Steadfast Group Ltd

SDF Details 
· Ongoing bullish sentiment on the stock: Steadfast Group Ltd (ASX: SDF) stock surged over 8.5% on January 12, 2017 post a total rise of over 6.7% in the last four weeks (as of January 11, 2017). Recently, Ruralco Holdings Ltd (ASX: RHL) invested in Ausure Consolidated Brokers which is a subsidiary of the Steadfast Group (ASX: SDF). Ruralco acquired 50% stake in ACB and with this investment, RHL would boost their financial services offerings as well as expand penetration in local rural markets. SDF also delivered a solid FY16 results wherein their underlying revenues rose 54% on a year-on-year basis to $460 million driven by synergies from their acquisitions. Net profit after tax enhanced 44% to $60 million excluding non-trading net gains while underlying cash EPS surged 12% to 11 cents per share. Accordingly, SDF boosted their franked dividend by 20% to 6 cents per share.

· Recommendation: SDF stock has gained momentum given their solid performance despite low growth environment and challenging premium rates in the insurance industry. We maintain our “Hold” recommendation on the stock at the current price of – $ 2.42 

SDF Network Brokers (Company Reports) 

IPH Ltd

IPH Details 
· Strengthened presence in Asia: IPH Ltd (ASX: IPH) stock rose over 4.85% on January 12, 2017 leading to a total rally of about 14%, in the last four weeks. The group finished their share sale facility (Sale Facility) for the controlled entities of certain former trustees of the Spruson & Ferguson business that held escrowed shares in IPH (Escrowed Shares). Over 30 million escrowed Shares were sold via this Sale Facility at a price of $5.00 per Escrowed Share. IPH reported a decent fiscal year of 2016 performance wherein their earnings per share rose 11% on FY15, driven by their acquisitions and organic growth from the IP services businesses. IPH enhanced their Asia-Pacific presence with the acquisition of Callinans, Pizzeys and Cullens while opened offices in Spruson & Ferguson in Indonesia and Thailand and Pizzeys in Singapore. The group also has Ella Cheong business in Hong Kong and Beijing. IPH forecasts their 2017 EBITDA in the range of $72 and 74 million (for an AUD/USD exchange rate of 76.2c).

· Recommendation: IPH management cautioned investors on volatility in financial markets post the US election. Moreover, the foreign exchange fluctuations might impact the performance. Trading at a relatively higher P/E, we give an “Expensive” recommendation on the stock at the current price of – $ 5.40

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