The Altium Limited (ASX: ALU) share price has increased over 65% since the start of 2019, with a strong half-year report released in February triggering a sharp jump higher.

Since the 2018 annual report, Altium has reported its seventh straight year of double-digit growth in its revenue and profit.

Increases in revenue and profit figures for the half-year were 24% and 57.6% respectively. In addition, EBIT and EBITDA were up 55% and 57.6%.

Strong profitability figures as such resulted in an earnings per share jump of 57% which caused a strong reaction to Altium's share price.

Complementing Altium's strong profitability figures is the organic increase in cash from operations by 80%, up to US$26.8 million.

Altium currently trades at a high price to equity ratio of 68 times earnings. Despite this premium, the industry trades over 84 times earnings which allows the Altium share price to show value.

Furthermore, factoring Altium's earnings per share growth into its current valuation allows investors to see stronger value in the Altium share price.

How does Altium's future look?

With impactful technology as a megatrend currently in play, Altium has the right business with strong tailwinds. The increase in smart connected devices continues to grow into the foreseeable future, particularly as we progress into an era of the Internet of Things (IoT).

By 2025, Altium expects to achieve market dominance for designing printed circuit boards and have 100,000 subscribers to its software. From the half-year report, Altium reported a 9% increase in total subscribers to 39,179.

The 49% regional revenue growth was a stand-out performance for Altium in China. To reach the 100,000 subscribers by 2025, Altium has begun aggressively expanding operations in China.

In addition, Altium is transitioning its software from perpetual to terms-based licensing. This pay-as-you-use model will likely result in stronger profitability figures for future financial reports.

Foolish takeaway 

Currently, Altium is on track to achieve its revenue target of $200 million by 2020. Although Altium may appear expensive when compared to other companies, its potential growth allows for a premium.

If Altium is capable of dominating the market for printed circuit boards worldwide, then the Altium share price still has plenty of room to grow.

Here's another ASX company that is poised for growth as part of $US22 billion boom industry.

The post Here's why I think the Altium share price still has plenty of growth ahead appeared first on The Motley Fool Australia.

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At the start of April, the Paradigm Biopharmaceuticals Ltd (ASX: PAR) share price reached $2.02. Much of Paradigm's share price increase was in anticipation of secondary end point results for its phase 2b osteoarthritis trials.

The recent trial report showed extremely positive results.

Most importantly, it was found that Paradigm's repurposed drug showed a stark difference between itself and the placebo. The results were verified using an MRI scan which measured the lesion caused by bone marrow edema.

At day 53 of treatment, Paradigm's repurposed drug showed a reduced bone marrow lesion volume of 34% vs the placebos 3.6%. Furthermore, the bone marrow lesion area increased in the placebo group by 11.9% compared to a 25.3% decrease in the treatment group.

The objective results obtained were also statistically significant with a p-value of 0.03, meaning that it's highly likely that Paradigm's repurposed drug is causing the improvement of bone marrow lesions.

Why did the Paradigm share price not respond accordingly?

Despite fantastic secondary endpoint results from Paradigm, the share price did not react positively.

The cause can be attributed to Paradigm's capital raise at a significant discount which was announced alongside the secondary endpoint results.

Although Paradigm's share price could have responded better, Paradigm received strong attention for its $77.9 million capital raise which should be filled promptly.

Paradigm expects a cash level of $82 million post raise which will allow it to take its repurposed drug through phase 3 trials.

Additionally, a strong cash position by Paradigm will ensure a better offer from potential future negotiators.

At this stage, Paradigm is aware that it has a potential blockbuster drug on its hands and therefore wouldn't give it up without a significant premium.

Where does Paradigm go from here?

Paradigm has multiple share price catalysts coming up. These include the phase 2/3 clinical trials for MPS and the approval for selling its repurposed drug in Australia.

With the results obtained from its phase 2b trials, Paradigm has significantly de-risked its repurposed drug for phase 3.

Foolish takeaway 

Paradigm Biopharmaceuticals is currently well positioned to take its repurposed drug into phase 3 clinical trials. If Paradigm succeeds throughout phase 3, the share price could take off for many years to come.

For other growth companies, be sure to check out…

The post Where does the Paradigm Biopharmaceuticals share price go from here? appeared first on The Motley Fool Australia.

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The Beach Energy (ASX: BPT) share price hit a 9-month low in late 2018. Since then, the share price has recovered to $2.14, close to its all time high.

Beach delivered a strong half-year report with optimistic future growth.

Recent half-year results showed impressive profitability with sales revenue up 147% and its underlying net profit after tax up 199%. This was a result of strong demand for gas and oil output, the Lattice acquisition synergy and increasing oil and gas prices.

Additionally, the statement of cash flows showed strong organic increases in its operating cash flows.

The Lattice acquisition from Origin Energy Ltd (ASX: ORG) back in 2018 has been fully integrated into operations at Beach. Despite the large borrowing to acquire Lattice, Beach is paying down its debt diligently while achieving the cost-saving synergies from the acquisition.

Furthermore, Beach has announced the 40% sale of its Otway Basin project which has an expected completion date of Q3 FY19. Proceeds from the sale will be used to pay down debt. Beach is expecting to be more than two years ahead of its original debt-free target.

Improving the health of Beach's financial statements will allow for future acquisitions or an increase of investment to its organic growth.

