Stocks Under Discussion: WSP, HUB, TYR, CAT

Summary

  • Market sentiments are uplifted with wage subsidy extension under two-tier structure, though payments are reduced for JobKeeper and JobSeeker support to ensure they do not act as “disincentives”.
  • Besides momentum seen across US tech stocks and positive vaccine progress seem to be driving equities, while upcoming AU Budget release and corporate earnings season are closely eyed.
  • The ASX 200 gained 2.3% on Tuesday at 6,139.4 points (At 2:37 PM AEST).
  • While investors rebuild/redesign their portfolio amidst all the market and economic developments, some attractive stocks need closer attention to build the virus-immune portfolio.

Less than a month ago, Australia was applauded for swiftly handling coronavirus pandemic, but quarantine lapses in the country triggered surge in infections again. On Monday, the official enquiry began to look into the outbreak. Following the eruption in cases again, the Government has ordered about 5 million people to follow partial lockdown for six weeks.

New South Wales, the country’s most populated area is witnessing increasing number of daily cases, raising the fears of the second wave. With mounting health crisis, Australia seems to be facing the first economic recession in nearly three decades.

While market players are increasingly cautious on rising infection numbers and sluggish growth prospects, they seem to be looking at policy aids as well while navigating the market.

On the policy front, while the existing wage subsidy scheme will expire at the end of September, the unemployment assistance has now been extended under the two-tier structure. The support payments are reduced for JobKeeper and JobSeeker support to ensure they do not act as “disincentives”.

The ASX 200 gained 2.3% on Tuesday at 6,139.4 points (At 2:37 PM AEST).

While investors rebuild/redesign their portfolio amidst all the market and economic developments, let us scan through four stocks under the spotlight - WSP, HUB, TYR and CAT:

Whispir Ltd (ASX: WSP) Advancing Well with 35.7% ARR growth

Whispir, a cloud-based communications platform, announced close to breaking even in Q4 FY20. The company showed 35.7% growth in ARR on the prior comparative period.

With $42.2m annualised recurring revenue in Q4FY20, the company signed up a record number of new customers and increased platform utilisation by the existing customer base, on the back of increased software demand to automate/manage COVID-19 communications and Return to Work processes.

The company’s cash receipts grew 27% to $11.3 million, while its operating cash burn dropped 93% to $95,000.

During the three months to June 30, Whispir added 72 net new customers, making it a total number of 630 customers. Adapting to the more unique situations, the company has created 15 COVID-19 templates and 11 “return-to-work” templates, which ensure that organisations resume functioning while following government regulations.

Whispir shares traded at $3.8, down 1.8% on 21 July 2020 (At 2:37 PM AEST). The stock has generated 88% return over last one month, with a YTD return of 148 %.

HUB24 Ltd (ASX: HUB) Noted 14% FUA Uptick

Provider of superannuation and investment platform services, HUB24 recorded strong net inflows of $1.1 billion in the June quarter, with FY20 average monthly net inflows of $412 m, up 26 % over FY19.

As on June end, FUA was noted at $17.2 billion, marking an increase of 14% on the back of favourable market comment and strong inflows.

Following a softer month in April, net flows were at record levels in June quarter, as momentum started building with advisors adjusting to COVID-19 situation. Inflows continued by client transitions from incumbent platforms. This includes strong inflows from key accounts and broker clients.

HUB24’s network is growing with new 24 licensing agreements signed during the quarter. According to the market reports, HUB24 has maintained 2nd place ranking for both quarterly and annual inflows for the last five years. Market share had also increased by 1.3% to 1.94% from March 2019.

Additionally, HUB24 is ranked 1st in five categories – range of investment, client portal, integration with planning software, client reporting and tax optimisation tolls.

HUB24 shares traded at $12.96, up 1.6% on 21 July 2020 (At 2:37 PM AEST). The stock has generated a 16.1% return over last one month, with a YTD return of 14.95%.

Tyro Payments Ltd (ASX: TYR) Recorded $117 million Revenue for 1H FY20

Tyro Payments is Australia’s 5th largest merchant acquiring bank in the market (in terms of number of terminals), offering payment solutions and business banking products. More than 32,000 merchants used the application in the first half of FY20. Generating $117.3 million in revenue, Tyro processed over $11.1 billion in transaction value. In 1H FY20, Tyro Payments formulated $37.4 million in loans and held total $9.7 million in merchant deposits.

The company’s transaction volumes fell by 38% in April to $0.911 billion, compared to $1.468 billion on PCP. In May, the volumes were recorded at $1.285 billion.

The recent data is showing definite signs of recovery. June volumes have been recorded at $1.656 billion, representing 7% uptick from $1.553 billion in FY19. The FY20 transaction volumes till date have been seen to increase 15% Y-o-Y to $20.131 billion.

Tyro’s shares traded at $3.840, up 5.8% on 21 July 2020 (At 2:37 PM AEST). The stock has generated a 27.37% return over the last three months.

Catapult Group International Ltd (ASX: CAT) Now Cash Flow Positive

Sports technology company, Catapult Group has recorded $9 million net free cash for 2020 financial year. According to the company, this is a massive $24.1 million advancement on the 2019 financial year result.

A year earlier than forecast, CAT is now cash-flow positive. Additionally, Catapult anticipates reporting annual revenue between $100 million and $101 million. While the EBITDA is expected to hit between $11.5 million and $12.5 million. Mainly, during lockdowns around the world, the company has continued to win new customers and keep existing clients.

Catapult’s shares traded at $1.460, up 3.18% on 21 July 2020 (At 2:37 PM AEST). The stock has generated a 37.38% return over the last three months.


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