Appen Ltd


APX Details

Building contract base: Appen Ltd (ASX: APX) has renewed a significant annual contract with its largest social media customer across multiple projects. APX also got a new contract to provide enhanced data services to the world’s largest global photo sharing platform which will form of Purchase orders covering Appen products & services for the financial year 2016 and beyond. The group is positioning for targeting high growth language technology and machine learning markets, and expanded global customer base. The company has recently announced issue and allotment of 106, 250 fully paid ordinary shares upon exercise of unlisted options.
 

Solid recurring revenues (Source: Company Reports)
 
Given the above positive outcomes, the stock surged over 50% in the last three months (as at June 08, 2016) placing the stock at a higher P/E. Moreover, the group is also undergoing management changes since the middle of year 2015, and appointed a new CEO and in January 2016 the company had a new CFO. We believe that the stock is “Expensive” at the current price of  $2.46
 

APX Daily Chart (Source: Thomson Reuters)
 
AWE Limited


AWE Details

Improving Reserves potential: AWE Limited’s (ASX: AWE) recently reported that its extensive evaluation of Waitsia-1 and Waitsia-2 wells confirmed an increase in Gas In Place (GIP) and recoverable volume estimates leading to an upgrade in 2P Reserves (93%) and conversion of 2C Contingent Resources to 2P Reserves. As a result, the group now has a 2P Reserves and 2C Contingent Resources of 867 Bcf of gas (net 432 Bcf to AWE).
 

Waitsia field 2P and 2C resources (Source: Company Reports)
 
AWE is planning to drill another two appraisal wells on the Waitsia field in 2017 and these might have the potential to unlock further reserves and resources in the south-eastern extent of the field. With regards to G Sand appraisal well drilling update highlights, G Sand reservoir is estimated to contain 289 million barrels gross oil in place with 36 million barrels gross recoverable oil (net 8.4 million barrels 2C Contingent Resources to AWE). The Ande Ande Lumut (AAL) oil project comprises the K Sand reservoir (101 million barrels gross recoverable oil, net 24.3 million barrels of 2P Reserves and 1.7 million barrels 2C Contingent Resources to AWE) and the underlying G Sand reservoir. Given the solid potential prospects from the group’s exploration efforts, we maintain our “Buy” recommendation on the stock at the current price of $0.90
 

AWE Daily Chart (Source: Thomson Reuters)
 
Aristocrat Leisure Limited


ALL Details

Contributions from Video Gaming Technologies’ acquisition: Aristocrat Leisure Limited (ASX: ALL) stock surged over 29.27% in the last one month (as of June 08, 2016) driven by the solid company’s performance wherein the profit more than doubled to $159.1 million in the first-half of 2016 while revenue reached over 1 billion. The topline increase is driven by the first time contribution of US$1.3 billion Video Gaming Technologies which was acquired in 2014. ALL has increased market share domestically and in the United States.
 

First half of 2016 performance (Source: Company Reports)
 
The company is focusing on investment in talent, technology and execution targeting recurring revenue and outright sale segments’ growth. The group is also looking for smaller deals in the digital sector that would increase their earnings. On the other hand, the aggressive rally in the stock placed ALL at unreasonable valuation with a higher P/E. We give “Expensive” recommendation on this dividend yield stock at the current price of $13.22
 

ALL Daily Chart (Source: Thomson Reuters)
 
Amaysim Australia Ltd


AYS Details

Solid subscriber outlook: Amaysim Australia Ltd (ASX: AYS) stock plunged over 36.36% year to date (as of June 08, 2016) due to lower than estimated interim results and guidance by the group. On the other hand, AYS acquired the Vaya budget mobile business, and accordingly, the management expects to meet forecasts for total subscriber numbers of between 960,000 to 980,000 by the end of June 2016. AYS is increasing online sales of its SIM cards that is expected to help save on costs, and complements the retail distribution network that covers many of Australia’s main convenience stores.
 

Solid subscriber’s base (Source: Company Reports)
 
The company is estimating EBITDA of $31.7m (excluding estimated impact of Vaya acquisition) for FY 16. AYS was also added in S&P/ASX 300 Index as per the S&P DJ Indices’ March quarter rebalance. We believe investors need to leverage the correction opportunity as we give a “Buy” recommendation on the stock at the current price of $1.755.
 
AYS Daily Chart (Source: Thomson Reuters)
 
 

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