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COMPANIES

Healius (HLS)

Simon Turner

Senior Equity Analyst

8 am October 26, 2020


Prior close: $3.67

A great start to the year

Healius (ASX:HLS) provided a strong first quarter update last week, confirming our positive view on the stock. COVID-19 testing generated particularly strong revenue and earnings growth in the company’s pathology operations, and its day hospitals are also performing strongly. Is there more upside in this healthcare group which has been a strong outperformer in recent months?

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Praemium (PPS)

David Boyle

Senior Equity Analyst

6 am October 23, 2020


Prior close: $0.71

Does Praemium deserve such a big discount?

Praemium (ASX:PPS) offers an independent investment platform to financial advisors, much the same as Netwealth and HUB24. However, the company gets far less attention than its larger peers and trades at a material discount. The following table compares some of the key metrics:

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Temple & Webster (TPW)

Simon Turner

Senior Equity Analyst

8 am October 23, 2020


Prior close: $11.60

When good is bad

It is not often you see a stock price fall 17% on a day when a company reports that its revenue and EBITDA are tracking well ahead of market expectations. Yet Temple & Webster’s AGM update resulted in that happening. We investigate why and whether the investment case has changed for this online retailer of furniture and homewares.

AGM update

TPW’s management indicated that the 2021 financial year started strongly, with 138% revenue growth between July 1 and October 19.

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Megaport (MP1)

Simon Turner

Senior Equity Analyst

6 am October 22, 2020


Prior close: $14.58

Slower revenue growth exposes high valuation

Megaport (ASX:MP1) has been delivering strong cloud-driven revenue growth in recent years. However, the company released a disappointing first quarter update yesterday showing slower revenue growth. MP1’s share price fell 13% in response. So why did revenue growth slow and is it a serious problem?

First quarter update

During the first quarter of the 2021 financial year, MP1’s revenues grew 43% year-on-year to $17.2 million, driven largely by the US which contributed 63% of new customer growth and 47% of revenue.

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EML Payments (EML)

David Boyle

Senior Equity Analyst

6 am October 22, 2020


Prior close: $3.61

Q1 trading update

EML is a diversified payments technology company, offering products that include physical gift cards, virtual credit cards, and other cloud-based payment solutions. The amount of money processed by EML over the last five years has grown at a compound rate of 94% per annum, and revenue has grown by 51% per annum. Operations now span 28 countries, with over $17 billion of transactions processed annually.

The company released a trading update for the first quarter of FY21 yesterday as part of a broader investor presentation to the market.

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Ecofibre (EOF)

David Boyle

Senior Equity Analyst

6 am October 21, 2020


Prior close: $1.81

Growing pains

Ecofibre (ASX:EOF) provided a negative trading update at their AGM yesterday. The company stated that they expect to incur a loss for the first half of the year, and at this time are targeting a breakeven result for FY21.

1Q FY21 revenue of $7.1 million was down 5% on the prior quarter and down 51% on the same quarter a year ago.

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IDP Education (IEL)

David Boyle

Senior Equity Analyst

6 am October 16, 2020


Prior close: $18.93

Major shareholder looking to sell down

In a very brief statement released to the market on Thursday morning, IDP stated that their major shareholder, Education Australia (EA), is “undertaking a consultation process with its 38 university shareholders which may lead to consideration of options to realise capital for EA shareholders”.

EA has a long history with IDP. It originally owned the entire business before entering into a 50/50 joint venture with SEEK in 2006. SEEK subsequently sold down its stake during the IPO in 2015, whilst EA retained its shareholding.

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Audinate (AD8)

David Boyle

Senior Equity Analyst

6 am October 16, 2020


Prior close: $6.94

Early signs of improvement

The digital audio networking company Audinate (ASX:AD8) provided a trading update yesterday at their AGM.

For the three months ended 30 September 2020, revenue was US$5.2 million and EBITDA was US$0.3 million. There are no comparative numbers for the first quarter of last year, but full year FY20 revenue was US$20.4 million and EBITDA was approximately US$1.4 million, so this represents a run rate comparable to last year.

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FEATURES

Our Top 30 Highest Ranked ASX Growth Stocks

Our Top 30 list of Australian growth stocks is presented in the table below in alphabetical order.

Marcus Tuck

Are the Buy now, Pay later valuations extreme or justified?

In this review of the Buy now, Pay later (BNPL) sector we look at Afterpay (APT), OpenPay (OPY), Splitit (SPT), Sezzle (SZL) and Zip (Z1P).

David Boyle

The 5 Best Growth Stocks

The 5 Best Growth Stocks

Marcus Tuck

Head of Research

8 am October 27, 2020


When doing our quant screening, we usually use a range of factors in combination.

