Data#3 Limited

DTL Details 
· Sustained earnings growth is expected: Data#3 Limited (ASX: DTL) stock surged 6.4% on January 20, 2017 as the group is set to deliver strong first half of 2017 results. The group forecasts a consolidated net profit before tax (NPBT) of over $8.0 million in the first half of the 2017 financial year which is a rise of over 30% against the first half of 2016 NPBT of $6.1 million. This performance is mainly driven by their growth in services, and a modest profit contribution from Discovery Technology. We believe the group is well placed in the Cloud services business and the group reported a revenue growth of 17% in FY16 while the cloud-based revenues surged 110% to $99 million. DTL has also partnered with Microsoft which is a major public cloud provider. The group is enabling customers transition into service-centric public cloud solutions further driving the business, apart from their organic growth. 

Historical performance (Source: Company Reports)
 
Recommendation: DTL stock rallied over 44.7% in the last six months (as of January 19, 2017) and we believe this momentum in the stock would continue in the coming months. DTL stock also offers a lucrative dividend yield. We give a “Hold” recommendation at the current price of – $ 1.75

Pilbara Minerals Limited

PLS Details
· Pilgangoora Lithium-Tantalum project progress on track: Pilbara Minerals Limited (ASX: PLS) stock surged over 7.7% on January 20, 2017 driven by the positive market sentiments and boost from commodity prices. The group lately awarded their camp relocation and establishment work for Pilgangoora Lithium-Tantalum project to OTOC Australia. This project is worth of $4.8 million. RCR Tomlinson won the Engineering, procurement and construction contract for Pilgangoora Lithium-Tantalum Project which has a target cost of A$138 million with a guaranteed maximum price of A$148 million. Meanwhile, Lithium Australia (ASX: LIT) reported that they got strong results in continuous Sileach™ pilot plant run operations on spodumene concentrates from the group’s core Pilgangoora project.

· Recommendation: PLS stock rallied over 11.8% in the last three months (as of January 19, 2017) and we believe this bullish momentum in the stock will continue given the rapidly growing demand for Lithium from various sectors. We maintain a “Buy” recommendation on the stock at the current price of – $ 0.56

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