What is the future outlook for Beach Energy?

Beach has narrowed its future guidance for FY19 figures. The higher capital expenditure is due to drilling operations planned. Provided that Beach manages to maintain a successful drill rate figure similar to the previous 6 months, the underlying EBITDA guidance between $1.25 billion – $1.35 billion should be achievable.

Currently, the Beach Energy share price trades with a price to equity of 12.65. There is strong value to be found in this share price given that it trades below an industry average of 13.12 and has signs of growth.

Beach currently pays a very small dividend to shareholders and therefore is able to reinvest profits for capital growth. If Beach is able to reduce its debt and maintain similar drilling success rates, it should be able to meet its five-year target of ROCE between 17%-20%.

Foolish takeaway

The Beach Energy share price shows strong value and is well positioned for future growth. As with many other oil exploration companies, the profitability of Beach Energy is derived from the price of oil and currency exchange rates.

Provided that Beach Energy can deliver the promises made in its half-year report, the share price should have plenty of gas left.

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The post Why I think Beach Energy's share price could hit a record high appeared first on The Motley Fool Australia.

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The Aristocrat Leisure Limited (ASX: ALL) share price had a weak finish to 2018 with a decrease of approximately 7% for the year. Aristocrat's share price managed to reach an all-time high of $32.93 in the middle of 2018 before dropping 35% shortly after.

Currently Aristocrat's share price is up 20% since the start of 2019. At a share price of $25.41, I think Aristocrat is worth looking into.

FY2018 showed strong profitability figures that are likely to carry into FY2019.

In FY2018, Aristocrat managed to increase its revenue by 47.7%, EBITDA by 32.7% and NPAT by 24.6%. This resulted in an earnings per share increase of 10.4% and a dividend per share increase of 35.3%.

Despite the strong profitability figures reported, the share price continued to tank after the annual report.

Aristocrat's share price is showing value.

At a share price of $25.41, Aristocrat trades at a price to equity of 29.01. This is marginally higher than the industry price to equity of 28.94.

The slight premium in share price is justifiable with Aristocrat's profitability.

Additionally, the dividend payout ratio sits comfortably at 54.13 which should be sustainable if Aristocrat can continue to increase profitability at its current rate.

The trading outlook in February reaffirmed that Aristocrat is on track.

Late February 2019, Aristocrat announced its trading outlook which appeared positive. There is continued growth into Aristocrat's digital portfolio of assets which now represents 27% of segment profit across its casino and casual games.

Moving forward, Aristocrat continues to place the majority of its investment into design and development. Using this investment, Aristocrat plans to stay ahead of the market with innovation for entertainment to increase its customer base.

With the increase in cash flow from operating activities, Aristocrat should be able to maintain the current rate of investment into its design and development. In due course, this investment will be realised which should lead to stronger profitability figures.

Foolish takeaway 

With the Aristocrat share price tanking in 2018, it is currently trading at a share price which shows value. Based off the previous annual report and trading outlook, it appears that Aristocrat is on track to meeting its goals for 2019.

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The Brambles Limited (ASX: BXB) share price has increased over 18% since the start of 2019. Brambles' all-time high was $13.79, back in 2007. It was only in December 2016 that the Brambles share price came close to its all-time high, trading at $13.45.

Currently the Brambles share price trades at $11.87 and is well positioned to break its all-time high.

Brambles' third quarter update showed continuing revenue growth.

On Wednesday, Brambles announced its third quarter trading update consisting of solid results. CHEP, a subsidiary of Brambles, showed growth in sales revenue across its America, EMEA and APAC regions.

Currently the FY2019 expectations for Brambles remain unchanged with modest improvements in underlying profit compared to the previous year. However, Brambles expects its cash levels to increase in the second half of 2019 which will provide flexibility for future operations.

Brambles is continuing to improve efficiencies in its business. The global automation and supply chain cost reduction processes appear to be on track. Provided these processes are successfully implemented into Brambles, investors can expect stronger profit margins over the medium term.

In 2018, Brambles announced the sale of its IFCO division which is expected to be completed by the end of FY2019. As previously mentioned by Brambles, the sale of its IFCO division will be used to perform a share buyback of up to US$1.65 billion and to pay down debt.

With Brambles current high debt to equity ratio around 91%, reducing this would improve the health of future financial statements. Similarly, with Brambles performing a share buyback, investors should see an increase in its earnings per share which should warrant a positive reaction from the market.

Brambles currently trades at a PE ratio of 19.55 which is a significant discount to its industry PE equity ratio of 26.14. Factoring in the growth of Brambles earnings per share from the previous financial year, there is value to be found in Brambles' current share price. Additionally, Brambles has organically increased its operating cash flow from the previous year which is likely to continue into subsequent years.

Foolish takeaway

The Brambles share price currently trades at an industry discount with tailwinds for future growth. Provided that Brambles can reduce its current debt levels and improve business efficiency, the Brambles share price should be capable of breaking its all-time high.

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After a spectacular run in mid-2018 to $215.81, the Cochlear Limited (ASX: COH) share price finished flat for the year. The negative sentiment in markets throughout late 2018 was a cause for the drop in Cochlear's share price. This correction affected Cochlear significantly as the share price was already trading at significant premiums.

