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
The Lottery Corporation (ASX:TLC) - FY24 earnings: 4.75 million and counting
FY24 earnings met our expectations, with the top line rising 14% yoy following a particularly strong period for the Lotteries segment. Strong Lotteries margins offset a decline in Keno profitability. NPAT exceeded our forecast by 1%, reaching $412m.
We maintain our ADD rating.
Superloop (ASX:SLC) - Buff enough to crack 100m in record time
Despite posting great numbers and impressive growth in FY24 it looks like FY24 was just the warm-up year. FY25 guidance is for underlying EBITDA to grow ~55% to ~$86m (FY25 guidance is unchanged at the mid-point but has upside risk). We see a bull case for SLC to crack $100m, subject to all things going well.
We maintain our ADD rating.
Hotel Property Investments (ASX:HPI) - Solid FY24
The FY24 result was in line with expectations. Proceeds from asset sales are being used to pay down debt as well as recycle into the ongoing capex program with its key tenant which is being rentalised at 7.5%. NTA stable at $4.01 with rental growth offsetting cap rate expansion.
We maintain our ADD rating.
MAAS Group (ASX:MGH) - Growth to continue through FY25
MGH delivered FY24 EBITDA at the upper end of its guidance range, with management expecting continued revenue and profit growth in FY25 – the company will provide further outlook and trading commentary at its AGM. The business continues to demonstrate a transition away from real estate towards a construction materials, namely quarry, lead industrial business – construction materials grew FY25 EBITDA 54% (existing businesses grew 44%).
We maintain our ADD rating.
IMDEX (ASX:IMD) - Darkest before dawn
The result was largely as expected. However, outlook commentary was downbeat as exploration activity has yet to increase despite positive macro trends. This may cause some disappointment, but it’s unsurprising given the lag and, in our view, should not be a deterrent. Our thesis is premised on a prolonged trough in raisings, which can only continue for so long, and the key lead indicators trending in the right direction.
We maintain our ADD rating.
Step One Clothing (ASX:STP) - Supremely comfortable
STP outperformed expectations, with earnings that were around 6% ahead of the guidance provided in June and 50% higher than FY23. All regions saw positive sales momentum. The efficiency of marketing expenditure was considerably better than last year (and even better than we’d expected), underlining STP’s successful pivot to a strategy of ‘profitable growth’.
We maintain our ADD rating.
Ebos Group (ASX:EBO) - Result and outlook in line with expectations
EBO posted its FY24 result which was in line with consensus forecasts. Importantly the FY25 guidance range sits comfortably within both MorgansF and consensus. EBO highlighted the base business (Ex-Chemist Warehouse contract) grew underlying EBITDA ~8% in FY24 and FY25 guidance implies underlying EBITDA growth ex-CW of 5% to 10%.
We maintain our ADD rating.
Trim/Funding Source
Cleanaway Waste Management (ASX:CWY) - Moderating
The EBIT growth progression from FY24 into FY26 is well understood, but the net finance cost and capex guidance and revised 5 year forward earnings growth outlook for impairment testing moderated our bullish stance on the stock. 12 month target price reduced, due to higher debt service, higher lease costs, higher maintenance spend, and lower long term EBITDA generation. With the TP decline and recent share price strength, we downgrade from ADD to HOLD
We adjust to a HOLD rating.
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