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Contents
Summary
Recommendation
(ENE.)
Strategy
Fund. Analysis
Tech. Analysis
Summary of recommendations
1
2
3
4
Stock
Recommendation
Company Name
Sector
Current
Price
Target
Stop
Loss
Time
Frame
ENE.
Buy
Energy Developments
Limited
Utilities
$3.37
$5.00
$2.55
12 months
GRO.
Buy
Gropep Limited
Pharm&Bio
$0.99
$1.50
$0.75
12 months
!! THIS IS A SAMPLE REPORT !!
Recommendation
(GRO.)
Strategy
Fund. Analysis
Tech. Analysis
5
6
7
Disclaimer
8
How to use this newsletter
We have divided each stock recommendation up into three specific sections to make it as easy for you to
navigate through the key information you need to ensure you have made the right decision in investing.
Strategy
Our Equities strategy page is a snapshot of a recommendation, in a very clear, concise fashion. This is
where you will find the strategy you can act upon immediately.
Quantitative and Fundamental Analysis
After reviewing the strategy summary, you can investigate the first of two levels of Wise-Owl analysis
that has led us to recommend this stock as a potential wealth creator. This quantitative and fundamental
analysis provides you with all the key performance indicators including cash flow and profits, financial
performance indicators and sector performance.
Technical Analysis
Technical analysis is another unique wise-owl technique employed to further evaluate stocks to ensure
you can invest with confidence that the homework and analysis has been done for you.
Note:
Please note that the following sections are only available to our members in the members section of the
website:
Portfolio Management Section that helps you manage your own portflio and contains all open
recommendations.
Stock Distribution History that helps you keep track of recommended stocks that have gone exdividend.
Wise-Owl Classroom that is focused on educating and empowering members.
A vast array of value-added services such as financial calculators, charts, prices and much more.
!! THIS IS A SAMPLE REPORT !!
Wise-Owl Equities Report Issue 0 - January 09, 2005 - Page 1 of 8 - (c)Copyright 2002-2005
Equities Report
Recommendation Strategy
Energy Developments Limited
(ENE.)
Sector
Utilities
Index
A200 Util
Market Capitalisation
451,580,000
Recommendation
Spec Buy
Buy
Add
Low
Medium
High
Risk Rating
Hold
Sell
Strategy
First Recommended
27/06/2004
Share Price
$3.37
12 Month Price Target
$5.00
Suggested Stop Loss
$2.55
How many shares do I buy
Trade = Amount ($) you're prepared to lose
Size
Market Price - $2.540
Note. Amount ($) you are prepared to lose is
typically 2-3% of the TOTAL amount you have to
invest
wise-owl Checklist
Strong management team including new
MD Chris Laurie, previously MD of Orion,
NZ
Summary
This section aims to give you a snapshot of the recommendation in a very clear
and concise fashion and more importantly leaving you with a strategy to act upon
immediately.
Background
Financials improving and the key will be
Energy Developments Ltd (ENE) is an international renewable energy provider
the impact if any, of specific items, such
which provides services in the following areas of business: remote area power
as Deutz operating costs
generation, landfill gas power generation and coal mine waste methane power
A return to dividends payments of 1.5c is
a sign of confidence by management
generation.
Investment Summary
A very strong institutional register
ENE is a turn around story with improving fundamentals benefiting from a strategy
including the like of Orion, Goldman
of returning back to the core business of renewable energy.
Sachs an Investors Mutual
Stock showing signs of testing important
support at $3.50 which is likely to lead to
a strong rally
Wise-Owl Equities Report Issue 0 - January 09, 2005 - Page 2 of 8 - (c)Copyright 2002-2005
Equities Report
Fundamental Analysis
Quantitative and Fundamental Analysis
Revenue & Profitability
2004 FY 2003 FY 2002 FY
PE Ratio (x)
NA
NA
NA
Revenue
NA
per Share ($)
NA
NA
Earnings
-0.07
per Share ($)
-1.04
0.17
Dividend
Yield (%)
NA
NA
NA
After reviewing the strategy summary, you can investigate the first of two levels of WiseOwl analysis that has led us to recommend this stock as a potential wealth creator. The
quantitative and fundamental analysis provides you with an analysis on; the management
team, key operating and profitability ratios, sector performance and the key share price
driver.
Management
Chris Laurie (Managing Director)
Profit
Margin (%)
NA
NA
NA
Return on
Assets (%)
-1.49
-18.39
2.91
core business and is well respected in the industry.
Return on
Equity
-3.08
-37.53
5.87
Michael Brown (Chairman)
Over 15 years of experience as MD of Orion New Zealand, Chris is helping ENE back to its
Over 20 years of experience in the energy industry including working for Exxon and has
plenty of board experience as a director of a number of public listed companies
ENE. vs. Sector Average
PE Ratio (x)
Operating Performance
ENE.
Sector Average
Net profit after tax excluding specific items for the financial year 2004 was 11% higher at
NA
NA
$18.6m. After taking out specific items, primarily relating to US Deutz operating costs, the
Revenue
0.97
per Share ($)
0.23
Earnings
-0.07
per Share ($)
-0.04
Dividend
Yield (%)
0.53
0.11
Profit
Margin (%)
-7.10
-5965.08
result was a net loss of $8.9m. With $77m in cash and management confident that they
finally turned the corner, the decisions to return to dividend payments (1.5c paid on the
5th of October) has been welcomed by shareholders and institutions.