On Monday, the Cochlear share price increased by 7% in a day to $180.76. This was most likely off the back of its Nucleus Profile Plus Series Implant announcement which is expected to launch in many developed markets. The recent change in threshold for a Cochlear implant is a tailwind that should be accounted for into Cochlear's share price.

How is Cochlear's growth looking?

In the recent half-year results, Cochlear reported growth in its sales revenue across all operating regions. Americas showed increases of 3% despite the launch of a competitor while both EMEA and APAC showed increases of 8%.

Cochlear continues to target both developed and emerging markets with strength in the latter. 58% of sales revenue was from Cochlear's implants with the senior population continuing to show the fastest growth. Given the evolving population with an increasing number of seniors, Cochlear is well positioned to capture profits from a megatrend as such.

The services division made up 29% of sales revenue with strong demand for its Nucleus 7 Sound Processor. The remaining 13% of sales revenue was from the acoustics division with continual demand for its Baha 5 system.

Cochlear's cashflow statement shows organic growth in cash from its operating activities with significant increases in its free cash flow. As a result, Cochlear was able to increase its interim dividend by 11% and maintain a reasonable dividend payout ratio.

Despite its PE trading above the industry, the Cochlear share price can be justified with the current growth of its three business divisions. Future outlook for Cochlear includes retaining market leadership with continuing research and development and improving operational efficiencies to maintain a strong financial position. Due to Cochlear's international exposure, currency risk should be considered when projecting its future growth. However, if the FY19 outlook for Cochlear is met, the share price could be well on its way to $200.

 Foolish takeaway

With Cochlear's market-leading technology, it is likely to hold a dominant position in the hearing impairment industry. The majority of Cochlear's revenue and profits are offshore which benefits investors by hedging against the weak domestic economy.

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The A2 Milk Company Ltd (ASX: A2M) share price had a great 2017 and 2018, resulting in A2 Milk being a standout performer. Currently, the A2 Milk share price continues to push its all-time high and trades at $14.61.

Since the start of 2019, the A2 Milk share price has already increased by over 35%. At this rate, 2019 could be another year where A2 Milk significantly outperforms the market.

A2 Milk shows growth across all regions

In the company's recent half-year report, milk sales growth reached 12% in Australia and 114% in the United States. This was accompanied by an 83% growth for infant formula sales in China.

Results as such drove revenues higher by 41%, EBITDA by 53% and NPAT by 55%. The earnings per share figure increased over 50% to 20.85 cents from the previous half-year.

There was an increase across A2 Milk's product lines which consists of liquid milk, infant formula, and other nutritional products.

The cashflow statement shows clear organic growth in the cash from operating activities, resulting in an increase of A2 Milk's cash reserve from the previous half-year.

Despite the very high PE ratio of 45.4 that A2 Milk trades on, this can be justified with the growth of A2 Milk's earnings.

Where does A2 Milk go from here?

The calibre of A2 Milk's marketing is second to none. The company has announced that it will continue playing to its strengths and will prioritise marketing spend in key regions such as China and the United States.

Distribution in the United States has been of interest to A2 Milk and has experienced strong momentum in the past few years. In just a six-month period between June 2018 to December 2018, A2 Milk increased the total number of stores by over 4,000 in the United States. Currently, there are over 10,000 stores in the United States that distribute A2 Milk's products.

Foolish takeaway

With A2 Milk's strong financials, there is plenty of flexibility for expansion. Given its success with marketing, I wouldn't be surprised if A2 Milk finishes another year as a star growth stock.

Here is another ASX company that could be a star growth stock of 2019.

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The Technology One Limited (ASX: TNE) share price increased by around 21% for CY2018. This strong performance has quickly been overshadowed by the increase in its share price since the start of 2019. Currently, the Technology One share price is up by nearly 40%, trading at $8.53.

Is the share price too expensive now?

Although Technology One trades on high PE ratios, when compared to its industry, there is still value to be found in the current share price.

From the recent full-year results, Technology One reported an increase in its profit after tax by 15% which met its full-year guidance of 10% – 15%. With the cost control implementations, Technology One is increasing its efficiency and this is improving its margins over time. Since 2011, the margin has gradually increased from 1% and currently sits at 5%.

The profit figures reported allowed for an increase in the total dividend by 8%. Given the growth of Technology One, a dividend payout ratio of 68% should be appropriate provided its earnings per share continues to increase.

Technology One reported its annual licence fee revenue growth of 16% with a customer retention rate of over 99%. This retention rate can be attributed to its Ci anywhere and TechnologyOne software which have been standout performers.

There is plenty of growth available for Technology One

With the rapid expansion of the Asia-Pacific region, Technology One still has many potential customers in the future. Currently, the penetration of Technology One doesn't exceed 15% in any of the vertical markets which are part of the Asia-Pacific region.

The current focus for Technology One will be on expanding its customer base and continuing to control its costs. With the current tailwinds, Technology One is well positioned to meet its guidance of doubling in size every five years.

Foolish takeaway

Technology One is a company which has outstanding customer retention rates with high profile customers such as governments, higher education institutions, and corporates. Technology One has achieved 19 years of consecutive revenue growth. Soon this may be 20.

For other growth options, be sure to check out this ASX company poised to benefit from a $22 billion boom industry.

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The Integrated Research Limited (ASX: IRI) share price suffered a sharp drop in the second half of 2018. Integrated traded in the high $3's before hitting a three year low of $1.50 in 2018. Since the start of 2019, the Integrated share price has gained some momentum and currently trades at $2.30.

