Why are Investors looking at PBH VHT EML on ASX?

  • Jun 12, 2020 AEST
  • Team Kalkine
Why are Investors looking at PBH VHT EML on ASX?

Summary

  • S&P Dow Jones – All Ordinaires index rebalance is effective June 22, 2020, and PHB performance has helped it to be a part of the new list.
  • Recommencement of 2020 season by National Rugby League and the Australian Football League would expand product offering of Pointsbet.
  • Though Coronavirus has a severe negative impact on the global economy, cloud computing-based organisations could sail through without many disturbances
  • COVID-19 has helped develop M&A market and companies like VHT and EML, having a strong balance sheet, are cashing on such opportunities

The Australian economy has witnessed the worst quarter growth in 3 decades for the period ending on 31 March 2020, with a fall of 0.3%. The first contraction since 2011 as the country went through torture from bushfire, coronavirus pandemic, and other natural disasters. However, things are improving a bit on the front of Covid-19 outcome and the government, considering the factors have provided ease in restriction. The securities market is rebounding as investors have started to infuse more capital in the market. Many stocks have provided a decent return to shareholders in the past month as their business activities are resuming back to normal. Let us now look at three stocks with their recent updates:

Pointsbet Holdings Limited

Wagering service provider Pointsbet Holdings Limited (ASX: PBH) offers innovative racing and sports betting products and services directly to clients in Australia and the United States. The company has multiple reasons to cheer about – its performance has helped it to be a part of rebalanced S&P 300 and S&P All Ordinaries index effective 22 June 2020 and recommencement of the 2020 season by National Rugby League and the Australian Football League on 28 May 2020 and 11 June 2020, respectively. This recommencement got breath back to PBH.

 Record Net Win in February and March 2020

  • The Australian Trading business achieved a record Net Win in February and March 2020. The trend is likely to continue in Q4 with Net Win amounting to A$18.2 million from April 1 to 25 May 2020.
  • The United States business managed to achieve net win of A$0.3 million from April 1 to 25 May 2020, despite the closure of the major sporting leagues.

 

Do Read: How stocks took a rally on the announcement about return of Community sports in NSW?

During Q3 FY20 ended on 31 March 2020, PBH reported a growth of 63.1% in active clients and reached 106,046. Q3 also witnessed the successful implementation of an Australian media partnership with Channel 7, stated in the month of February 2020, allowing PBH to become the exclusive Victorian odds integration partner for national Horse Racing coverage of Channel 7.

At the close of the trading session on 12 June 2020, the stock of PBH settled at $6.320 per share.

Volpara Health Technologies Limited

Volpara Health Technologies Limited (ASX: VHT) is engaged in the sale of VolparaEnterprise a comprehensive cloud-based breast imaging analytics platform which delivers quality assurance and performance monitoring.

Robust Growth in Revenue

Recently, the company released its results for FY20 ended on 31 March 2020 and stated that the year was an excellent one for the company:

  • During FY20, the company experienced a rise of 153% in revenue, which amounted to NZ$12.6 million. Also, the group subscription revenues went up by 106% to NZ$9.1 million.
  • VHT anticipates continued growth in subscription revenue during FY21 as the business pivots MRS away from a capital sales model to an almost solely subscription-based model.
  • VHT successfully concluded the acquisition of MRS Systems in the United States on 13 June 2019 for product development by using MRS existing offerings.
  • VHT closed the financial year 2020 with a cash balance of NZ$31.4 million. As of now, the cash balance of the company stands around NZ$69 million resulting from the successful completion of placement and subsequent SPP on 18 May 2020. This gives VHT significant runway and flexibility in order to assess potential future strategic acquisitions for expanding its product offering and market reach to help save families from cancer.

 

The company is strongly placed against peers for opportunities that will emerge in FY21 from COVID-19 due to balance sheet capacity and access to capital.

Do Read: How these are MedTech shares are coming in the eyes of investors?

At the close of the trading session on 12 June 2020, the stock of VHT settled at $1.27 per share.

EML Payments Limited

EML Payments Limited (ASX: EML) is a BNPL entity, which issues pre-paid financial cards. The company recently announced that its Chairman, Peter Martin has made a change to its holdings in the company by disposing of 400,000 fully paid ordinary shares.

The company exercises a long-term strategy for delivering earnings and revenue diversification by strategic acquisitions and organic growth.  Recently, the company has acquired Prepaid Financial Services (PFS). The purchase of PFS would make EML Payments Limited as a leading global prepaid fintech enabler. EML has started numerous integration projects and anticipates completing those in the upcoming 24 months.

In the month of March 2020, the Gift & Incentive segment was impacted by COVID-19 pandemic in some regions, and Gross Debit Volume went down by 29% over pcp, indicating the impact of mall closures for up to 3 weeks in some countries. EMP also updated that it would generate operating cash inflows from breakage on gift cards, which were sold 12 months ago as the contract asset of $36.8 million.

The company stood in a robust position with a resilient balance sheet to pass through any decline in business. EML also possesses financial strength for investment in growth and to take benefit of future opportunities. EML is in the enviable position to finance those actions which would generate long term value creation.

At the close of the trading session on 12 June 2020, the stock of EML settled at $3.570 per share. 

 


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