Stocks redefining Growth/ Value: SOM, MSB, BBN, AD8, DTC, SDF

  • Jul 24, 2020 AEST
  • Team Kalkine
Stocks redefining Growth/ Value: SOM, MSB, BBN, AD8, DTC, SDF

Summary

  • Positive recovery signs with the opening of economies have started to reflect in business performances of many companies. 
  • Digital push by COVID-19 pandemic has fostered many businesses to incorporate digital solutions and online delivery channels. 
  • The opportunities for integrated workplace management solutions (provided by Damstra Holdings Limited) and media networking solutions (offered by Audinate Group Limited) have enhanced, with work from home trends. 

Australian economic recovery and the time to reboot is once again in doldrums with the rising number of cases that sent its many regions back under lockdown. The phased reopening that had started sending waves of optimism to the market players, backfired owing to breaches in safety, and precautionary measures as the deadly scenario gradually grips its different states. 

Victoria witnessed a spike in coronavirus infection, recording 403 additional cases (as on 23 July), which prompted the enforcement of a six-week partial lockdown in Melbourne where people must now wear masks before venturing out of their homes. Meanwhile, the rise in the daily cases has put the country’s most populous state New South Wales on high alert. 

ALSO READ: COVID-19 Striking Again: 5 Reasons Shares May Witness a Rise

Despite the rising infection number and concerns growing over an increase in the unemployment rate, the Australian stock market is reverberating some optimism with the S&P/ASX 200 index MTD-return of 3.33%.

While investors are consciously building their respective portfolios, eyeing for growth and value, let us look at some stocks, which remained in the spotlight. 

SomnoMed Limited (ASX:SOM)

SomnoMed Limited, which was founded in Australia, provides treatment devices for sleep-related breathing disorders such as obstructive sleep apnea (OSA) and sleep bruxism. The Company is the global leader in COAT (Continuous Open Airway Therapy) and trades across 26 countries. 

In June 2020 Quarterly Rebalance, the Company was added as the component of the S&P/ASX All Ordinaries index

SomnoMed has reported positive trends for Q4 in 2020 despite the pandemic, although all regions, which include APAC, North America and Europe witnessed lower revenues as compared to Q4 FY19.

More substantial signs of recovery were observed since early June, with dental practices in most North American states currently receiving patients, while Europe and Australia are also back to a significant proportion of pre-COVID business. 

ALSO READ: Sleep Disorders: A Look at Two ASX Stocks Providing OSA Treatment Solutions

The Company in the next quarter, anticipates the launch of digitally made and PDAC approved SomnoDent® oral appliance for SomnoMed North America. Furthermore, the Herbst Advance Elite™ would enhance SOM’s product offering, which is aimed for a customer segment seeking digital precious, while also incorporating the patient’s comfort and retention via the proprietary SMH BFlex soft liner.

On 23 July, SOM last traded at $1.31, up by 0.383% from its last close.

Mesoblast Limited (ASX:MSB)

The global leader in Innovative allogeneic cellular medicines, Mesoblast Limited, has announced that the Oncologic Drugs Advisory Committee (ODAC) of the United States Food and Drug Administration (FDA) has set up the meeting on 13 August 2020 for approval of RYONCIL™ (remestemcel-L).

The Committee would evaluate data aiding MSB’s BLA (Biologics License Application) regarding RYONCIL™, which is aimed at treating SR-aGVHD (steroid-refractory acute graft versus host disease) in kids. 

Meanwhile, MSB has initiated expanded access protocol (EAP) in the US for compassionate use of its allogeneic mesenchymal stem cell (MSC) product candidate remestemcel-L for treating COVID-19 infected children with cardiovascular, as well as another multisystem inflammatory syndrome (MIS-C) complications. 

Treatment with remestemcel-L in patients suffering from COPD (chronic obstructive pulmonary disease), and an improved state of inflammation demonstrated better respiratory and functional related results.

MSB in the June 2020 Quarterly Rebalance was incorporated as S&P/ASX 200 Index component.

On 23 July, MSB last traded at $3.54, up by 2.609% from its last close.

