Vita Group Ltd

                               

VTG Dividend Details
 
Ongoing Telstra retail stores growth is supporting the potential growth: Vita Group Limited (ASX: VTG) shares rallied over 18.72% (as of December 18, 2015) in the last four weeks as the management issued a positive forecast with EBITDA in the range of $25.5 million to $27.5 million for the six months ended at December 2015. The group’s ongoing performance by its Telstra retail stores coupled with growing business from small-to-medium business and enterprise channels would further support its performance. Meanwhile, VTG would be closing the rest of eight Next Byte retail stores during the January 2016 quarter, but would be offering Next Byte’s products and services via its telecommunications small-to-medium business and enterprise channels. Vita group forecasts to deliver over $1.6 million of annual savings through the Next Byte’s closure and would be able to generate a further of $0.6 million in second half of 2016 through savings from its support center and the shifting of business to the group’s other channels. The stock of VTG delivered over 64.28% during this year to date (as of December 18, 2015) driven by its strong fiscal year of 2015 performance coupled with increase of special dividends to the shareholders. Still, the stock is trading at attractive valuations with a cheaper P/E as compared to its peers while VTG has a decent dividend yield. Based on the foregoing, we give a buy recommendation on the stock at the current price of  $2.21
 
 
VTG Daily Chart (Source: Thomson Reuters)
 

Asaleo Care Ltd

 

AHY Dividend Details
 
Strong distribution network: The shares of Asaleo Care Ltd (ASX: AHY) plunged over 17.55% in the last six months (as at December 18, 2015) as management estimates just a low to mid-single digit growth of its NPAT and EBITDA for full year of 2015. Management reported that they witnessed tough market conditions in 1H15 against prior corresponding period due to exchange rates impact and inflationary imposts, coupled with rising competition from new entrants in the Tissue and Personal Care categories. On the other hand, Asaleo built a strong presence in hygiene products as well as enhanced its brands presence which includes Sorbent, Handee, Libra and TENA via marketing initiatives. The group’s Tissue business delivered a strong half with Tissue EBITDA rising by 15.3% driven by 4.3% growth (in consumer tissue) on its higher margin core brands.
 

First half of 2015 performance (Source: Company Reports)
 
Asaleo entered into new contract which would further support its Professional Hygiene business. The group’s TENA and Libra brands continue to perform well in the Incontinence Care and Feminine Care markets. Asaleo Care started buyback program of up to 10% of issued capital (or up to $100 million) since fourth quarter of 2015 which would further support the stock. We give a buy recommendation to this dividend yield stock at the current price of $1.565
 
 
AHY Daily Chart (Source: Thomson Reuters)
 

Netcomm Wireless Ltd

 

         NTC Details
 
Strong Client additions: NetComm Wireless Ltd (ASX: NTC) recently entered into a Master Purchase Agreement with a major US based telecommunications carrier for supplying NetComm Wireless’ fixed-wireless devices required to connect households and businesses to a fixed-wireless rural broadband network. NTC has been delivering outstanding wireless growth with its Fixed Wireless surging by over 200% and forecasts the same performance even in FY16. NTC also has a significant competitive edge against its peers with better speed, data allowances and value as per the OVUM report. NetComm also has a strong addressable opportunity with regional Broadband market size at US$80 billion based on Boston consulting. Moreover, 80% of the M2M devices are required to be upgraded and NTC is well positioned to leverage this opportunity.
 

NetComm Wireless market opportunity (Source: Company Reports)
 
Meanwhile, NTC shares surged over 529.17% (as of December 18, 2015) during this year to date and rallied over 76.1% in the last four weeks and we believe that the rapidly growing M2M and Rural Broadband partnerships would continue to drive the group’s performance. We give a speculative buy recommendation on the stock at the current price of  $2.94
 
 
NTC Daily Chart (Source: Thomson Reuters)
 

SMS Management & Technology Ltd

 

SMX Dividend Details
 
Building solid pipeline: SMS Management & Technology Limited (ASX: SMX) shares plunged over 40.35% in the last three months (as at December 18, 2015) as management issued a weak outlook and forecasts the first half EBITDA to be down 15% to 20% to over $13.5 million.
 

FY15 Highlights (Source: Company Reports)
 
On the other hand, SMX is building a strong pipeline of multi-year contracts and accordingly estimates a better second half financial performance against 1H16. SMX delivered a strong FY15 revenue increase of 13% year on year (yoy) to $356 million while NPAT surged over 34% yoy to $17 million. The group’s buyback program coupled with its growth strategies might drive its performance going forward. Moreover, the recent stock crash may offer a buying opportunity. However, we think that the stock is expensive at the current price of  $3.08
 
 
SMXDaily Chart (Source: Thomson Reuters)
 

Rewardle Holdings Ltd

 

          RXH Details
 
Growth from merchant and member network: Rewardle Holdings Ltd (ASX: RXH) is a social network that connects consumers and local businesses based on transactions. The company has been selected as a partner by Google for the upcoming Australian launch of Android Pay in 1H16. The company also lately announced to reward the members and made available Dick Smith gift vouchers through its platform. The company has also renewed its channel partnership with Belaroma Coffee Roasting Company. As on 30 September 2015, the company reported that number of merchants (4721) grew by 197% and are expected to touch 5000 by the end of the calendar year. Members as on 30 September 2015, were 1,330,326 growing by 344% and are expected to touch 1.5 million by the end of the year.
 

Revenue from Large Existing Markets (Source: Company Reports)
 
Check-ins were 18.8 million as on 30 September 2015 growing by 437% and are expected to touch 20 million by the end of the year. Management is executing a simple proven strategy with regards to scale up and monetize the network while providing additional services. The company currently has a market capitalisation undeleted of around $ 23 million and its cash Holdings as of 30 September 2015 was $ 3.2 million. The enterprise value is around $ 20 million. While we believe that the future prospects of the company appear to be bright, we would have to classify it as a speculative buy at the current price of  $0.16
 
 
RXH Daily Chart (Source: Thomson Reuters)
 

AUB Group Ltd

 

   AUB Dividend Details
 
Solid results driving performance: AUB Group Ltd (ASX: AUB) announced that through its 80% owned entity, AUB Group NZ Ltd, it has agreed to acquire a 100% interest in New Zealand's Insurance Broker of the year’, Runacres and Associates, effective from 31 December 2015. With the existing equity interests, AUB Group now directly represents NZ $ 200 million of Gross Written Premium in New Zealand. The group also owns NZbrokers that manages the largest cluster group of brokers in New Zealand. In all, the group now represents NZ $ 550 million of GWP and is the third largest broking entity in the New Zealand market. After sell down to minorities and on a full-year basis, it is expected that the acquisition will contribute 3.8% to EPS growth on adjusted net profit after tax. The group has also announced the sale of its 50% shareholding in Strathearn Insurance Group Pty Ltd for an after-tax profit on sale of approximately $ 5.9 million, contributing approximately 9 cents per share based on current shares on issue. For FY 2015, despite an extremely soft insurance market, the group delivered solid results with an increase of 9.4% in revenue and 2.5% in adjusted net profit after tax. The annual dividend increased by over 3% over the previous year and the dividend yield was around 4.5%. We are bullish on the company and its growth prospects and the latest acquisition will boost its future performance. The shares that fell about 13.16% this year to date actually surged 5.87% in the last five days (as of December 18, 2015) given the above developments. We rate the stock as a buy at the current price of  $8.51
 
 
AUB Daily Chart (Source: Thomson Reuters)

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