Australian Broker Call *Extra* Edition – Mar 11, 2019

This story features ADAIRS LIMITED, and other companies. For more info SHARE ANALYSIS: ADH

Part One of a Two-Step Extra Edition of the Broker Call Report highlighting some of the stand-out smaller cap stocks that caught FNArena's attention during the February 2019 reporting season.

An additional news report on the recommendation, valuation, forecast and opinion changes for ASX-listed equities.

In addition to The Australian Broker Call Report, which is published and updated daily (Mon-Fri), FNArena has now added The Australian Broker Call *Extra* Edition, featuring additional sources of research and insights on ASX-listed stocks, also enlarging the number of stocks that make up the FNArena universe.

One key difference is the *Extra* Edition will not be updated daily, but merely "regularly" depending on availability of suitable quality content. As such, the *Extra* Edition tries to build a bridge between daily updates via the Australian Broker Call Report and ad hoc news stories, that are not always timely for investors hungry for the next information update.

Investors using the *Extra* Edition as a source of input for their own share market research should thus take into account that information after publication may not be up to date, or yet awaiting another update by FNArena's team of journalists.

Similar to The Australian Broker Call Report, this *Extra* Edition includes concise but limited reviews of research recently published by Stockbrokers and other experts, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end of this Report.

The Australian Broker Call *Extra* Edition is a summary that has been prepared independently of the sources identified. Readers will check the full text of the recommendations and consult a Licenced Advisor before making any investment decision.

The copyright of this Report is owned by the publisher. Readers will not copy, forward or disseminate this Report to any other person. For more vital information about the sources included, see the bottom of this Report.

COMPANIES DISCUSSED IN THIS ISSUE

Click on a symbol for fast access.
The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)

ADH   ANG   ARQ   ASL   BTH   CAT   CGL   CGR   CRD   CUP   ENN   EQT   FLC (2)   IFM   IGL   IMD   JAN   LVT   LYL   MAI  

ADH    ADAIRS LIMITED

Furniture & Renovation – Overnight Price: $1.89

E.L. & C Baillieu rates ((ADH)) as Hold (3) –

Adairs reported a 9.1% increase in first half net profit, which was largely in line with Baillieu forecasts. Operating margins declined -50 basis points because of slightly higher costs. The main area of weakness, the broker observes, is cash flow.

The broker believes the company has a well articulated strategy, generating both solid cash flow from operations and high returns on capital.

The strong financial position is enabling an increased pay-out ratio that still leaves room for capital management initiatives. Nevertheless, headwinds from the challenging retail conditions subdue the broker's enthusiasm. Hold rating maintained. Target is raised to $2.08 from $1.84.

This report was published on February 26, 2019.

Target price is $2.08 Current Price is $1.89 Difference: $0.19
If ADH meets the E.L. & C Baillieu target it will return approximately 10% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

E.L. & C Baillieu forecasts a full year FY19 dividend of 15.50 cents and EPS of 19.50 cents.
At the last closing share price the estimated dividend yield is 8.20%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.69.

Forecast for FY20:

E.L. & C Baillieu forecasts a full year FY20 dividend of 16.00 cents and EPS of 20.80 cents.
At the last closing share price the estimated dividend yield is 8.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.09.

Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

ANG    AUSTIN ENGINEERING LIMITED

Mining Sector Contracting – Overnight Price: $0.22

Wilsons rates ((ANG)) as Buy (1) –

Austin Engineering has been building positive momentum over the past two years and Wilsons notes another significant improvement in the underlying quality of reported earnings in the first half.

The broker believes the business has been sized right and now has the base for strong growth, as efficiencies and cost savings deliver.

As the maintenance cycles of miners are now unrealistically stretched, this signals to Wilsons that capital expenditure should lift from current lows.

The broker believes the company's real value lies in its core engineering skills, IP range and the long-term relationships it has with miners and global procurement teams.

