See what was trending on Research Tree this week
Companies: ACSO, BUR, IGR, IQE, SPE, TED, TLW, FAN
IQE Plc (IQE) | N+1 Singer, 24 March
"IQE’s FY’16 results showed good growth in all key segments and came in c.4% ahead of our recently upgraded forecasts. We have upgraded our forecasts today by 5% and 3% in FY’17 and FY’18 respectively, but expect the upgrade cycle to continue. The increase in capex in FY’16 looks to us a strong indication of future volume increases, and we see scope for significant upgrades through the course of our forecast horizon. We highlight three opportunities in this note, each of which could materially move the needle in its own right. IQE is one of our key picks for 2017 and has performed strongly YTD (+48%), but we believe there is more to go for. We increase our target price to 76p and retain our Buy recommendation..."
Bang to rights
Tullow Oil (TLW) | Panmure Gordon, 21 March
"Tullow unexpectedly announced a US$750m rights issue on Friday at a 45.2% discount to the previous close. While this step confirms our investment thesis, the scale of the discount and the timing look like a slap in the face for investors and/or indicative of a weaker financial position than we are modeling. We publish revised estimates to reflect the impact of the issue and cut our Target Price to 215p per share (from 245p). We maintain our Hold recommendation..."
Strong FY results driven by improving H2 trends
Ted Baker (TED) | Liberum, 23 March
"Ted has announced strong FY results with PBT up 12.1% to £65.8m, a touch ahead of our forecasts, on sales growth of 16.4% (10.8% at cc). The company has seen further advances in the brand and has benefited from multiple routes to market via Retail, Wholesale and Licensing, increasingly complemented by online, now 18% of Retail sales..."
Accesso Technology (ACSO) | Whitman Howard, 21 March
"accesso has released strong FY2016 Results which are marginally ahead of our expectations, this also follows the recent trading update at which it upgraded profitability figures. This is an impressive performance considering that 2016 has been a year of investment, not to mention the challenging trading conditions experienced in key summer months. This places accesso well for continued expansion in a significant and expanding global market..."
Or, helping a juggernaut turn on a dime
Sopheon (SPE) | Progressive Equity Research, 24 March
"Sopheon has spent many years evolving a state-of-the-art platform allowing Enterprise customers to manage and monitor their pipelines of innovation. As this market matures and on the back of some major reference client wins, Sopheon’s Accolade product is beginning to see material success on a number of fronts. This note describes the marketplace, the technology, and the progress now being achieved..."
IG Design Group (IGR) | Edison, 24 March
"IG Design has had a very good second half trading and has issued a year-end update indicating that numbers will exceed market estimates. We have lifted our FY17 and FY18 numbers by 8-10% at the pre-tax and EPS levels, following an 11% uplift to earnings with the interims. Particularly notable is the comment on strong cash flow, with the group reaching its target of average leverage less than 2.5x EBITDA two years ahead of plan. With the earnings and cash flow momentum, strong balance sheet and progressive dividend, there is good potential for further share price upside..."
Volution Group (FAN) | Edison, 24 March
"Investment – organic and inorganic – is a key theme of Volution’s H117 results, contributing to healthy y-o-y growth. Volution has the financial capacity to continue this strategy and, in more mixed market conditions, acquisitions may be more significant drivers for premium earnings growth..."
Burford Capital (BUR) | Hardman & Co, 20 March
"Burford’s results for 2016 produced another outstanding set of figures. Revenue grew by 60% to $163.4m with strong growth in the litigation finance business and an additional boost from a secondary sale in the Petersen case. On an underlying basis net income grew to $114m, a 75% increase despite the investment in growing capacity which increased costs. A combination of ongoing investment and gains and increases on valuation saw the fair value of the litigation assets increase 67% to $559m, underpinned by a growth in invested capital to $394m. With the results statement there was an announcement of a further sale of 9% of the Petersen case at a valuation of 20 times the cost of investment..."
