Myer Holdings Ltd

MYR Details
· Positive first quarter trading update drove the performance: Myer Holdings Ltd (ASX: MYR) stock rose over 14.4% on November 18, 2016 driven by the strong first quarter of 2017 update. For first quarter of FY17, MYR reported a 0.6% growth in the total sales to $719.2 million and on a comparable stores sales basis, the sales grew 1.6%. For FY 17, MYR has planned capital investments rapid rollout of New Myer, and intends to continue to roll more brands. MYR would exit stores at Brookside, Orange and Wollongong and forecasts EBITDA growth to exceed sales growth from FY 17 and a return to NPAT growth. In the first year of New Myer Strategy, MYR opened ‘New Myer’ Warringah store and new Werribee store. There was 7.2% improvement in Net Promoter Score in the flagship and premium stores due to the investment in services. Additionally, there was 74% growth in omni-channel sales with profit and the same is growing well ahead of sales. Meanwhile, MYR stock has fallen 23.25% in the last three months as on November 17, 2016.

· Recommendation: Given the competitive environment and prospects, we give an “Expensive” recommendation on the stock at the current price of – $ 1.19
 

FY 16 Financial Performance (Source: Company Reports) 

Automotive Holdings Group Ltd

AHG Details
· Focusing on cost savings and pipeline: Automotive Holdings Group Ltd (ASX: AHG) stock rose over 5.72% on November 18, 2016 driven by their positive outlook despite the challenging performance of Refrigerated Logistics division. AHG earlier reported a 7.2% increase in revenues to $5.25 billion in FY 16 and the earnings per share grew 2.4% to 28.7 cents per share. But this is slower than operating profit primarily due to costs related to acquisitions and a few one-offs including impairment of assets. In addition, in the first quarter FY 17, the unaudited group operating EBITDA fell 7.8% to $62.7 million than the prior corresponding period. This is due to a reduced contribution from AHG’s Refrigerated Logistics division, and the division’s performance trending is expected in line with H2 FY16. On the other hand, AHG had raised $110 million in September through institutional and retail investors. Moreover, AHG outlook for new vehicle sales in Australia and New Zealand is strong except in Western Australia. AHG expects to generate major benefits over the short to medium term from the national expansion of its used car strategy, branded as EasyAuto123 and is pursuing opportunities in the non?conventional and digital car sales space. Additionally, AHG has implemented the new operating model to eliminate duplication and costs, streamlined processes and improved productivity in a single commercial structure that is aligned to customers’ needs and relationships. AHG is expecting a significant improvement in earnings from Refrigerated Logistics in H2 FY17 as the division realizes cost savings from the major transformation program. The stock fell 9.6% in last one month at the back of speculations on the sale of Refrigerated Logistics division while the company has received many expressions of interest but none has proceeded further, rather AHG is taking efforts in restructuring the division.

· Recommendation: Trading at a solid dividend yield and an attractive P/E, we give a “Buy” recommendation on the stock at the current price of – $ 3.88 

First Quarter of FY 17 Trading Update (Source: Company Reports) 

XPED Ltd

XPE Details
· Completed porting to two major chipset manufacturers: XPED Ltd (ASX: XPE) stock rose 31.03% on November 18, 2016, after the company successfully ported ADRC technologies to two major US chipset manufacturers. Moreover, after the successful porting of ADRC, XPE is in discussions with the clients of the chipset manufacturers, with the aim of reaching licensing agreements. The group recently secured up to $10 million premium to Convertible Note.

· Recommendation: We give a “Speculative Buy” recommendation on the stock at the current price of – $ 0.038

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