SomnoMed Ltd

SOM Details
Sales growth accelerating: SomnoMed Ltd (ASX: SOM) reported a strong September sales growth compensating soft sales of July and August (wherein sales grew about 13%). September sales were up 23.8% year on year (yoy) resulting into strong 16.9% unit sales for Q1 of FY16/17. Sales revenues grew 13.4% to $10.94 million.  North America unit sales grew 13.6% in July / August while in September it reported splendid performance with sale rising by excellent 35.3%, lifting quarter growth from North America to 20.5%. Sales through licensees were stronger than expected and contributed 16.5% of the total regional sales.  Sale of new SomnoDent devices dominated North American sales accounting for 56% of total direct sales. Even, Signature Fusion device sales grew by over 45% in the reported quarter while newly introduced SUAD devices contributed 3% of total direct sales. In the new standard line of products, Herbst Advance grew by 31% during the quarter, and Air device sales grew by 44.7%. SMO also received the FDA 510k approval for its new instant fit SomnoDent@ alpha device. In Europe, device sales grew by 19.4% during the first quarter and Europe’s share in September rose to 42.7%. The company achieved excellent growth exceeding 25% in number of core and new markets.
 

Global unit sales growth and revenue growth for 2015/16 (Source: Company Reports)
 
French policies favorable: French government announced new regulations which will help COAT (Device and Fitting services) to be fully reimbursed and all diagnosed patients with mild and moderate conditions will be directed to use oral appliances as first line treatment in Europe’s biggest CPAP market. The stock price spiked up in the last one month to 17.26% (as at October 20, 2016). We recommend a “Hold” on the stock at the current market price of $3.95

 
SOM Daily Chart (Source: Thomson Reuters) 

Data #3 Ltd

DTL Details
Strong financial performance: Data #3 Ltd (ASX: DTL) after reporting declining profits for few years has changed its direction to capture more revenues from the cloud and services sectors.  With business reporting growth in almost all Australian states, Data # 3 reported a strong 13% yoy increase in total revenues from ordinary activities to $983.2 million for FY16. Net profit growth was splendid with full year profit rising 30.4% to $13.8 million reporting an EPS of 9 cents per share. The company declared a final dividend of 5.5 cents per share, bringing full year dividend to 8 cents per share.
 

Product gross profit (Source: Company Reports)
 
CareMonkey announced strategic partnership with Data #3: CareMonkey is world’s fastest growing emergency health and safety platform, and has signed a strategic partnership with Data #3. Under the partnership, Data #3 would offer the CareMonkey health and safety solutions to eliminate paper forms in schools and give authorized teachers and carers access to important medical and contact details in an emergency. The group will hold its AGM on November 16, 2016. DTL stock is on upsurge and steadily moving upward in October 2016 while we believe the stock is a “Hold” at the current market price of $ 1.60

 
DTL Daily Chart (Source: Thomson Reuters)

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