Wilsons assesses, as the stock is perfectly positioned for recovery, the valuation is fundamentally cheap and retains a Buy rating and $0.36 target.

This report was published on March 4, 2019.

Target price is $0.36 Current Price is $0.22 Difference: $0.14
If ANG meets the Wilsons target it will return approximately 64% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

Wilsons forecasts a full year FY19 dividend of 0.00 cents and EPS of 2.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.15.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 0.00 cents and EPS of 4.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.50.

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

ARQ    ARQ GROUP LIMITED

IT & Support – Overnight Price: $1.96

Wilsons rates ((ARQ)) as Buy (1) –

ARQ delivered a 2018 result in the mid-range of guidance. Management pointed to a strong pipeline for Enterprise Services and also suggested 5-6 key household brands are also close to cementing deals for digital investment.

Wilsons assumes double-digit growth for this division and also praises a move to de-merge the low quality domains business.

A demerger will improve the constitution of the group and free up capital for growth initiatives. Wilsons retains a $2.47 target with a conviction Buy rating. Report issued Feb 27, 2019.

Target price is $2.47 Current Price is $1.96 Difference: $0.51
If ARQ meets the Wilsons target it will return approximately 26% (excluding dividends, fees and charges).

Forecast for FY19:

Wilsons forecasts a full year FY19 dividend of 5.20 cents and EPS of 8.50 cents.
At the last closing share price the estimated dividend yield is 2.65%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.06.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 6.40 cents and EPS of 10.50 cents.
At the last closing share price the estimated dividend yield is 3.27%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.67.

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

ASL    AUSDRILL LIMITED

Mining Sector Contracting – Overnight Price: $1.64

Wilsons rates ((ASL)) as Buy (1) –

It was a solid "maiden" result from the new-look Ausdrill, Wilsons suggests. A reorganisation is underway at the company which the broker believes can result in a significant lift in operational performance and capital efficiencies, as well as "vastly" improved cash flows fom the larger, merged business.

Put this together with a backdrop of resurgent mining activity and already Ausdrill is showing signs of twice the sector rate of earnings growth while trading at a steep discount to a number of earnings multiples. The broker retains a "highly convicted" Buy on a 50% total shareholder return on valuation. Target unchanged at $2.40.

Report issued Feb 25, 2019.

Target price is $2.40 Current Price is $1.64 Difference: $0.76
If ASL meets the Wilsons target it will return approximately 46% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

Wilsons forecasts a full year FY19 dividend of 6.90 cents and EPS of 15.60 cents.
At the last closing share price the estimated dividend yield is 4.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.51.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 8.20 cents and EPS of 19.80 cents.
At the last closing share price the estimated dividend yield is 5.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.28.

Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

BTH    BIGTINCAN HOLDINGS LIMITED

Cloud services – Overnight Price: $0.42

Canaccord Genuity rates ((BTH)) as Buy (1) –

Bigtincan, a leader in cloud-based sales enablement SaaS, posted a strong result featuring a 63% increase in annual recurring revenue and beating Canaccord's forecast.

For the first time the company disclosed the metric of Portfolio Lifetime Value growth, which the broker notes is a critical metric as it indicates the long-term value created for shareholders and the underlying health of a business, and is used as a valuation proxy for maturing SaaS companies.

This came in at 91% and management reiterated the company is on track to deliver 35-40% revenue growth in FY19 with stable client retention. Canaccord believes this outlook to be conservative. Buy and 60c target retained. 

Report issued Feb 24, 2019.

Target price is $0.60 Current Price is $0.42 Difference: $0.18
If BTH meets the Canaccord Genuity target it will return approximately 43% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

Canaccord Genuity forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 2.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 17.50.

Forecast for FY20:

Canaccord Genuity forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 1.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 24.71.

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

CAT    CATAPULT GROUP INTERNATIONAL LTD

Medical Equipment & Devices – Overnight Price: $0.73

Canaccord Genuity rates ((CAT)) as Speculative Buy (1) –

Catapult's first half loss was in line with the broker's forecast and revenues met previously downgraded guidance. Cash flow was weak but post-raising the balance sheet is healthy. No dividend was paid as expected.