In this report we identify which of our Top 30 growth stocks currently rank best individually for the following six factors:

-Free cash flow yield
-Forecast EPS compound annual growth rate for next 3 years
-FY21 EPS % revision over last 3 months
-FY23 P/E ratio
-FY23 EV/EBITDA ratio
-Price momentum (50-day share price % change)

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The Outlook For Gold

The Outlook For Gold

Simon Turner

Senior Equity Analyst

8 am October 27, 2020

Is recent strength a sign of what’s to come?

The gold price (shown below in USD) has risen 25% through 2020, driven primarily by falling real interest rates and COVID-inspired global economic uncertainty, which has led to growing demand for uncorrelated and defensive assets such as gold.

Given most investors are under-exposed to the gold sector, is now a good time to lift exposure?

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IPO Performance – Part 2

IPO Performance – Part 2

David Boyle

Senior Equity Analyst

6 am October 27, 2020

Are IPOs good long term investments?

IPOs can deliver good short term returns for investors, even if it may not be as impressive as headlines suggest. In our last report on short term IPO performance, it was shown that average first day returns from participating in IPOs were high. After making a few adjustments the story didn’t look quite as good, but the returns were still positive.

The longer term performance of IPOs is a completely different story. The process of taking a company public typically involves some very well informed private sellers looking to raise money, with less well informed public buyers on the other side.

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IPO Performance – Part 1

IPO Performance – Part 1

David Boyle

Senior Equity Analyst

6 am October 26, 2020

Is it profitable to trade in IPOs?

Initial Public Offerings (IPOs) are the process used by privately owned companies to offer shares to the public and list on the stock exchange. Each year there are around 50 to 100 companies that go through the IPO process in Australia and list on the ASX.

History suggests that, on average, participating in IPOs will generate a “stag” profit. This is when investors subscribe for shares in the IPO and sell at a higher price on the first day of trading.

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ESG Market Opportunities

ESG Market Opportunities

Simon Turner

Senior Equity Analyst

6 am October 21, 2020

Mainstream and booming

Incorporating ESG (Environmental, Social & Governance) analysis into investment decision making is an important way to minimize risk.

Two recent examples that governance-focused investors would have seen as red flags are:

*Crown Resorts (CWN) – Crown’s governance standards have been in question since May 2019 when James Packer agreed to sell part of his Crown stake to Melco for $1.76 billion in breach of a regulatory undertaking (due to concerns Melco has links to organized crime). The list of subsequent governance concerns is long and ugly, but suffice to say the stock is not ESG friendly.

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Retail Sector Dividends

Retail Sector Dividends

David Boyle

Senior Equity Analyst

6 am October 20, 2020

How secure are the dividends?

The last six months has probably been the most volatile period ever experienced by Australian retailers due to COVID-19. Highly stimulatory government payments resulted in a surge of retail spending, as lost wages were in aggregate overcompensated for by Job Keeper/Seeker payments. Additionally, there was a massive reallocation in consumer budgets. Travel was out, home office and furniture was in. There was also a material shift to online sales channels.

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Residential Property Market Update

Residential Property Market Update

Simon Turner

Senior Equity Analyst

8 am October 19, 2020

In the twilight zone

Despite some dire predictions of what COVID-19 would do to Australian residential property prices, house prices having been holding up pretty well. There have been examples of excess at the top end of the market. For example, there was extensive media coverage recently about a Point Piper apartment that sold for $13.025 million, nearly double the initial price guide.

In this report we take a look at what is happening in residential markets around Australia, for properties without lavish views of Sydney Harbour.

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PORTFOLIO

The Top 10 Performance Since August 2014

The Top 10 Performance Since August 2014

By Paul Nojin

The Super Investor

October 12, 2020

In the 6 years and 2 months from August 2014 to September 2020 The Top 10 has achieved an average annual return of 13.5%.

In the same period the All Ords [including dividends] returned 5.9%.

Since inception in August 2014 The Super Investor has gained 112.6% compared to a 38.3% gain in the index.

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Stock Market Strategies That Work In Australia

Stock Market Strategies That Work In Australia

Stock Market Strategies That Work In Australia

By Paul Nojin

The Super Investor

9 am September 6, 2020

By Paul Nojin & Matthew Brooks
Chapter 1: The Ultimate Investment Strategy

Whether you are a seasoned professional or an optimistic beginner, the global financial crisis will have no doubt made you a more cautious investor than before.

With tens or even hundreds of thousands being wiped off share portfolios and super funds it’s understandable that you might be asking yourself …

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How Much To Invest In Each Company In Your Portfolio

How Much To Invest In Each Company In Your Portfolio

By Paul Nojin

The Super Investor

9 am September 6, 2020

If you wish to be a successful investor there are various things you really need to know.

The first important thing you need to know is how much to invest in each company you add to your portfolio.

There is a correct answer, one based on science.

The answer is, in general, you should not invest any more than 6% in a single stock.

Why?

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MARKETS

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