Four Beaten Down Stocks – REG, SGM, WEB and APT

  • Sep 26, 2018 AEST
  • Team Kalkine
Four Beaten Down Stocks – REG, SGM, WEB and APT

REGIS HEALTHCARE LIMITED (ASX:REG)

Regis Healthcare Limited (ASX:REG) witnessed an increase of 5% in revenue to $594.4 million in FY 2018 as compared to last year. Despite the industry-wide Federal Government funding cuts and indexation freeze, the company witnessed the growth in the revenue mainly due to the growth initiatives undertaken by the company which includes the Presbyterian Care Tasmania acquisition and the new Facilities of the companies. The company’s EBITDA was impacted by the increases in staff costs from EBA escalations, increases in expenses due to changes to the ACFI funding instrument, and expenses related to the ramp up of new facilities. The Company’s board has declared a final dividend of 8.65 cents per share, fully franked which is payable on September 26.

In the last six months, the company’s share prices were decreased by 17.65% from $3.70 to $2.92 as on 25 September 2018.

SIMS METAL MANAGEMENT LIMITED (ASX: SGM)

On 24 September 2018, SIMS released its first quarter trading update of FY2019. In the first quarter of FY 2019, the underlying earnings before interest and tax (EBIT) of the company is expected to be in between $58 million and $63 million. The equity accounted income in the company’s 50% joint venture, SA Recycling (SAR), is expected to be between $10m to $15m which is lower than the last quarter of FY 2018.

It has started installing upgraded equipments which will enable the company to produce a higher quality Zorba and it will also help in facilitating sales in the current market. Although the first quarter of FY 2019 result will be better than the first quarter of FY2018, but the company is expecting the profits to be less than the last quarter of FY 2018. In the past six months, the company’s share price decreased by 18.21% from $14.740 to $12.3 and the stock has bucked the trend and jumped up about 3.4% on 26 September 2018 (2:25 PM AEST). 

WEBJET LIMITED (ASX: WEB)

Webjet Limited (ASX: WEB) is a provider of travel booking services through online platform. In the FY 2018, the EBITDA of the company was increased by 71% to $87.4 million. EBITDA was affected by the introduction of Netflix tax from 1st July 2017 and lower contribution from Cruise. The NPAT of the company increased by 63% to $55.7 million in FY 2018. The company is expecting growth in both B2C an B2B markets in FY 2019. On 25 September 2018, the company witnessed a sharp decline of 6.031% mainly due to the increase oil prices in global market. If the oil prices continue to rise, we can expect a further decrease in the share price of the company. In the last six months, Web’s share price increased by 38.49% from $11.050 to about $15 as on 24 September 2018. The stock was down 1.7% on 26 September 2018 (2:25 PM AEST).

AFTERPAY TOUCH GROUP LIMITED (ASX: APT)

In the past six months, the Afterpay Touch Group’s (ASX: APT) share price increased by 139.73% from $6.770 to $16.230 as on 24 September 2018 but it had plunged 24.3% in last one month alone. The stock was again up 4.8% on 26 September 2018 (2:25 PM AEST) as it bagged a deal with dentistry group, Smiles Inclusive under which Afterpay will offer its buy now, pay later payment scheme at Smiles’ 52 dental practices. The company has showed a strong financial performance in FY 2018 with increase in the revenue and other income by 390% to $142 million, driven by the increase in Afterpay underlying sales and stable merchant margin. The EBITDA of the company increased by 468% to $34 million in FY2018.

In July 2018, the company achieved $20 million underlying merchant sales in the US which was $12 million in June. If this trend continues, the company could become a major retail force in US within a year. Recently, the company raised $117 million from institutional investors at $17.05 per share to fund future growth in the US.

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