Management reiterated FY guidance for the core business but downgraded Prosumer guidance as anticipated. Lower assumed operating expenses leads to forecast earnings increases. First profit is still expected in FY21. Target rises 10% to $1.10. Speculative Buy retained.

Report issued Feb 22, 2019.

Target price is $1.10 Current Price is $0.73 Difference: $0.37
If CAT meets the Canaccord Genuity target it will return approximately 51% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

Canaccord Genuity forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 7.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 9.86.

Forecast for FY20:

Canaccord Genuity forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 4.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 16.22.

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

CGL    THE CITADEL GROUP LIMITED

IT & Support – Overnight Price: $7.29

Wilsons rates ((CGL)) as Upgrade to Buy from Hold (1) –

Wilsons has upgraded Citadel Group to Buy from Hold and raises the target to $8.25 from $8.00. The broker believes investors should take advantage of the correction in the stock that is more a function of personnel changes than earnings.

Wilsons now has a firmer position on the stock, after analysing the first half results. The prospect for more contracts to be gained in the near term is also encouraging, as up to $92m in opportunities have been identified over the next three years.

The broker believes margin compression in the company's software-as-a-service contract structure is a short-term phenomenon and reflects the lower recognition of revenue in the early phases of new projects.

Preliminary modelling signals that operating earnings (EBITDA) margin could trend towards 35% in FY22 if the company achieves its 200,000 seat target in FY20.

This report was published on March 6, 2019.

Target price is $8.25 Current Price is $7.29 Difference: $0.96
If CGL meets the Wilsons target it will return approximately 13% (excluding dividends, fees and charges).

Forecast for FY19:

Wilsons forecasts a full year FY19 dividend of 15.80 cents and EPS of 34.90 cents.
At the last closing share price the estimated dividend yield is 2.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.89.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 17.30 cents and EPS of 39.80 cents.
At the last closing share price the estimated dividend yield is 2.37%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.32.

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

CGR    CML GROUP LIMITED

Business & Consumer Credit – Overnight Price: $0.53

Canaccord Genuity rates ((CGR)) as Buy (1) –

CML Group reported in line with guidance, reflecting the work management has done to improve competitiveness and reduce financing costs, Canaccord suggests. FY guidance implies 40% earnings growth but the broker sees the real opportunities emerging in FY20-21 as CML expands into the much larger addressable market of invoice discounting.

With the banks finding it harder to write SME loans and CML's major competitor taken private, the broker believes opportunities abound. Buy and 72c target retained.

Report issued Feb 24, 2019.

Target price is $0.72 Current Price is $0.53 Difference: $0.19
If CGR meets the Canaccord Genuity target it will return approximately 36% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

Canaccord Genuity forecasts a full year FY19 dividend of 2.50 cents and EPS of 4.40 cents.
At the last closing share price the estimated dividend yield is 4.72%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.05.

Forecast for FY20:

Canaccord Genuity forecasts a full year FY20 dividend of 3.00 cents and EPS of 5.40 cents.
At the last closing share price the estimated dividend yield is 5.66%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.81.

Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

CRD    CREDIBLE LABS INC

Business & Consumer Credit – Overnight Price: $1.14

Moelis rates ((CRD)) as Buy (1) –

Moelis reiterates a Buy rating and increases the target to $1.50 from $1.47, factoring in higher closed loan volumes. Closed loan volume was up 40% in 2018 while revenue grew 33.5%.

Importantly, Moelis expects momentum to continue into 2019. The broker believes the business is strong and can capitalise on its first-mover advantage as a lender-integrated marketplace in the US mortgages, personal loans and student loans market.

Moreover, says Moelis, management has demonstrated an ability with execution in and the business is starting to realise the benefits of its network.

This report was published on March 1, 2019.