Will this momentum continue?

In FY18 Integrated reported a flat revenue figure with minor increases in earnings per share and net profit by 3% and 4% respectively. This was primarily due to a weak performance from its infrastructure product group and the European region overall. Given the high valuation it had at the time, a performance as such is likely to send the Integrated share price tumbling.

However, the recent half-year results show promise

Integrated reported revenue increases of 10% and net profit increases by 26%. Earnings per share rose from 5.41 to 6.82 cents. Despite Integrated holding a flat cash balance from the previous half-year of $9.6 million, organic cash growth in its operating activities was evident. Additionally, the payments product line which previously underperformed alongside infrastructure experienced strong growth in the half-year.

Currently Integrated trades at a PE of 19.3 which is significantly cheaper compared to the industry PE of 108. If Integrated can continue to grow earnings at its current rate, a trading price of $2.30 could be a bargain.

Future growth of Integrated appears strong with a continuing demand for its market-leading software, Prognosis. The continual investment that Integrated places into prognosis will only increase the effectiveness and efficiency of the software. Currently Integrated has over 125 customers listed on the Fortune 500 with numbers continuing to grow. Just this half-year, Integrated managed to increase its customer base by 20 and recorded an annual maintenance retention rate of 95%.

Like many other growth-focused companies, Integrated is another company which derives the majority of its revenue outside Australia. As growth is abundant in offshore markets, investors with a growth focus should be looking in those directions for future returns.

Foolish takeaway

Provided that Integrated Research can continue the growth in the recent half-year, the $4.00 all-time high could well be reached in due course. With the directors of Integrated buying around the current share price, investors may want to do the same.

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The Reece Ltd (ASX: REH) share price has dropped over 20% from its all-time high of $12.61. Currently, the Reece share price trades at $10.03 which could be an opportunity to accumulate.

Reece's share price dropped as a result of the market sentiment

When the charts for Reece and All Ordinaries (ASX: XAO) are compared, the obvious pattern of a weak third and fourth quarter for 2018 is evident. With macroeconomic issues such as the trade war and potential interest rate hikes, optimism in the markets was low. As a result, the Reece share price has now dropped to a point where value can be found.

From Reece's 2019 half-year results, sales revenue, normalised EBITDA and EBIT reported increases of 104%, 45%, and 25% respectively. Although net profit was down 7.6%, this was primarily due to the finance costs from currencies.

Such an issue shouldn't be overly concerning to Reece investors given its operating profit remains high and continues to grow. The cash flow statement also showed strong organic growth through an increase of 87% in receipts from customers. As a result of this performance, dividends remain at current levels.

In 2018 MORSCO, the leading distributor of plumbing, waterworks, and HVAC in the US was acquired by Reece in a $1.9 billion buyout. This one-off transaction had a negative effect on its statutory NPAT, but Reece has reported that MORSCO is performing to expectations.

Outlook

Current valuation has Reece trading at 24 times earnings which is in line with the industry trading at 21 times earnings. This is reasonable as Reece expects the acquisition of MORSCO to boost its FY2019 earnings per share by 5 to 9 cents. This means investors can expect to see between an 11% to 20% increase in its earnings per share. Provided this forecast is met, Reece's share price deserves to trade at a premium to the industry.

Future outlook for Reece is optimistic with its New Zealand presence continuing to strengthen and MORSCO having the potential to deliver over $3 billion in sales from the US. Additionally, Reece has increased its cash holdings which can be used for future acquisitions.

Foolish takeaway

Reece provides investors with diversified growth at a reasonable valuation. Despite the downturn of the domestic housing market, Reece has shown that it's still capable of growing its earnings under such conditions. If the MORSCO acquisition meets expectations, the Reece share price may start trading at a much higher premium.

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The Breville Group Ltd (ASX: BRG) share price has been on a steady climb since the beginning of 2016 with several pullbacks that are hardly noticeable on a 5-year timeframe chart. Within four years, Breville's share price has increased by over 100% and doesn't look to be stopping anytime soon.

The Breville share price traded at $7 in January 2016 and is currently continuing to push its all-time high of $17.97.

Breville's strong international brand name remains a cornerstone of its success

From Breville's financial report in 2018, sales revenue and profit continue to grow with strong overseas demand. The group saw its total revenue increase by 7.7% and gross profit increase by 16%. This was accompanied by a net profit increase of 8.7% and its earnings per share increasing from 41.4 cents to 45 cents.

Alongside the income statement, Breville's balance sheet and cashflow statement show healthy figures. Net cash from operating activities saw a 41% increase with receipts from customers increasing by 11.8%. This provides strong evidence of organic growth which is critical for the success of consumer discretionary businesses such as Breville.

Breville also increased its cash holding from the previous year. This surplus cash can be used for increasing the number of international stores or towards the research and development of its products.

From the recent half-year results, Breville's global product revenue continued to grow with Europe's double-digit increase being the standout performer. The Australia and New Zealand region experienced an increase of 7.9% which is impressive given the challenging retail environment.

Based on its current valuation, Breville trades at a PE of 35.5 compared to its industry of 27.4. This premium can be justified, however,  with the company's past performance and future outlook. With a strong half-year performance as such, Breville expects its EBIT growth rate to be higher than the market's expectations of 11%.

