Two stocks that moved up on ASX – Xero Ltd and Nine Entertainment Co Holdings Ltd

Xero Ltd

XRO Details
· Ongoing growth in Subscriber’s base: Xero Ltd (ASX: XRO) stock surged about 2% on November 03, 2016 driven by the positive interim results. The group’s operating revenue surged 48% year on year (yoy) to $137.2 million in the first half of 2017. Subscriber’s momentum growth continued which delivered a 45% yoy rise to 862,000 during the period. Annualised committed monthly revenue (ACMR) reached $303.2 million during the period, as this was affected by NZD which hurt ACMR by $29.9 million. The group is leveraging the cloud accounting market in Australia and New Zealand, wherein the subscriber’s base surged by 39% yoy to 592,000 subscribers during the period. The group’s United Kingdom cloud accounting market is also gaining momentum, wherein the subscribers surged 61% yoy to 164,000 as compared to the same period of last year. North America subscribers rose 64% yoy to 77,000 as compared to the same period of last year. Even EBITDA loss was cut from $33.8 million in the same period last year to $25.9 million. Gross margins improved to 75% as compared to 74% in the same period of last year. The group reported a $137.9 million of cash and short-term deposits as of September 2016, while the group said that they would manage cash usage to break-even.

· Recommendation: XRO stock corrected over 13.1% in the last four weeks (as of November 02, 2016) opening an attractive opportunity for investors. We give a “Buy” recommendation on the stock at the current price of $ 16.40
 

First half of fiscal year of 2017 (Source: Company Reports) 

Nine Entertainment Co Holdings Ltd

NEC Details
· Positive sentiments driving the stock: Nine Entertainment Co Holdings Ltd (ASX: NEC) stock surged over 5.85% on November 03, 2016 at the back of some positive sentiments. The group is also focusing on digital businesses. The stock corrected over 54.9% this year to date (as of November 02, 2016) due to concerns of declining advertising revenue in the TV market. On the other hand, the group has been building a diversified portfolio and investing in growth platforms to offset the core business pressure. The group’s Stan is witnessing ongoing subscriber’s growth and forecasts a cash flow break-even by FY18. Management believes that their SVOD complements PayTV and multiple SVOD subscriptions. There is still potential left even though the above efforts come under a long-term strategy.

· Recommendation: We give a “Hold” recommendation on the stock at the current price of $ 0.90
 

Stan strategic position against competition (Source: Company Reports)

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.