Target price is $1.50 Current Price is $1.14 Difference: $0.36
If CRD meets the Moelis target it will return approximately 32% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY19:

Moelis forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 7.22 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 15.78.

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 7.09 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 16.09.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

CUP    COUNTPLUS LIMITED

Commercial Services & Supplies – Overnight Price: $0.56

Wilsons rates ((CUP)) as Buy (1) –

A strong margin and operating cash result suggests to Wilsons Countplus' turnaround program is a success. Improvements were noted across a number of key business drivers. Two surprises were forthcoming: an unexpected dividend and an announced acquisition, the latter not expected by the broker until FY20.

With improving fundamentals before a highly supportive regulatory backdrop, Wilsons believes Countplus is well placed to enjoy significant earnings growth and retains a Buy rating. Revised target $1.01.

Report issued Feb 24, 2019.

Target price is $1.01 Current Price is $0.56 Difference: $0.45
If CUP meets the Wilsons target it will return approximately 80% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

Wilsons forecasts a full year FY19 dividend of 2.20 cents and EPS of 3.20 cents.
At the last closing share price the estimated dividend yield is 3.93%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.50.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 3.10 cents and EPS of 4.80 cents.
At the last closing share price the estimated dividend yield is 5.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.67.

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

ENN    ELANOR INVESTORS GROUP

Wealth Management & Investments – Overnight Price: $1.72

Moelis rates ((ENN)) as Buy (1) –

First half distributable earnings were ahead of Moelis estimates. The result did include a $2.2m gain on the sale of investments, which is a one-off.

The broker notes it was another active half-year of new fund initiatives, with over $200m added during the period. With an active pipeline, the company is confident it can deliver attractive returns to investors.

Still, successful execution is required, in the broker's opinion, for the share price to re-rate. Moelis believes the market is attributing around $7m in value to the company's funds management business, which is significantly undervaluing it.

Moelis maintains a Buy rating and reduces the target to $2.20 from $2.23.

This report was published on February 19, 2019.

Target price is $2.20 Current Price is $1.72 Difference: $0.48
If ENN meets the Moelis target it will return approximately 28% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

Moelis forecasts a full year FY19 dividend of 16.00 cents and EPS of 18.90 cents.
At the last closing share price the estimated dividend yield is 9.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.10.

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 16.50 cents and EPS of 17.70 cents.
At the last closing share price the estimated dividend yield is 9.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.72.

Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

EQT    EQUITY TRUSTEES LIMITED

Diversified Financials – Overnight Price: $26.01

Wilsons rates ((EQT)) as Buy (1) –

Another strong set of accounts from EQT Holdings increases Wilsons' confidence FY19 guidance can be achieved. Management, typically conservative, sees positive trends continuing for the foreseeable future, based on prospects within domestic super. EQT has acquired Zurich's superannuation trustee business.

This is small in context, Wilsons notes, but the pipeline of similar deals is large and offering meaningful growth. Such optionality is not yet priced in, the broker believes. Target rises 3.1% to $26.77, Buy retained.

Report issued Feb 27, 2019.

Target price is $26.77 Current Price is $26.01 Difference: $0.76
If EQT meets the Wilsons target it will return approximately 3% (excluding dividends, fees and charges).

Forecast for FY19:

Wilsons forecasts a full year FY19 dividend of 95.50 cents and EPS of 112.00 cents.
At the last closing share price the estimated dividend yield is 3.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.22.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 108.00 cents and EPS of 127.00 cents.
At the last closing share price the estimated dividend yield is 4.15%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.48.

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

FLC    FLUENCE CORPORATION LIMITED

Industrial Sector Contractors & Engineers – Overnight Price: $0.37

Canaccord Genuity rates ((FLC)) as No Rating (-1) –

Canaccord's Colts research focuses on early-stage ASX-listed microcap companies with lots of promise. One of such companies, the analysts believe, is Fluence Corp, having recently announced a big contract to build a water treatment plant in Abidjan, Ivory Coast, contract value of EUR165m (US$187m) with an estimated two years to finalise construction.