Provided that macroeconomic issues remain dormant, this forecast should be well within Breville's reach.

Foolish takeaway

Factoring in the current domestic economic conditions, Breville's strong offshore earnings can work towards providing assurance to shareholders. With its respectable international branding and strong financial position, I believe the Breville share price is likely to continue to reach new heights.

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Experiencing a great start to 2019, the Harvey Norman Holdings Limited (ASX: HVN) share price is up 20% since January.

Harvey Norman is an Australian based retailer with international operations. The operations exist primarily as franchises, with the brand name and company-operated stores owned by Harvey Norman Holdings.

From the 2018 financial report, Harvey Norman showed a decrease in profit after tax by 16% to $380 million. This 16% decrease also carried over to its earnings per share, dropping it from 40.35 cents to 33.71 cents. A reason for Harvey Norman's underperformance was due to growing competition and the continual rise in online purchasing. This resulted in the reduction of Harvey Norman's franchise fees which reduced franchising profits by 7.2%.

Due to Harvey Norman's extensive investment in its property portfolio, the 2018 domestic housing slowdown also contributed to its underperformance.

Why has Harvey Norman's share price continued to rally?

Despite the underperformance in 2018 which sent Harvey Norman's share price to 2014 levels, it has been steadily increasing since.

From the recent half-year report, Harvey Norman recorded growth of 7% in its profit after tax compared to the previous half-year. This was supported by the strong performance in its overseas stores which achieved a record-breaking, retail sales revenue of $1 billion. The total overseas retail profit has increased by 632% in the last five years and continues to look attractive. Harvey Norman is planning to open 18 additional stores overseas in the next couple of years due to strong demand.

Harvey Norman is currently trading at a PE of 10.7 which is a significant discount compared to an industry PE of 42.1. The total debt to equity that Harvey Norman carries is 31.79% which should allow it to take on more debt to grow future earnings.

Dividend cuts could have strong effects on Harvey Norman's share price

A ratio that potential investors should watch is the dividend payout of Harvey Norman. Currently, it sits at 89.04 which places significant pressure on the company to deliver strong earnings in future announcements. If overseas growth happens to slow, dividend cuts could be initiated which will impact Harvey Norman's share price.

Foolish takeaway

Harvey Norman pays a strong dividend and currently shows growth in offshore markets. With a slowing domestic economy, Harvey Norman has a valuable hedge which could show in the upcoming annual reports. Provided Harvey Norman can maintain strong revenue streams from overseas, a dividend cut shouldn't be imminent.

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The Service Stream Limited (ASX: SSM) share price has increased by over 20% since the start of 2019. Service Stream's all-time high of $2.26 was reached late March 2019 and currently trades at a share price of $2.18.

I think the 20% increase we've seen so far still has strong room for growth as we progress towards the annual reporting season.

Service Stream well positioned based on its financial statements

Service Stream is an essential networks service operator in mobile communications, fixed communications, electricity, water and gas.

From the recent half-year announcements, the profitability figures of Service Stream showed strong growth across revenue, EBIT, EBITDA and net profit. Revenue was up 18.3%, EBIT was up 20.3%, EBITDA was up 18.7% and net profit was up 21%. Earnings per share showed an increase of over 22% compared to the previous half year-report.

Service Stream's cash flow statement shows an increased cash reserve of 9% compared to the previous half-year report. Due to recent performance, dividends per share were also increased by 17% to 3.5 cents per share.

The recent acquisition of Comdain is expected to deliver revenues of $320 million and EBITDA of $22 million for the full-year, boosting profitability in its water and gas sectors. Service Stream has also performed a share buyback which alongside the acquisition, should see its earnings per share increase further in FY2019.

Service stream continues to show value in its PE of 17.2 compared to the industry trading at 26 times earnings. Furthermore, the company is continuing to expand its client base and has acquired crucial long-term customers. Recently, a new contract was entered with Telstra Corporation Ltd (ASX: TLS) until June 2021 to provide design and construction services, supporting Telstra's wireless infrastructure network.

Furthermore, the management team is diligent with its expansions. The acquisition of Comdain was performed when Service Stream carried an appropriate cash flow to debt coverage. A strong management team that understands the financial position of its business well is mandatory for future company growth.

Foolish takeaway

Service Stream is a business with a resilient theme, strong financials and currently priced at a discount compared to its industry. In addition to the expected increases in profitability, Service Stream's business should be capable of withstanding unexpected market turbulence.

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The Event Hospitality and Entertainment (ASX: EVT) share price has been trading sideways since 2015, generally between the regions of $12 to $15. The all-time high of $16.46 was reached in late 2015 and has not been broken since.

Event Hospitality and Entertainment is one of Australia's largest entertainment, tourism and hotel companies. Assets part of its entertainment division include Event Cinemas, GU Film House, and Birch, Carroll & Coyle Cinemas. The tourism and hotel companies consist of brands such as Rydges, QT Hotels and Resorts, Atura Hotels and Thredbo Alpine Resort.

Is Event currently positioned at a key turning point?

Based on the 2018 annual report, Event Hospitality and Entertainment showed a minor decrease in revenue compared to the previous year, alongside a flat net profit figure. Its entertainment division with revenue streams in Australia, New Zealand and Germany also showed weakness. The significant underperformance in Germany was primarily due to competition from the FIFA world cup.

