from the stargroup newsletter i just found in my inbox... nice commentary along the lines of what we were thinking and the equity strory info i was hoping to post.... excellent
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ASX Alert
Research Reports[/FONT][/COLOR][/B][/P]PAC PartnersDear #### We have pleasure in advising that we have announced this morning that a Research Report has been put out on Stargroup by PAC Partners with a headline of our pathway being set towards profitability in FY18. This report provides a short term target price of $0.03 on the STL stock (which is an 18% lift to the present share price), which we believe is very conservative given the valuation methodology is a DCF and was based on FY18 revenue of $18mil and an EBITDA of $3.8mil. We obviously have recently announced the completion of the Fast Cash Acquisition and in the most recent presentation being presented by our CEO in Hong Kong this week, revised our FY18 guidance upward to a revenue of between $20 - $21mil, an EBITDA of $5 - $6mil and an NPAT of $2m - $2.5mil.
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Further, earlier in the week we were also highlighted on the Equity Story website where it made a buy recommendation to its members and investors. Equity Story are a Sydney-based stock market research and reporting firm. Their aim is to help you grow your wealth quickly with specific guidance and recommendations and they aim to help you make fast, reliable share trading decisions with simple and straight forward advise you can act on immediately. They have a track record of supporting STL and this recommendation suggests to pay up to $0.034 for our stock. Equity Story have been a long term supporter of STL and have us in their “ten bagger” list which is where they believe our share price will be 10x its present price. Equity Story recommendations are completely independent and unbiased and they are not aligned with any major financial institution and have their own AFSL. There website is a member only website which you can subscribe to and they regularly put up private videos on YouTube talking about the market and their recommendations and these are excellent. I suggest you check out there website on this link. Given their website is a private website we have extracted the key paragraphs from their website for you below: Stargroup Update – dated 13 June 2017 to follow their previous BUY recommendation in April 2016. Latest presentation spells out the abundant growth on offer to STL in the coming years. Since we first added this story to our 3 year growth section, the business has grown its ATM network and subsequently revenues with FY18 forecasts projecting revenues of >$20M (Up from expected revenues of ~$10M in FY17 which is 100% growth). Pretty much all metrics have been revised upwards with STL gobbling up Indue and others to exceed (at least 40%) its original forecasts. The markets tepidness towards STL is unfounded as cash is still king and will always have a place in everyday life. It’s worth noting that STL is the #2 independent ATM deployer behind the big banks and scale is key here as costs drop hence an aggressive strategy has seen STL grow to over 500 ATM’s. There is also the potential of further consolidation in the sector and recent transaction of $500M for the biggest independent ATM deployer in Australia adds to the appeal. Best of all, STL has been hard at it to diversify its revenue stream and move into other complementary services with FY18 expected to see contributions from its four divisions in Star Payments, StarPOS, StarATM and StarLink. You can’t really fault how the business is growing except be frustrated how the Indue acquisition transpired although long term it should be just a blip on the share price as each key milestone is reached (positive cashflows, EBITDA, profit).We still rate STL highly and have full confidence that Todd Zani is the man for the job and is capable in turning STL into a formidable diversified fintech company. Our original aspiration of seeing share price much higher hasn’t come to fruition as yet due to further dilution on the back of capital raisings to fund acquisitions but also lack of belief by the investment community…but we have faith that with time and weight of financial numbers will see STL trade at much higher prices.
