Data analytics business Veda Group Ltd (ASX: VED) has continued its strong run this morning with the shares trading 8 cents or 3.5% higher at $2.34. The stock has jumped 28% since late July when it bottomed out at $1.83, while it has climbed 13% since announcing its full-year results late last week.
The rally shows that the market is becoming more confident regarding the company's future growth prospects. It recently reported a 12.4% increase in revenue and a 141.5% improvement on net profit, both were well above what it had forecast in its prospectus. Also the company's CEO said she expects it to deliver "at least double-digit EBITDA growth in FY2015 and broadly commensurate growth in NPAT".
Deutsche Bank upgraded the stock to 'Buy' from 'Hold' too after Veda declared a 4 cent per share dividend. Those holding the stock as at 10 September will be entitled to the dividend while it will be paid on 9 October 2014.
Currently trading on a P/E multiple of 30.7x, the stock isn't considered to be 'cheap', but it does seem to be a very reasonable price to pay for such a high quality business. The company should continue benefiting from the low interest rate environment and credit growth which might see the shares climb higher over the coming years.