As Event generates the majority of its revenue through cinema operations, standout titles with strong advertising are required to generate meaningful revenues. This becomes challenging as individuals realise that movie ticket prices offer poor value in comparison to streaming services which continue to grow. In 2017 and 2018, cinema attendance hit 20-year lows in countries such as the United States and Canada.

Conversely, Event's tourism and hotel companies showed strong growth. Occupancy rates increasing by 3% combined with an increase in the average room rate to $185 led to an increase in profits for the year.

Event Hospitality and Entertainment is looking to leverage technology in its tourism and hotel division to increase efficiency through automation. If successful, this can reduce the expenses in the balance sheet and further bolster earnings. Furthermore, the priority guest rewards loyalty program is another product that the company is improving. Over time, this will lead to higher membership and occupancy rates, resulting in stronger profits.

The current valuation of Event Hospitality and Entertainment shows a PE trading just below 20. There is difficulty in finding great value at this current share price as the company faces significant headwinds. However, the share price could be at its inflection point if cost reduction processes are implemented fast enough.

 Foolish takeaway

With the majority of its revenue being derived from cinema operations, Event Hospitality and Entertainment looks to be in a tricky situation. However, if it manages to sell the weak performers in its cinema portfolio and increase the efficiency of its other businesses, the share price could respond very quickly.

The Event share price is currently trading at $13.56.

The post Is the Event Hospitality share price at its inflection point? appeared first on The Motley Fool Australia.

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The Ansell Limited (ASX: ANN) share price has increased over 15% since the start of 2019 to trade at $25.50 at the close on Friday afternoon. Ansell's share price has experienced a slow but persistent climb since 2016 when it traded at $15.04 per share, which is around the same price it traded at back in 2012.

Ansell is a global leader in manufacturing safety products for the healthcare and industrials industry. Some of its products include examination and surgical gloves for the medical industry and heavy-duty protective gloves for the industrials industry. In 2017, Ansell sold its condom manufacturing business.

Ansell has announced a major transformation program to the company. Some of these changes include the development of a streamlined organisational structure and additional investment into a global supply chain. Ansell's program is estimated to cost up to $100 million USD but at the same time, is expected to reduce operating costs by $30 million USD in 2020.

Provided Ansell's transformation program stays on track (shareholders would be pleased to know that it's currently ahead of schedule), the share price is likely to respond in time.

Ansell's recent half-year results show promise

Compared to the previous half-year report, Ansell performed below expectation in the European market, but this deficit was offset with a strong performance in the United States. Industrial and healthcare growth showed increases of 6% and 3.8%, respectively.

Despite overall sales increasing, the profitability ratios slightly decreased. Part of this could be due to political factors such as the US-China trade war and the effect of Brexit in Europe. Although Ansell experienced a decrease in its profitability ratios, emerging markets showed increasing growth. India has a strong positive outlook and is one of the fastest population growth countries in the world. With economic power shift being a megatrend forecasted for the future, Ansell is well positioned to take advantage of the E7 economies.

Currently, Ansell's share price trades at a PE ratio of 23.44 which is a significant discount to its industry of 35.79. It's holding an appropriate debt to equity ratio of 40% and a dividend payout ratio of 56%. Ansell's half-year announcement reports that it is on track to reward shareholders with its 16^th consecutive year of dividend increases.

Foolish takeaway

Ansell is less affected by the slowing domestic economy as the revenues from overseas comprise more than 85% of its total revenues. Currently Ansell's share price shows value, especially if it manages to complete its transformation program ahead of time. I think Ansell's share price could reach the $30 mark to establish a new all-time high.

The post Can the Ansell share price break its all-time high? appeared first on The Motley Fool Australia.

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The Clover Corporation Limited (ASX: CLV) share price has increased by over 50% since the start of 2019. Clover currently trades at a share price of $2.20 and, I think, is likely to continue increasing.

Clover specialises in the production of DHA, a form of omega 3. As the human body is unable to naturally synthesise omega 3, we must rely on external sources such as diet, to obtain this important fatty acid.

Clover encapsulates and sells DHA to both infant formula and food and beverage companies that include it in its products. The encapsulation process is licensed by the CSIRO until 2027.

Clover has strong tailwinds

By February 2020, Europe has set a minimum DHA requirement to be included in infant formula. China is following Europe's footsteps and currently conducting talks regarding a minimum DHA requirement into infant formula too.

Additionally, Chinese consumers continue to favour imported infant formula, leading to an increased demand for Clover's products.

Critically, Clover has received confirmation from Chinese authorities that the Cross Border Economic Channel (CBEC) market remains open with no end date set. Additionally, 22 warehouses have been developed specifically to assist with the availability of western made infant formula. As the CBEC market allows Clover to access most of its customers, this confirmation provides much assurance to its investors.

Clover appears to be financially healthy which protects it against any unforeseeable short-term issues. Sales revenue showed an increase of 10% from the previous half-year to $34.3 million. The income statement shows a 40% increase in net profit and the cashflow statement experienced impressive organic growth from operations. Clover currently holds a $6.2 million cash reserve which is consistent with the previous half-year.

Based on the FY2018 annual report, a trailing PE ratio of roughly 46 is calculated. This appears expensive until the 108% growth in EPS is factored in, giving Clover a PEG ratio that reflects a more accurate valuation.

