto finance solutions.
Stock Recommendation: The stock of LFG is trading near its 52-week low level of $4.460, offering a decent opportunity for accumulation. The stock has been corrected by ~10.95% in the past month. In addition, the stock has an EV/Sales multiple of 1.9x against the industry median (Financials) of 2.7x. Thus, it seems that the stock is undervalued at the current trading levels. Considering the valuation on a TTM basis, decent liquidity and capital position, growing bottom line and financial assets, decent outlook, current trading levels, and key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the closing market price of $4.500, down by ~0.442% as on 15th June 2022.
LFG Daily Technical Chart, Data Source: REFINITIV
Thorney Opportunities Ltd
TOP Details
NTA Highlights: Thorney Opportunities Ltd (ASX: TOP) is an ASX-listed investment company which invests in listed and unlisted equities and financial assets. For the month of May 2022, the net tangible asset backing per share (after-tax) stood at 69.2 cents against 71.5 cents at the end of April 2022. The NTA was impacted by continued market weakness because of ongoing stagflation concerns on softer economic activity globally and as inflationary pressures continued to increase. During 1HFY22, the company’s interim dividend rose by 25% to 1.00 cps against 0.80 cps in 1HFY21.
NTA Summary (Source: Analysis by Kalkine Group)
Key Risks: The company is exposed to risks arising from the volatility in the investment markets. In addition, the loss of clients could also be a major risk for the business growth.
Outlook: Looking forward, the company would focus on reducing and eliminating the discount of its share price to NTA and continue to undertake several strategies to achieve this goal, including capital management initiatives through share buy backs.
Stock Recommendation: The stock of TOP is trading near its 52-week low level of $0.460, offering a decent opportunity for accumulation. The stock has been corrected by ~6.93% in the past month. In addition, the stock is trading at a P/BV multiple of 0.6x against the industry median (Financials) of 1.0x. Thus, it seems that the stock is undervalued at the current trading levels. Considering the valuation on a TTM basis, confidence in future portfolio performance, rising dividend, decent outlook, current trading levels, and key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the closing market price of $0.465, up by ~1.086% as on 15th June 2022.
TOP Daily Technical Chart, Data Source: REFINITIV
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.
Technical Indicators Defined: -
Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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