Our 'Best Calls to Action' aim to navigate you through the current reporting season by showcasing stocks with strong buying potential. They also offer insights into stocks that might not be ideal for growth right now. These recommendations come from thorough analysis of market trends, financial health, and growth potential, ensuring you access high-value investment opportunities.
Happy to buy today
MA Financial Group (ASX:MAF) - Earnings appear to have bottomed
MAF’s 1H24 NPAT (A$18m) was down -27% on the pcp, but it was broadly in line with Bloomberg consensus (A$20m). The 1H24 dividend (A6cps) was above consensus (A5cps). While this was a difficult result, MAF's outlook commentary points to EPS being materially stronger in 2H24 vs 1H24, and earnings appear to have bottomed.
We maintain our ADD rating.
Inghams (ASX:ING) - Woolworths contract spooks the market
Despite volumes being stronger than expected, ING’s FY24 result missed our forecast and consensus, likely due to lower prices in the wholesale channel in the 2H24. FY24 was a record result for ING despite weakness in out-of-home channels due to cost-of-living pressures. FY25 EBITDA guidance was also weaker than consensus estimates, however on a like for like basis (52 vs 53 weeks in FY24) and including a phased reduction in Woolworths (WOW) volumes under a new contract, ING is expecting flat to up to 6% growth.
We maintain our ADD rating.
Clinuvel Pharma. (ASX:CUV) - Potential short term trading opportunity
CUV’s share price has retreated significantly since our last update. So what has happened, and is there an opportunity? CUV provided a progress update on its Ph3 Vitiligo study, highlighting challenges in patient retention and recruitment. Consequently, protocol adjustments have been made, extending the recruitment timeline by approximately six months. A small negative, but adds another mark on the wrong side of the ledger. More pressing concerns include an ineffective/absent buy-back; board and management changes; and poor segmental performance disclosure. Despite all this, we continue to view the underlying asset in EPP as solid and will remain competition free for several more years over which time the cash backing should continue to build and one or more indications realised.
We adjust to ADD rating.
Jumbo Interactive (ASX:JIN) - FY24 earnings: No pain, no gain
JIN’s FY24 result exceeded consensus and our earnings expectations by 2%, driven by an exceptionally strong period in Lottery Retailing, which grew 40% yoy. However, the market was caught off guard by JIN’s guidance for softer margins in FY25, primarily due to a slowdown in Stride.
We maintain our ADD rating.
Wagners (ASX:WGN) - Refocused to grow the core materials business
As largely outlined within the trading update of Jul-24, WGN has delivered FY24 Operating EBIT of $39.7m, up 81% on the pcp, exceeding the upper end of the prior guidance range. The business benefited from strong operating conditions through the final months of 2H24, resulting in a Construction Materials EBIT margin of 16.4%, 330bps higher than 1H24 and 590 bps above the pcp.
We maintain our ADD rating.
VEEM (ASX:VEE) - Multiple growth avenues
VEE’s FY24 result was ahead of expectations and management’s guidance. All divisions generated strong revenue growth (Propulsion +30%, Gyros +146%, Defence +23%, Engineering Products & Services +17%) with margin improvement a key highlight reflecting efficiency benefits and good cost control. We make minor changes to earnings forecasts with FY25-27F EBITDA increasing by between 0-2% while underlying NPAT remains unchanged.
We maintain our ADD rating.
Accent Group (ASX:AX1) - FY24 earnings: Picking up the pace
AX1 achieved positive growth in sales in FY24, despite the challenging retail environment and a poor wholesale performance. Earnings were down yoy due to sales growth tracking below the rate of cost inflation (as well as material non-recurring costs relating to Glue), but this was in line with the guidance given in July. An improving retail and wholesale sales trajectory, moderating cost inflation and the elimination of some of the losses in Glue, will combine to see earnings recover in FY25.
We maintain our ADD rating.
Cedar Woods Prop. (ASX:CWP) - Strong demand for affordable residential land
On 21-Aug, CWP announced FY24 NPAT of $40.5m, up 28% (vs pcp) and above both the guidance range of $36m - $39m and our prior forecast of $37.8m. The key contributor was the sale of the William Land Shopping Centre, with lot revenue and gross profit broadly stable. Looking forward, the signs are positive, with guidance for +10% NPAT growth in FY25, supported by favorable operating conditions in most key states.
We maintain our ADD rating.
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