We’re back with another one, and this week it’s Praemium (PPS)!
The ASX 200 hasn’t been the most exciting ride with global markets on a decline seeing the ASX follow suit. In times like these our Hot Stocks haven’t been performing to the best of their potential, however they have seen stronger moves than most and it’s best to tread carefully and adjust trading strategies to better cater to stockpicking in a hard market.
With Praemium (PPS), it’s our pick this week for a few strong reasons. On the fundamental aspect, recent growth both domestically and overseas has been strong, and we expect another positive update in April. We are picking this story as well as it has had a significant pullback on the back of recent market volatility. The Praemium brand is becoming ever more popular with development and evolution of the SMSF and other functionalities.
On the technical front, after going on a recent tear and reaching highs of 85.5c PPS has had a solid pullback breaking the 20 day moving average on a weekly chart. Right now it is holding right on the 40 day moving average @ 59c. If good news is on the horizon there is plenty of blue sky between here and the recent highs!
In case you didn’t know, Praemium is an Australian/UK financial technology company specialising in creating platforms that are used by financial advisers for reporting and investments. Recent report on the half year was phenomenal with revenue up 25% to $20.5M and profit up 87% to $3.3M.
This week it goes to Evolution Mining (EVN)!
One of Equity Story’s 3YR Growth stories, Evolution Mining (EVN) looked fantastic as a candidate for our Hot Stock this week and after rigorous analysis, we’ve crowned it this week’s pick.
On the fundamental front, we’ve seen EVN consistently put out growth figures with one of the lowest AISCs in the industry to boast and a record low for them at $785/oz for their recent half year. We continue to see EVN put out solid numbers and really like their Cowal operation being able to deliver 130koz just last half year.
Further, Trump’s recent political maneuvers in Trade and a weakening Aussie dollar, we see as boosts to EVN short to medium term and with technicals suggesting a break to the upside, we think gold is gaining traction and will take EVN on a ride along with it.
In a difficult market like we are experiencing now, Gold should ordinarily do well. On that general note, fingers crossed for continued momentum!
We think NextDC (NXT) will be a winner over the next few weeks!
With brokers talking about the stock going to hit $10, we had a look again at this story that we’ve already made money on and decided to put in on this week as our Hot Stock!
NXT is well positioned for the move to Cloud technology with plenty of capacity for extraordinary growth moving forward. We think they are in the right industry that will see growth over the medium to longer term, and recent results saw NXT post record share price highs as there was an upgrade to earnings.
Revenue for the 6 months was $77.5M, up 32% from the previous corresponding period, along with EBITDA of $33.6M, up 41% on pcp. Although profits after tax was down due to deferred tax assets, it was great to see the underlying performance of the Company improve so greatly.
Further, the chart this week looks phenomenal and set to burst so its no question as to why NextDC (NXT) is our Hot Stock this week.
Nothing Hotter Than Afterpay Touch Group (APT) This Week!
This week it looks like Afterpay Touch Group (APT) is poised to break through $8 which could really see this stock continue its momentum and reach higher prices. Afterpay has given us a new word in the Australian dictionary which retail shoppers are increasingly adding to their vocabulary. Just the other day we heard someone say to their friend “just Afterpay it”!
This exciting Juggernaught of a stock for the second time wins the Golden Star stock award and just for an added bonus has an Equity Story Buy signal on the technicals.
Fundamentally, the Company has attracted users like no tomorrow since its inception, and its recent result for the Half Year 2018 saw revenue up 518% to $37.1M along with total users (paying) up 85% to 1.5M. With over 12,000 retail partners and having sold $900M of goods and services over the 6 month period, it’s clear the service is here to stay – at least for the time being.
It’s biggest opportunity now to grow further organically is to take on the US market. Anyway… fundamentally and technically we like this stock, and the sentiment has been positive around this stock ever since it’s been around.
It’s our Hot Stock this week and it’s certainly got a burning momentum behind it.
NextDC (NXT) Is Our Hot Stock This Week!
Not only is this stock trending technically, fundamentally and socially NXT is gaining traction. NXT is a provider of cloud services and solutions, capitalising on the cloud phenomenon. As technology advances, and as we have seen with more companies moving to the cloud offerring SaaS instead of products, we believe fundamentally that we are on a trend that we can capitalise on.
Recent half yearly report from the Company has definitely given investors further confidence as well. With a 32% increase in revenues to $77.5M and profit before tax increase of 54% to $12.3M, the Company is seeing strong growth and demand. Further, with very forecastable revenues given a majority recurring revenue business model, shareholders can easily rely on management’s guidance.
Management have also improved full year guidance from what they previously expected, overdelivering on their expectations; exactly what we want to see from these companies.
Sounds like the perfect concoction for a Hot Stock!
This Week’s Hot Stock Is Valmec (VMX)
The Golden Hot Star stock of the week is awarded to Valmec Limited (VMX). The half year results recently reported were strong on revenue and earnings growth. In particular, Revenue was up 66% on HY17 to $49.7 million, EBITDA increased by $2.3 million or 209% on HY17 to $3.4 million, and Net Profit before Tax increased by $2.1 million.
There was a significant ramp-up in construction activity across all sectors, and they experienced industry leading safety performance currently over 1.6 million hours LTI free, along with a stronger balance sheet supported by a Jan 2018 equity raise.
Plus, add to the fact that we get a chart that looks like it’s ready to have an aggressive run in a sector that is also popular with investors.
Why we like it:
On the fundamentals it’s quite simply as the results clearly show. VMX is poised for strong growth on the back of a growing order book and improving margins in a market that’s on the up.
The company recently raised $5.1 million and is well-funded for growth.
And on the technicals…VMX has not broken its short term (20x day) moving average since August 2017. While not a super-aggressive trend, it continues to elegantly swing its way to higher highs.
As the momentum traders would say “why wouldn’t you buy that?
We picked Hansen Technologies this week!
Whilst Rome burnt last week, Hansen Technolgoies (HSN) – an Equity Story Three year growth story, edged up higher. Tipped for a decent announcement in two weeks, some people in the know buying last week and a strong technical setup on the chart, we just could not pass this story.
Another week another hot stock
It’s no surprise that when the DOW has seen a substantial pullback that you would play the markets how every sports manager will, run our best players. A2M is out Hot Pick this week for this reason and we expect the Company to report well (and it’s a Company we’re trending at the moment)!
We like how on dips the stock is quickly bought back up and it’s been this way since it’s been listed on the ASX. With a history of underpromising and overdelivering, we think we will see the stock do well over the short-term and the medium-term.