Collection House Ltd

CLH Dividend Details
 
Outstanding dividend yield but reduced guidance for FY16: Collection House Limited (ASX: CLH) reported a net profit after tax decline by 26% to $8.3 million for the first half of 2016 as the group incurred one-time restructuring cost of $1.2 million. The group’s revenues rose just 1% to $64.6 million against the earlier year impacted by the decrease in Purchased Debt Ledger (PDL) acquisitions by 26% yoy to $30.1 million on the back of high prices for debt. PDL collections fell by 8% to $59.4 million even though the Collection Services and other revenue improved by 20% against prior corresponding period (pcp). As a result, the stock fell by 45.43% during this year to date (as of March 31, 2016).
 

PDL Book Performance (Source: Company Reports)
 
On the other hand, the group’s revenue from new Government Services division would start from the fourth quarter of 2016 as preparations are being made to start this center by April 2016. CLH maintained its gearing at 40.5% while has $5 million of loans approval for first half of 2016. Meanwhile, the heavy correction in the stock placed them at very cheaper valuations, with the stock trading at very low P/E. CLH also has an outstanding dividend yield. Accordingly, we issue a “speculative buy” on the stock at the current price of  $0.935
 
 
CLH Daily Chart (Source: Thomson Reuters)
 

ClearView Wealth Ltd

CVW Dividend Details
 
Solid Life Insurance potential: ClearView Wealth Ltd (ASX: CVW) stock corrected over 4% (as of March 31, 2016) this year to date as the group issued a hazy outlook for its wealth management business with possible impact from investment markets on fee income as well as net investment flows slowdown given the tough market conditions. On the other hand, the stock recovered by 10.98% (as of March 31, 2016) in the last one month due to recovering global markets.
 

Performance across segments (Source: Company Reports)
 
In fact, CVW delivered an outstanding first half of 2016 performance with Life Insurance segment’s In-force Premium and New Business Life Advice surging by 30% and 19%, respectively. The group is positive on further penetration of its Life Insurance business as Australian market has low levels of insurance penetration and is under-insured. We issue a “speculative buy” on this dividend yield stock at the current price of  $0.96
 
 
CVW Daily Chart (Source: Thomson Reuters)
 

Seymour Whyte Ltd

SWL Dividend Details
 
Solid order book and attractive valuations: Seymour Whyte Ltd (ASX: SWL) stock plunged over 32.8% (as of March 31, 2016) in the last six months as the group’s management reported that they experienced tough conditions across its target markets like Queensland. Stepping into NSW seems to work well with 59% of the Transport order book being from NSW. SWL also has about $28mn in net cash on balance sheet. However, the company has lowered its 2H16 NPAT guidance to $4-5mn which is below the prior guidance of 'stronger than 2H15' (2H15 NPAT of $6.7mn) at the back of impact from competition and compressed margins. Upside to 2H16 guidance is expected from outstanding claims under negotiation. On the other hand, the group said that they have over $1 billion worth of active tenders and expression of interests. Victoria and NSW are estimated to deliver strong performance post FY17. Meanwhile, the heavy correction also placed the stock at reasonable P/E. With an outstanding dividend yield, we give a “speculative buy” on this stock at the current price of  $0.85
 
 
SWL Daily Chart (Source: Thomson Reuters)
 

Whitehaven Coal Ltd

WHC Details
 
Improving Maules Creek production: Whitehaven Coal Limited (ASX: WHC) is targeting the Asian markets given the rising demand for high quality coal in markets like India, Taiwan, Korea and Japan. Metallurgical coal sales would account around 35% of the group’s overall sales after the Maules Creek is totally ramped up. With the metallurgical coal products having better yields and prices, the group is well positioned to maximize sales of metallurgical coal against peers via Maules Creek and Narrabri.
 

Long term coal demand (Source: Company Reports)
 
WHC stock recovered by 3.97% (as of March 31, 2016) in the last four weeks on the back of recovering conditions in Asia and commodity markets. Accordingly, we remain bullish on the stock and give a “Speculative Buy” at the current price of  $0.65
 
 
WHC Daily Chart (Source: Thomson Reuters)
 

Yowie Group Ltd

YOW Details
 
Expanding US presence despite facing litigations: Yowie Group Ltd (ASX: YOW) stock plunged over 41.15% in the last three months (as of March 31, 2016). This fall was partly due to legal charges faced by its earlier manufacturer, Hank Whetstone to retain the equipment related to Yowie wrapper. The group and the Sheriff of St. John’s County, Florida were asked to take away its spare wrapper and some raw materials from Atlantic Candy Company (ACC). On the other hand, Judgement came in favor of Yowie which reported that ACC efforts to mishandle the group’s property would lead to a potential monetary liability. The group’s penetration in the US is ongoing and estimates to be at 6,500 stores in April 2016 (product available in national distribution in the largest drug retail chain). Yowie Group is penetrating in the US markets via Walmart and Walgreens. We believe that investors could leverage the recent correction in the stock as we give a “BUY” on YOW at the current price of $0.635
 
 
YOW Daily Chart (Source: Thomson Reuters)
 

iCar Asia Ltd

ICQ Details
 
Strong domestic as well as international performance: iCar Asia Ltd (ASX: ICQ) reported a record financial performance for 2015 fiscal year with revenues rising by 123% to $6.28 million. Malaysian revenues surged by 71% yoy while EBITDA achieved a breakeven during the fourth quarter of 2015.
 

Regional strategy (Source: Company Reports)
 
Thailand generated outstanding revenue growth of 327% on a yoy basis while the group improved Indonesia investments by 35% yoy to further boost its Asian markets given the enormous potential in the region. ICQ is targeting the huge Asian region opportunity which has over $1.7 billion worth of overall automotive advertising spend while  4.1% comprises internet advertising share, which is growing rapidly. ICQ rallied over 22.30% (as of March 31, 2016) in the last six months and we remain bullish on the stock and reiterate our “BUY” recommendation at the current price of  $0.90
 
 
ICQ Daily Chart (Source: Thomson Reuters)

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