Foolish takeaway

Unlike traditional companies such as A2 Milk Company Ltd (ASX: A2M), Clover provides investors with strong exposure to the infant formula market through alternate methods with strong tailwinds. Given the confirmations from Chinese authorities and the macro trends in the near future, the Clover share price could continue pushing all-time highs for many years to come.

The post Can the Clover Corporation share price continue pushing all-time highs? appeared first on The Motley Fool Australia.

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The IDP Education Ltd (ASX: IEL) share price has been steadily increasing since 2015. Throughout 2018, IDP's share price started to gain momentum and finished the year close to its all-time high of $15.07.

This momentum increased into 2019 where IDP's share price skyrocketed by 21% off a strong half-year announcement released in February. Currently, IDP's share price trades slightly below $15 and I believe that the 21% gain in share price earlier this year could soon be overshadowed.

Brief background on IDP

IDP Education is an international educational organisation which primarily assists students interested in tertiary study at various locations around the world. Current placement locations include Australia, New Zealand, United States, United Kingdom, Ireland and Canada. With some of the best universities located in those regions, it's no surprise why students would seek IDP's assistance.

Additionally, IDP owns a majority of the IELTS language test which is the most common English test sat by students that wish to study in one of the countries listed above.

Why IDP short sellers could be punished

From the recent half-year announcement, IDP reported a substantial increase in all areas of its business. Revenue was up 26%, EBITDA was up 33% and the interim dividend was up 41%. These set of numbers have been one of IDP's best. To sweeten the deal, there was an increase in the IELTS test takers by 18% which allowed IDP to break a record in its test volumes recorded.

Despite IDP trading close to 67 times earnings based on the recent EPS figures, it's still cheaper than many other growth companies when IDP's growth is accounted for. By factoring in growth using a PE to ROE valuation, a value of 1.43 is obtained. Therefore, it becomes evident that IDP's share price shows reasonable value and is very much capable of increasing further. Short sellers won't be comfortable with such a scenario.

With the E7 economies becoming stronger over time, parents from those countries will place a larger emphasis on their children's tertiary education and encourage them to study at world-class institutions. This trend gives IDP an even stronger tailwind than it already has.

Now, do you see why the 21% gain in share price could soon be overshadowed?

Foolish takeaway

With a strong performance across all sectors and the tailwinds that IDP Education has, it's hard to see how IDP Education's share price will be slowing down anytime soon.

The post Can the IDP Education share price educate the short sellers? appeared first on The Motley Fool Australia.

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The Paradigm Biopharmaceuticals Ltd (ASX: PAR) share price has zoomed over 610% higher in the last 12 months. After jumping 10% higher on Monday, the Paradigm share price is currently trading near its all-time high at $2.07.

Paradigm is an Australian based company that focuses on the repurposing of pentosan polysulphate sodium (PPS). PPS shows anti-inflammatory and tissue regenerative properties which Paradigm is currently utilising to treat inflammation-based conditions.

Bone marrow edema is responsible for the pain in Osteoarthritis and acute joint injury, which Paradigm is treating using PPS. Other indications for PPS include alphavirus induced arthralgia, mucopolysaccharidoses (MPS) and allergic respiratory conditions.

Multiple share price catalysts around the corner

Many users of PPS have already reported a life-changing improvement in their quality of life post-treatment. In December 2018, Paradigm successfully completed its phase 2b randomised, double-blind, placebo-controlled trial. The primary results showed great potential with PPS being a viable option to treat Osteoarthritis.

Despite the success of Paradigm's phase 2b clinical trial, the share price lost momentum possibly due to portfolio rebalances at the time. After all, Paradigm was one of the few stocks to show strong gains in its share price throughout late 2018 while the overall ASX showed weakness. The secondary results for its phase 2b trial are bound to be released in Q1/Q2 CY2019 which should reiterate the potential of PPS.

Furthermore, Paradigm will treat up to 50 ex-NFL players experiencing pain from Osteoarthritis in the United States. Results for this should also be expected in Q1/Q2 CY2019. A successful result could drive strong media attention which can greatly benefit Paradigm's share price. Based on Paradigm's phase 2b trial, the risk of poor results has already been significantly reduced.

The equivalent analogy of Paradigm's current situation would be to get a glimpse of the exam answers before sitting the exam itself.

Other catalysts include the phase 2/3 clinical trials for MPS and will have results due in Q1/Q2 CY2019. The approval sent to TGA for the sale of iPPS in Australia will have results due in Q2 CY2019. The Ross River Virus focusing on the treatment of alphavirus-induced arthralgia will show results in Q2/Q3 CY2019.

Finally, the talk for partnerships has already begun with more news potentially released any time soon.

Paradigm has a huge addressable market

To give investors some perspective, in just the United States alone, Osteoarthritis costs the economy over $128 billion USD per annum. Paradigm, a sub $300 million AUD company has managed to develop a viable treatment for this condition.

In addition to the Osteoarthritis market, MPS and allergic respiratory conditions are also billion-dollar markets. In these markets, PPS also shows potential to be a superior treatment compared to current options available.

To boost investors' confidence, the management team leading Paradigm consists of individuals from world-class companies such as CSL Limited (ASX: CSL) and Mesoblast Limited (ASX: MSB). Clinical trials, resource allocation and partnership discussions are events that this management team would be well equipped to handle.