The analysts point out, the contract is conditional upon export credit financing from the Israeli Export Credit Agency (ASHRA); discussions are said to be at an advanced stage. Furthermore, there is potential for additional revenues if the company also wins the operations and maintenance contract.

It appears the 2018 result had a few nasty surprises, caused by the collapsing Argentinian Peso, among other things, but the analysts are not concerned. Instead, they note management expects to become EBITDA positive in Q4 2019, and the new Ivory Coast contract could bring this forward to Q3 2019 if it starts on time. Target price increases by 6c to 92c.

This report has been released on 4 March 2019.

Target price is $0.92 Current Price is $0.37 Difference: $0.55
If FLC meets the Canaccord Genuity target it will return approximately 149% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY19:

Canaccord Genuity forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 1.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 24.68.

Forecast for FY20:

Canaccord Genuity forecasts a full year FY20 dividend of 0.00 cents and EPS of 6.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.17.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

---

Edison Investment Research rates ((FLC)) as No Rating (-1) –

The company has won a EUR165m (US$188m) contract to provide water treatment to Abidjan, the largest city in Ivory Coast. Edison Investment Research believes this turnkey project, designed to supply 150,000m3/day of water to 4.7m people, will prove "transformative" for the company.

The analysts have doubled their adjusted EPS forecast for FY20 to US3.8c. In terms of valuation, Edison suggest a DCF approach that reflects the growth and margins the analysts believe Fluence is ultimately capable of suggests an $0.75 per share valuation, which is double the current share price.

This report was released on 4 March 2019.

Current Price is $0.37. Target price not assessed.

Forecast for FY19:

Edison Investment Research forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 0.27 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 135.53.

Forecast for FY20:

Edison Investment Research forecasts a full year FY20 dividend of 0.00 cents and EPS of 5.18 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.14.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

IFM    INFOMEDIA LTD

Automobiles & Components – Overnight Price: $1.63

E.L. & C Baillieu rates ((IFM)) as Buy (1) –

After a period of accelerated investment, Baillieu considers the business at an important point where future contract gains and acquisitions should have an amplified impact on earnings, in a positive way.

Thus, sustained revenue and earnings growth is expected. The business is well capitalised and acquisitions continue to be targeted. The first half result was in line with the broker's forecasts and further contracts should mean strong earnings leverage.

Buy rating maintained. Target rises to $1.70 from $1.30. The broker increases estimates by 2-3% over the forecast period.

This report was published on February 26, 2019.

Target price is $1.70 Current Price is $1.63 Difference: $0.07
If IFM meets the E.L. & C Baillieu target it will return approximately 4% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

E.L. & C Baillieu forecasts a full year FY19 dividend of 3.80 cents and EPS of 5.20 cents.
At the last closing share price the estimated dividend yield is 2.33%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.35.

Forecast for FY20:

E.L. & C Baillieu forecasts a full year FY20 dividend of 4.60 cents and EPS of 6.20 cents.
At the last closing share price the estimated dividend yield is 2.82%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.29.

Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

IGL    IVE GROUP LIMITED

Media – Overnight Price: $2.26

Shaw and Partners rates ((IGL)) as Buy (1) –

Shaw and Partners finds IVE Group a reliable stock, with margin improvement demonstrated in the first half amid solid operating cash flow.

A dividend was declared at 8.6c per share, generating an annualised 7.5% yield. Moreover, the balance sheet is de-leveraging.

The broker is pleased management has delivered on its promises and now, with a decreased expenditure profile, there is more flexibility. Shaw and Partners has a Buy rating and $2.89 target.

This report was published on March 6, 2019.

Target price is $2.89 Current Price is $2.26 Difference: $0.63
If IGL meets the Shaw and Partners target it will return approximately 28% (excluding dividends, fees and charges).