Baby Bunting Group Limited (ASX:BBN)

Australia’s largest specialty nursery retailer, which assists new and expectant parents via its one-stop baby shop saw all its stores remaining open during the year despite the pandemic. Furthermore, BBN started shipping to New Zealand customers through the Company’s website. 

The Group on 22 July 2020 provided an update on its FY20 financial results. 

Kalkine Image (Data Source: BBN ASX Update)

CEO and Managing Director Matt Spencer stated that BBN had performed strongly and grow market shares. The Group accomplished comparable store sales growth, improvement in gross sales margin and retail cost leverage. The prudent capital management undertaken by the Company has resulted in zero debt and $13 million in the bank. 

Against the 52-week prior comparable period, BBN approximated the total sales of $405 million, indicating 12% growth. Meanwhile, comparable-store sales, including that from brick and mortar stores, have grown in 2H, as well as from FY19 sales. 

On 23 July, BBN last traded at $3.58, up by 2.286% from its last close.

Audinate Group Limited (ASX:AD8)

The developer of the professional AV-industry leading Dante® media networking solutions, Audinate Group Limited reported unaudited revenue of approximately USD 20.4 million over the 12 months ending 30 June 2020 and retained a gross margin of approximately 77%. 

The essential US tradeshow for the pro-AV industry (InfoComm) resulted in an increase in the number of Dante enabled products by 31% to 2,804 over FY19. 

AD8 during InfoComm (in June) announced the Dante video Authorised Implementors Program with two initial partners, with authorised implementors enabling manufacturers to swiftly get to market with complete whitelabel Dante video products and offer specialised design and manufacturing services.

Audinate Group has also expanded its Dante AVIO® adapters range with the launch of new Bluetooth and USB-C adapters. With many AV professionals working from home, a massive opportunity for Audinate has turned up for the company to ramp up webinars and its Dante Certification training program. 

During H2 FY20, AD8 held 77 webinars, with 120k people attending them or participating in online training and approximately 40k AV professionals undertaking Dante certification. 

Source: AD8 ASX Update

The Company has also successfully raised $28 million through an oversubscribed Institutional Placement, which demonstrates strong endorsement for Audinate’s growth strategy for accelerating investment and pursuing growth opportunities. 

On 23 July, AD8 last traded at $5.36, down by 5.8% from its last close.

Damstra Holdings Limited (ASX:DTC)

Australian-listed integrated workplace management solutions provider, Damstra Holdings Limited, reported solid performance across the business, with delivered revenue and other income on an unaudited basis for FY20 of $22.0 million, demonstrating a growth rate of 38% on FY19.

At the end of FY20, key metrics for DTC are increasing users from 320k noted at FY19 end to 404k, while clients to rise from 129 at the end of FY19 to 279. 

ALSO READ: Winning Streak for ASX Tech Stocks: PPH, SZL, XRO, DTC

DTC continues its product innovation with 14 additional products/modules brought to market during FY20. 

Recently, in July, Damstra declared that it had inked  an agreement (implementation) for obtaining Vault Intelligence Limited (ASX:VLT), which is slated for completion in October 2020. The purchase of Vault along with other acquisitions of the Company represents its targeted and considered approach to Merger and Acquisition.

On 23 July, DTC last traded at $1.73, down by 3.352% from its last close.

Steadfast Group Limited (ASX:SDF)

The largest general insurance broker network of Australia and New Zealand, Steadfast Group Limited confirmed strong trading results for June 2020, and expects to deliver EBITDA at the top end of the guidance range of $215m - $225m, that was previously withdrawn owing to the uncertainty surrounding COVID-19 pandemic. 

Meanwhile, the Company’s EBITDA for the eleven months to May end was in line with its pre COVID-19 expectations. SDF during May witnessed the continuation of premium rate increases from insurers, with Steadfast Underwriting Agencies continuing to outshine through strong EBITDA and organic growth.

Also, in May, there were some small volume reductions in the Company’s broker network, offset by expense savings. 

On 23 July, SDF last traded flat at a price of $3.53.

 


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