Two ASX stocks hitting the roof – REA Group Limited and Domino's Pizza Enterprises Ltd

REA Group Limited

REA Details
· Positive first quarter performance: REA Group Limited (ASX: REA) stock surged over 5.4% on November 08, 2016 as the group continued their ongoing growth even in the first quarter of 2017. The group delivered a revenue growth of 16% year on year (yoy) to $170 million during the period and an EBITDA rise of 9% to $90 million. iProperty revenue contribution coupled with 14% rise in the Australian residential business drove the performance higher. But REA forecasts subdued listing volumes for the entire first half. The group’s operating expenses also rose affected from the iProperty results, and rising marketing expenditure, and this trend is expected to continue even for the second quarter of 2017. On the other hand, the group’s first quarter of 2017 performance indicates their ability to withstand softer property market conditions in Australia. REA continues to enhance their consumer experience while their site, Realestate.com.au continues to be a market leader in Australia wherein the site’s average monthly visits is more than 2.3 times against the nearest competitors. Consumers seem to prefer the group’s site as they spent over 7.5 times more time as compared to any other property site in the country. REA continues to strengthen their international penetration.

· Recommendation: We maintain our “Hold” recommendation at the current price of $ 51.09


First quarter of 2017 performance (Source: Company Reports) 

Domino's Pizza Enterprises Ltd

DMP Details
· Enhanced FY17 outlook: Domino's Pizza Enterprises Ltd.’s (ASX: DMP) stock surged over 6.9% on November 08, 2016 driven by the group’s better fiscal year of 2017 outlook. The group enhanced EBITDA growth to be in the region of 30% as compared to the rise of 25% in their earlier results.  DMP reiterated their underlying NPAT rise of 30%, post the same store sales results which are in line or better in all seven regions. The group also enhanced their medium to long-term growth outlook. The group reported that their ‘Taste the Color’ menu in Australia and New Zealand is performing well. The group is also making technology improvements to enhance their efficiency which led them to enhance their share to 38% of the Quick Service Restaurant Pizza sector. The conversion of Joey’s Pizza stores performance in Germany was more than expected and the group expects all stores fully converted by December, and six months ahead of schedule. DMP is planning to open new stores in all regions and forecasts store openings to be at the higher end of their estimates in the range of 175 and 195 stores.  On the other hand, DMP stock is trading at a very high P/E while the dividend yield is low.

· Recommendation: We give an “Expensive” recommendation at the current price of $ 72.79

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376).The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd currently hold positions in:  BHP, BKY, KCN, PDN, and RIO. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.