Forecast for FY19:

Shaw and Partners forecasts a full year FY19 dividend of 16.30 cents and EPS of 23.10 cents.
At the last closing share price the estimated dividend yield is 7.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.78.

Forecast for FY20:

Shaw and Partners forecasts a full year FY20 dividend of 18.30 cents and EPS of 25.30 cents.
At the last closing share price the estimated dividend yield is 8.10%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.93.

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

IMD    IMDEX LIMITED

Mining Sector Contracting – Overnight Price: $1.13

Canaccord Genuity rates ((IMD)) as Buy (1) –

Canaccord Genuity envisages potential upside to medium-term forecasts and does not model earnings from three new technologies. There is also no cash flow incorporated from possible sale of VES.

The stock is trading on 12.5x FY20 forecast, with a net cash position of $20.6m, and should benefit from recent improvements in global capital markets and the gold price, in the broker's view.

Canaccord Genuity was impressed with the revenue growth in the first half as well as the strength in margins and the re-implementation of the dividend policy. Moreover, growth may ease in coming periods but should remain at an impressive level.

Buy rating maintained. Target is raised to $1.35 from $1.28. This report was published on February 18, 2019.

Target price is $1.35 Current Price is $1.13 Difference: $0.22
If IMD meets the Canaccord Genuity target it will return approximately 19% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

Canaccord Genuity forecasts a full year FY19 dividend of 1.60 cents and EPS of 7.70 cents.
At the last closing share price the estimated dividend yield is 1.42%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.68.

Forecast for FY20:

Canaccord Genuity forecasts a full year FY20 dividend of 1.90 cents and EPS of 9.40 cents.
At the last closing share price the estimated dividend yield is 1.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.02.

Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

JAN    JANISON EDUCATION GROUP LIMITED

Education & Tuition – Overnight Price: $0.37

Bell Potter rates ((JAN)) as Buy (1) –

The building phase of many of the first half investments is nearing completion and the company has signalled revenue growth should accelerate. Importantly, Bell Potter notes, historical gross margins are expected to be restored in the second half of FY19.

The company expects robust profit growth in the second half will offset the underwhelming first half and has guided to $2m in trading operating earnings (EBITDA).

Bell Potter notes digitisation of the learning industry is in its infancy and this creates a large market opportunity for the company.

Janison's ability to leverage market-leading technology and capitalise on a first-mover advantage builds a compelling investment case, in the broker's opinion.

The disappointment in the first half is considered to be a blip on the record. Bell Potter retains a Buy rating and $0.50 target.

This report was published on February 28, 2019.

Target price is $0.50 Current Price is $0.37 Difference: $0.13
If JAN meets the Bell Potter target it will return approximately 35% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

Bell Potter forecasts a full year FY19 dividend of 0.00 cents and EPS of 0.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 74.00.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 0.00 cents and EPS of 1.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.13.

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

LVT    LIVETILES LIMITED

Cloud services – Overnight Price: $0.41

Wilsons rates ((LVT)) as Sell (5) –

Wilsons found more clarity on revenue and the bottom line in the final report for the first half. LiveTiles had pre-released figures and the first half missed the broker's expectations.

Wilsons remains concerned about operating efficiency as cash burn is substantial, as is operating expenditure. The valuation is at a premium to its peers, as LiveTiles trades at 12.6x enterprise value/subscription revenue for FY19 estimates.

Wilsons does not believe this is justified and reiterates a Sell rating. Target is reduced to $0.24 from $0.26. The broker suspects the company will continue to consume more working capital and will need to come to the market again. Wilsons factors in a $20m raising in FY20.

The broker wants signs of efficiencies in order to become more constructive on the stock.

This report was published on March 1, 2019.

Target price is $0.24 Current Price is $0.41 Difference: minus $0.17 (current price is over target).
If LVT meets the Wilsons target it will return approximately minus 41% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY19:

Wilsons forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 5.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 8.04.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 3.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 12.06.

Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

LYL    LYCOPODIUM LIMITED

Mining Sector Contracting – Overnight Price: $5.30

DJ Carmichael rates ((LYL)) as Accumulate (2) –

Strong margin expansion and reduced operating costs led Lycopodium to strong earnings growth in the first half, DJ Carmichael notes, despite lower revenues due to the completion of a number of key projects. The broker nevertheless expects the company to win new engineering procurement contracts over the next few years, with the Monadelphous ((MND)) JV opening the door to larger projects.

A delay to the start of Perseus Mining's ((PRU)) Yaoure gold project may impact on second half earnings, but at least a small share of work is expected to be won as the iron ore majors ramp up Pilbara expansions. DJ Carmichael retains an Accumulate rating. Target rises to $5.38 from $5.22.

This report was released on 1 March 2019.

Target price is $5.38 Current Price is $5.30 Difference: $0.08
If LYL meets the DJ Carmichael target it will return approximately 2% (excluding dividends, fees and charges).

Forecast for FY19:

DJ Carmichael forecasts a full year FY19 dividend of 30.00 cents and EPS of 43.90 cents.
At the last closing share price the estimated dividend yield is 5.66%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.07.

Forecast for FY20:

DJ Carmichael forecasts a full year FY20 dividend of 30.00 cents and EPS of 46.50 cents.
At the last closing share price the estimated dividend yield is 5.66%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.40.

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

MAI    MAINSTREAM GROUP HOLDINGS LTS

Diversified Financials – Overnight Price: $0.57

E.L. & C Baillieu rates ((MAI)) as Buy (1) –

Mainstream Group has assembled a global footprint in funds administration. Baillieu considers the business is well-placed to win new clients across all jurisdictions, notably in custody and in the US.

The valuation is considered attractive as the stock is trading on an underlying cash PE of 15.0x for FY19 forecasts.

First half operating earnings (EBITDA) were in line with forecasts, with the interim dividend being higher than expected and reported profit lower than expected. Guidance is unchanged for $7.5-9.0m in operating earnings. Baillieu retains a Buy rating and $0.80 target.

This report was published on February 19, 2019.

Target price is $0.80 Current Price is $0.57 Difference: $0.23
If MAI meets the E.L. & C Baillieu target it will return approximately 40% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

E.L. & C Baillieu forecasts a full year FY19 dividend of 1.60 cents and EPS of 0.70 cents.
At the last closing share price the estimated dividend yield is 2.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 81.43.

Forecast for FY20:

E.L. & C Baillieu forecasts a full year FY20 dividend of 1.60 cents and EPS of 1.60 cents.
At the last closing share price the estimated dividend yield is 2.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 35.62.

Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

TO BE CONTINUED IN PART TWO (TOMORROW)

---

Disclaimer:
The content of this information does in no way reflect the opinions of FNArena, or of its journalists. In fact we don't have any opinion about the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe and comment on. By doing so we believe we provide intelligent investors with a valuable tool that helps them in making up their own minds, reading market trends and getting a feel for what is happening beneath the surface. This document is provided for informational purposes only. It does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. FNArena employs very experienced journalists who base their work on information believed to be reliable and accurate, though no guarantee is given that the daily report is accurate or complete. Investors should contact their personal adviser before making any investment decision.

As part of emerging new trends overseas, The Australian Broker Call *Extra* Edition also includes providers of sponsored research. Readers should bear in mind, sponsored research, while not necessarily of lower quality, has the embedded complication that the company that is the subject of the research has paid for this research. Providers of sponsored research that can potentially be included in this Report are Breakaway Research, Edison Investment Research, NDF Research, Pitt Street Research, and TMT Analytics.

Decisions about inclusions in this Report are made independently of the providers of stock market research and at full discretion of the team of journalists responsible for content at FNArena. Inclusion does not equal endorsement, in any way, shape or form. This Report is provided for informational purposes only.

Click to view our Glossary of Financial Terms