Australian Broker Call *Extra* Edition – May 16, 2019

Daily Market Reports | May 16 2019

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)

AGI   AHX   BTH   CAT   CCP   CGC   CRD   CUP   DN8   EPD   TNE  

AGI    AINSWORTH GAME TECHNOLOGY LIMITED

Gaming - Overnight Price: $0.81

Wilsons rates ((AGI)) as Sell (5) -

Ainsworth Game Technology can't seem to win a trick and its outlook is unlikely to improve without a white knight, says Wilsons.

The broker notes weak demand has resulted in slot buyers cutting capital expenditure, a state of affairs compounded by AGI's product's poor popularity. It believes the company is trapped in a spiral of limited research and development expenditure relative to peers, which in turn leads to weaker machine sales.

Sales fell -50% in the year to date and Ainsworth slipped to 6th supplier in the March quarter, triggering further downgrades.? Wilsons sets its estimates about -19% below consensus and assumes a steep decline in FY19 earnings.

Sell rating. Target price sits at 67c.

This report was published on May 6, 2019.

Target price is $0.67 Current Price is $0.81 Difference: minus $0.14 (current price is over target).
If AGI meets the Wilsons target it will return approximately minus 17% (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 9.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.53.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 2.00 cents and EPS of 3.50 cents.
At the last closing share price the estimated dividend yield is 2.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.14.

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

AHX    APIAM ANIMAL HEALTH LTD

Medical Equipment & Devices - Overnight Price: $0.41

Shaw and Partners rates ((AHX)) as Buy (1) -

Shaw and Partners has revised down Apiam Animal Health's target price to 90c from $1 after the company's third-quarter trading update.

Despite a strong result (revenue rose 9% in the quarter and gross profit rose 13%), the broker says phasing and weather factors are likely to persist in creating uneven revenue patterns across quarters.

Shaw lowers forecasts for FY19 citing drought concerns and its affects on the rain-dependent dairy industry; the affects of Autumn temperatures in feedlots on respiratory disease;  and respiratory conditions in the pig industry during winter. 

Shaw expects strong gross margins in the long term and points to the Chinese sheep genetic project, and Apiam's US joint venture. The broker says the company has a strong platform in place which can now be leveraged to support more than 2x sales, and expects a re-rating of the stock. Buy rating retained.

This report was published on April 30, 2019.

Target price is $0.90 Current Price is $0.41 Difference: $0.49
If AHX meets the Shaw and Partners target it will return approximately 120% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY19:

Shaw and Partners forecasts a full year FY19 dividend of 1.80 cents and EPS of 4.90 cents.
At the last closing share price the estimated dividend yield is 4.39%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.37.

Forecast for FY20:

Shaw and Partners forecasts a full year FY20 dividend of 1.90 cents and EPS of 6.30 cents.
At the last closing share price the estimated dividend yield is 4.63%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.51.

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: $0.59

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

The company is eying at least one acquisition but Canaccord Genuity is refusing to account for it in its current modeling. The model has been updated for the recent 1-for-6 share placement. Meanwhile, or so it appears, the company's core operations are growing fast as ever.

New contract wins have been announced with Mohawk Industries, Cisco, Scoot, and Pentair. The analyst has a buoyant outlook for the industry and for this company in particular and refers to research by Aragon Research to support its thesis. According to Aragon, the global sales enablement software marketing (on-premise and cloud) is expected to increase to US$5bn by 2021 from US$1bn.

The combination of increasing medium-term forecasts (ex potential acquisition) and rolling forward the model has pushed up the share price target to 75c from 60c prior. Canaccord Genuity views the capital raise as a significant milestone that strengthens the company's "competitive moat" while also allowing it to extend its product leadership position.

This report was published on May 14, 2019.

Target price is $0.75 Current Price is $0.59 Difference: $0.16
If BTH meets the Canaccord Genuity target it will return approximately 27% (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 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 29.50.

Forecast for FY20:

Canaccord Genuity forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 29.50.

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


The full story is for FNArena subscribers only. To read the full story plus enjoy a free two-week trial to our service SIGN UP HERE

If you already had your free trial, why not join as a paying subscriber? CLICK HERE

MEMBER LOGIN