Australian small-cap shares aren’t normally household names and don’t get the same media attention as the big banks and miners that dominate the ASX 200. However, keen investors can find opportunities in these smaller companies for better returns than blue-chip regulars like BHP (ASX: BHP) and Commonwealth Bank (ASX: CBA). With reporting season in full swing, we take a look at two holdings from within our diversified TAMIM Fund: Small Cap Income that are maintaining positive guidance for the remainder of 2023. Helloworld Travel Ltd (ASX: HLO)Helloworld Travel’s share price rebound accelerated this week. After falling in 2022, Helloworld stock has gained 74% since the start of 2023 while the All Ords has risen 6%. Helloworld Travel is a leading Australian & New Zealand travel distribution company, comprising retail travel networks, corporate travel management services, destination management services (inbound), air ticket consolidation, wholesale travel services, and online operations. The company released 1H23 results on Monday, detailing three times more transaction volume than the prior comparable period (pcp). Here are the highlights from the company’s results:
Travel is backThe entire travel sector has been riding a post-COVID boom, with demand and prices riding high. Visit any airport and you realise how much Australians want to travel, despite the impacts of interest rate rises and inflation. The demand is surging across Helloworld Travel’s international operations too, with $178 million of TTV from New Zealanders – up 359% while Fijian operations also saw over 22 times more TTV last half. The company said demand for the services of its network agents has continued to outstrip agent availability. Helloworld chair Garry Hounsell commented on the results and outlook, writing: “[TTV growth] reflects the strong demand from the travelling public, domestic and international borders returning to normal, Helloworld’s strong product offering, and the incredible efforts of our agency networks to service their customer base. As a result of the strong first-half figures, Helloworld has upgraded its earnings (EBITDA) guidance to between $28 million and $32 million for the 2023 financial year. PeopleIn (ASX: PPE)TAMIM fund manager Ron Shamgar currently thinks highly of PeopleIn because of Australia's historically low unemployment rate, its reaffirmed FY23 earnings guidance, and relatively low valuation. The company released 1H23 results on 17 February, highlight by record __ and a strong outlook. Here are the key takeaways:
PeopleIn is in the business of sourcing staff for its clientele, primarily temp staffing through the use of contractors. These include appointing supplementary nurses, labour hire, IT contractors and some niche areas including a focus on the PALM scheme and indigenous placement programs. The company stands to benefit from positive operating conditions including, continued acute shortage of labour and strong market opportunity. PeopleIn’s share price fell just over 30% in 2022 and has seen choppy trading in 2023 despite the positive results and outlook. This has led management to conduct a strategic review with the following rationale: “The PeopleIN Board considers that the recent share price performance does not reflect the record financial results for FY22 or the fundamental strength of the business and has therefore decided to undertake a strategic review to evaluate options available to maximise shareholder value.” Additionally, CEO Ross Thompson said: “We are pleased to announce a record result, which was driven by strong organic growth across our core businesses and favourable industry tailwinds, including record low unemployment. With all analyst coverage signalling PeopleIn to be a buy to strong buy, a multiple of only nine times FY23’s estimated earnings and a potential grossed-up dividend yield of 7%, the market might be overlooking the upside potential of this small-cap company. Disclaimer: ASX: HLO and ASX: PPE is currently held in TAMIM Fund: Small Cap Income
0 Comments
Your comment will be posted after it is approved.
Leave a Reply. |
Stock CommentaryAt TAMIM we are committed to educating investors on how best to manage their retirement futures. Sign up to receive our weekly newsletter:
TAMIM Asset Management provides general information to help you understand our investment approach. Any financial information we provide is not advice, has not considered your personal circumstances and may not be suitable for you.
Archives
April 2024
Categories
All
|