With Paradigm having found an answer to multiple billion-dollar markets, it may only be a matter of time until Paradigm becomes a leader in Australia's biotechnology industry. Although Paradigm's recent share price has showed impressive gains, current facts available indicate that the best could be yet to come.

For investors looking for more growth opportunities in the sector, this ASX company is poised to cash in on a $22 billion boom industry.

The post Over 610% higher in 12 months: The Paradigm share price still has plenty of growth ahead appeared first on The Motley Fool Australia.

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The Jumbo Interactive Ltd (ASX: JIN) share price has seen a sharp increase since February 2019. It is currently trading 3.32% higher for the day at $13.38, just below its all-time high.

Jumbo Interactive is a major operator of internet services for lotteries in Australia. Popular lotto games retailed by Jumbo Interactive include Oz Lotto, Powerball and Saturday Lotto.

What drove the recent 75% increase in Jumbo Interactive's share price?

The recent rally in Jumbo Interactive's share price was primarily due to the growing customer base interacting with the Jumbo Lotto platform. From the FY2019 outlook released in mid-February, Jumbo Interactive posted some convincing figures for many investors. From the FY2018 results, Jumbo Interactive is expected to increase its total transaction value by 62% to $296.4 million and its revenue by 53% to $60.8 million. Jumbo Interactive is also optimistic for its FY2019 EBIT figure which is expected to double from the previous year. These expectations were based off Jumbo Interactive's large jackpot activity which remains a primary driver for the growth of total transaction value.

The recent half-year announcement released by Jumbo Interactive was impressive. The financial statements reported a 57.9% increase in revenue to $30.5 million. Profit after tax saw an increase of 138.4% to $12.6 million with EPS doubling from the previous half-year report. The strong balance sheet showed a quick ratio of 3.46 indicating sound liquidity.

The cash flow statement showed organic cash growth from its operations and Jumbo Interactive currently holds a large cash reserve which enables future flexibility. The acquisition of a suitable company or a share buyback are two possible options. Furthermore, its dividend payout ratio sits at 33.71% which should be very sustainable for Jumbo Interactive's current financial position.

Can Jumbo Interactive's share price continue to increase?

Jumbo Interactive invests heavily in its online marketing and technology to grow its customer base. From the financial statements, it becomes evident that its key performance indicators are being met. The company has effectively utilised technology to attract younger users with its mobile platform now accounting for 75% of all user interactions.

Back in 2017 when Tatts bought a 15% stake in Jumbo Interactive, an agreement was also made with Jumbo Interactive to extend the relationship between the companies until 2022. With such an agreement in play for a few more years, I believe there remains room for growth in Jumbo Interactive's share price.

For investors looking for a different sort of growth stock, be sure to check out this ASX company which is set to benefit from a $22 billion boom industry in 2019.

The post Is the Jumbo Interactive share price still a buy after its recent 75% rally? appeared first on The Motley Fool Australia.

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Many individuals would have gotten a blood test at least once in their life. Those in Sydney may have been tested at a Douglass Hanly Moir, those in Melbourne might have been to Melbourne Pathology and for the residents of Adelaide, Clinpath may have been their choice. Sonic Healthcare Limited (ASX: SHL) is the parent organisation and provider for these crucial services. Alongside the pathology services which are the third largest in the world, Sonic Healthcare also provides laboratory, radiology and primary healthcare services globally.

Sonic Healthcare's share price is currently $24.64, not far from its previous $26.78 all-time high reached in August 2018.

Where does Sonic Healthcare's share price go from here?

Recent half-year reports by Sonic Healthcare showed a moderate increase in revenue of 9% with underlying EBITDA growth of 7%. In addition, earnings per share were up 5% totalling 51.9c alongside dividends increasing by 3.1%. Sonic Healthcare reported exceptional performance in its US, Australian and Swiss laboratory operations and appears to be on track to meet its earnings guidance for the year of 3% – 5% underlying EBITDA growth. With a trailing 12-month PE of 21.8, the value of Sonic Healthcare's share price is evident as it trades significantly below the industry average of almost 29 times earnings.

Towards the end of 2018, Sonic Healthcare announced the acquisition of Aurora Diagnostics for $750 million AUD. Aurora is a leading provider of pathology services in the US with over 32 practices, employing a total of 220 pathologists and having over 100 hospital contracts. The acquisition provides great value to Sonic Healthcare as it's expected to generate an accretive 3% in earnings per share which should be evident in its future financial reports. Factoring in this growth into its current valuation and the Sonic Healthcare share price can start to look quite attractive.

Looking at the balance sheet of Sonic Healthcare from the recent half-year announcement shows a large cash reserve which can always act as a margin of safety for the company and its stakeholders. In addition, the organic growth in cash flow will allow Sonic Healthcare to expand its international footprint through acquisitions and continue paying a steady dividend of 3.38% to its shareholders.

Foolish takeaway

Sonic Healthcare has announced a significant acquisition in the US with the potential to rapidly increase its profitability. If the company can meet its yearly earnings guidance and continue its current growth, Sonic's 2018 share price will soon be overshadowed.

For other blue chips companies to buy, be sure to check out these top 3 ASX blue-chips to buy in 2019.

The post Can the Sonic Healthcare share price break its all-time high? appeared first on The Motley Fool Australia.

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