Check out what's trending in the world of equity research this week...
Companies: CAR, CTH, FCR, GRI, MYSL, ODX, CAKE, PLUS, TET, VP/
Upbeat AGM statement, nudging up FY forecasts | MySale Plc | MYSL
Zeus Capital, 29 November
"MySale has released a positive AGM statement noting a good start to the year with revenue growth continuing at rates similar to that seen in the second half of last year (c.10%) as well as increased EBITDA guidance for the full year. As expected gross margin is substantially improved, while investment continues in the technology platform in terms of data and analytics which is expected to drive further improvements in marketing efficiency..."
A decade of revenue and profit growth | Patisserie Holdings Plc | CAKE
finnCap, 29 November
"Recent share price weakness presents a good entry point on the back of today's strong FY16 numbers. We retain our 350p price target and BUY."
Cyprus regulator issues new guidelines | Plus500 Ltd | PLUS
Liberum, 2 December
"On the 30th Nov'16, the Cyprus Securities & Exchange Commission (CySEC) issued a notice to all Cyprus Investment Firms (CIFs), in response to a paper published by ESMA, on the application of rules governing the marketing and sale of CFD's and other leveraged financial products, under MiFiD..."
Final results in line, further progress on PRS investment pipeline | Grainger Plc | GRI
N+1 Singer, 1 December
"Grainger has reported FY16 final results this morning with key NNNAV and recurring PBT metrics in line with our forecasts. Sales performance and rental income growth was strong in H2, as previewed in the positive FY trading update driving our 19% PBT upgrade in early October (11/10). The PRS investment pipeline continues to grow now standing at £389m secured and £347m in legals as Grainger pursues an £850m investment target by 2020. A 3.05p final dividend is in line with the revised policy to distribute 50% net rental income. The shares continue to trade on a significant, and unwarranted, 20%+ discount to NNNAV. We reiterate our BUY recommendation..."
FY results expected to highlight positive outlook | Caretech Holdings Plc | CTH
Panmure Gordon & Co, 2 December
"We expect CareTech to report FY results to September on 8th December. A positive trading update in October indicated that performance for the year was in line with market expectations therefore we are focusing on the outlook. We expect a confident statement since the end of 2016 showed positive trends across fee rates, expansion in places and occupancy. We believe CareTech is well positioned for further expansion, and remains at an attractive valuation. We retain our BUY and 380p price target..."
Staying sweet | Treatt | TET
Edison, 30 November
"Results have yet again beaten our forecasts and the management has now delivered the fourth consecutive year of earnings above expectations. The share price is up 41% over the last three months, and Treatt is steadily moving from commoditised sales to more value-added products. Its strategy of deep customer relationships is paying off, giving it a real competitive advantage and improving margins. The year finished strongly and momentum is due to continue in the traditionally seasonally weaker Q117. Our P&L forecasts are broadly maintained, but our fair value moves to 272p (from 240p) as a result of stronger cash flow..."
Innovate, specialise, integrate, globalise | Carclo | CAR
Edison, 1 December
"Carclo has refocused investment in its established businesses (Technical Plastics and LED Technologies), where a differentiated offer and long-term relationships with customers provide good earnings visibility and more certainty of a return. This strategy delivered strong revenue and profits growth during H117. This growth appears set to continue, underpinned by long-term relationships with blue-chip customers. We leave our estimates and indicative valuation broadly unchanged and introduce our estimates for FY19..."
Excellent 1st half drives profit upgrades | VP Plc | VP/
Equity Development, 29 November
"M&A fever is gripping the equipment rental industry. The starting gun fired over the summer after news broke that activist investor Toscafund was trying (& still is) to push Speedy Hire and HSS to merge. Then, a fortnight ago Avesco agreed to be snapped up by NEP Group for £124m (or 650p/share), equivalent to prospective multiples of 15.5x EV/EBIT and 25x earnings. And finally, last week Lavendon (LVD) rejected an opportunistic bid from Belgium’s TVH Group, pitched at 205p/share (or £349m), representing to a take-out price of 10.5x EV/EBIT – with the stock now at 217p, following rival interest from Loxam SAS yesterday..."
Food intolerance driving growth | Omega Diagnostics Group Plc | ODX
Hardman & Co, 29 November
"Omega Diagnostics Group has an established core business providing high quality in vitro diagnostic tests within three core areas of competence – Food Intolerance, Allergy & Autoimmune, Infectious Disease – that are sold in over 100 countries. The group offers steady low single-digit growth which is profitable and cash generative. Investment in new products has seen the launch of a new panel of automated allergy tests and progress on Visitect CD4 for monitoring of HIV positive patients. Interim results highlighted the opportunities to accelerate growth of the business, particularly Allersys, which has drawn attention from its partner..."
Iron ore and more... | Ferrum Crescent Ltd | FCR
Beaufort Securities, 2 December
"Following corporate restructuring in 2016, Ferrum Crescent’s new management is focusing on its two main projects, zinc in Spain and the Moonlight magnetite project in Limpopo. At Moonlight, under previous management Ferrum completed a PFS and obtained a 30-year mining right. The current plan is to produce a “reduced cost model”, which will primarily look to lower upfront capex and should improve project economics. This, along with continued engagement with potential South African based strategic partners, should help unlock Moonlight’s value. Management’s greatest impact thus far was its GoldQuest acquisition earlier this year. As a result, Ferrum now owns (100%) of the highly prospective Toral and Lago zinc deposits in Spain. Toral has been partially explored before and comes with 42,000m of deep diamond drilling and c.9Mt resources. Management believes a re-interpretation of the geological model and additional drilling could add significant shallow resources. Drilling is planned at Toral for H1 2017."