Pact Group Holdings Ltd

PGH Details
· Rising director’s interests: Pact Group Holdings Ltd (ASX: PGH) stock surged over 5.5% on November 29, 2016 with market sentiments. The group’s director, Jonathan Ling acquired over 8,090 fully paid ordinary shares in the group leading to a total of 10,455 shares.

· Strong fiscal year of 2016 results: PGH delivered a sales revenue rise of almost 11% year on year (yoy) to $1.4 billion. Net profit after tax and before significant items rose 11% yoy to $94.3 million. The group enhanced their dividends by 8% yoy to 21 cents per share against FY15. Pact has generated a total shareholder return of 33.5% for fiscal year of 2016 while delivered a cumulative TSR of 53.9% since listing.

· Recommendation: The shares of Pact already delivered over 23% during this year to date (as of November 28, 2016). The stock is trading at a very high P/E. We give an “Expensive” recommendation on the stock at the current price of – $ 6.50

iSentia Group Ltd

ISD Details
· Volatile sentiments: iSentia Group Ltd (ASX: ISD) stock rose over 4.7% on November 29, 2016 while Commonwealth Bank of Australia ceases to be a substantial holder.

· Weak outlook: The group expects a weak revenue momentum for their Content Marketing division (which accounts over 7% of FY16 EBITDA) impacted by their decisions with regard to strategy, coupled with new business development and client retention for fiscal year of 2017. As a result, the Content Marketing division is expected to report an EBITDA loss of about $2 million for the first half of 2017 despite a positive contribution for the full year of 2016. Accordingly, the overall group forecasts of first half of 2017 EBITDA is expected to be lower than the corresponding period of last year.

· Recommendation: ISD stock lost over 27.9% (as of November 28, 2016) in the last four weeks affected by the weak trading outlook on the group. Also trading at a high P/E, we believe the stock pressure would continue in the coming months. We give an “Expensive” recommendation on the stock at the current price of - $ 2.65


ISD financial performance over the last few years (Source: Company Reports)

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