Growth/Value Story
The turning point for ENE was the decision to finally cease funding for the SWERF project
rating for ENE along with a re-shuffle of the board, a new MD and a focus back onto the
Return
-1.49
on Assets (%)
-23.63
Return
on Equity
-33.38
-3.08
which has wasted a lot of money and resources for ENE. This has proved to be a major recore business of renewable energy. The agreement by Deutz AG to guarantee the
performance of the engines is an important step that should bring about stability in
profitability, especially in the US. This is the major factor towards whether ENE will reach
their expected net profit after tax of between $24m to $27m. The West Kimberly Project
and the German Creek waste coal mine methane project continue to be strong growth
opportunities for ENE
Wise-Owl Equities Report Issue 0 - January 09, 2005 - Page 3 of 8 - (c)Copyright 2002-2005
Equities Report
Technical Analysis
Technical analysis is another unique Wise-Owl technique
employed to further evaluate stocks to ensure you can invest
Trends Short Term Trend Medium Term Trend Long Term Trend
(daily)
(weekly)
(monthly)
with confidence that the homework and analysis has been done
for you. The short, medium and long term trends are analysed
along with significant charting patterns. Key price levels are
discussed that are likely to have an impact on share price
performance.
Note:
Please note that the Open and Closed Portfolios as well as the
Stock Distribution History are available online on the Wise-Owl
website.
With a wedge reversal ending the long term bear channel in
2003, stock is showing signs of continuing this rally. The key
level remains a break above $3.50 which is likely to lead to a
strong rally; otherwise, the risk is a break below the short-term
up trend at $2.50.
Wise-Owl Equities Report Issue 0 - January 09, 2005 - Page 4 of 8 - (c)Copyright 2002-2005
Equities Report
Recommendation Strategy
Gropep Limited (GRO.)
Recommendation
Spec Buy
Buy
Add
Low
Medium
High
Risk Rating
Sector
Pharm&Bio
Index
A200 Hlth
Market Capitalisation
43,956,000
Hold
Sell
Strategy
First Recommended
25/07/2004
Share Price
$0.99
12 Month Price Target
$1.50
Suggested Stop Loss
$0.75
How many shares do I buy
Trade = Amount ($) you're prepared to lose
Size
Market Price - $0.740
Note. Amount ($) you are prepared to lose is
typically 2-3% of the TOTAL amount you have to
invest
wise-owl Checklist
Strong scientific management board has
been strengthened by Tony Mitchell (CFO)
adding a more commercial focus
Summary
This section aims to give you a snapshot of the recommendation in a very clear
and concise fashion and more importantly leaving you with a strategy to act upon
immediately.
Background
Consistency growth in revenue over the
GroPep Ltd (GRO) was founded in 1988 by CSIRO and the University of Adelaide
years with their best performance to date
and is now focused on the development, manufacture and commercialisation of
of $1m NPAT in FY 2004
biopharmaceuticals and also biologically active proteins for cell culture and
Profitable biological division that should
continue to provide strong cash flows and
growth for new products. $US revenue
has also been hedged
biomedical research.
Investment Summary
GRO is recommended as a ‘speculative buy’ for growth at current prices. Strong
growth in cash flows should help them achieve their financial targets.
Strong institutional register including 452
Capital and JP Morgan
Resistance at 97c broken with long term
down trend about to be tested.
Wise-Owl Equities Report Issue 0 - January 09, 2005 - Page 5 of 8 - (c)Copyright 2002-2005
Equities Report
Fundamental Analysis
Quantitative and Fundamental Analysis
Revenue & Profitability
2004 FY 2003 FY 2002 FY
PE Ratio (x)
NA
NA
NA
Revenue
NA
per Share ($)
NA
NA
Earnings
0.02
per Share ($)
-0.06
-0.17
Dividend
Yield (%)
NA
NA
NA
After reviewing the strategy summary, you can investigate the first of two levels of WiseOwl analysis that has led us to recommend this stock as a potential wealth creator. The
quantitative and fundamental analysis provides you with an analysis on; the management
team, key operating and profitability ratios, sector performance and the key share price
driver.
Management
Robert Finder (Managing Director)
Profit
Margin (%)
9.09
-28.06
-100.42
Return on
Assets (%)
4.72
-9.96
-26.49
engineer who previously was the CEO of Mayne Pharma.
Return on
Equity
5.68
-13.78
-35.58
Tony Mitchell (Chief Financial Officer)
With over 30 years of business experience in the industry, Robert also is a chemical
Joined in January 2003 and has held senior financial management roles with the likes of
Mayne Pharma, FH Faulding and Coca Cola.
GRO. vs. Sector Average
PE Ratio (x)
Operating Performance
GRO.
Sector Average
For the FY 2004, GRO achieved a net profit after tax of $1m, on the back of a strong
48.50
29.62
result from the company’s Cell Culture Products. This turnaround in performance has been
Revenue
0.25
per Share ($)
1.16
Earnings
0.02
per Share ($)
0.04
Dividend
Yield (%)
0
0.43
Profit
Margin (%)
9.09
-185.92
achieved after a number of years of very steady and impressive revenue growth. GRO are
on track to achieve $1.5m profit for the FY 05 and have a longer term target of doubling
their revenue by 2008 via their new product developments. With over $10m in cash and a
smart hedging policy in place, GRO are set to achieve this.
Growth/Value Story
building block that will allow GRO to pursue other growth opportunities. Having increased
Return
4.72
on Assets (%)
-15.37
Return
on Equity
13.94
5.68
Clearly, the continued success of Biological Products Division continues to be the major
revenue by 21% last FY, GRO forecasts that for FY 05, the division should grow by at least
another 30%. A $3m upgrade to the manufacturing facility at Thebarton has been
announced.
GRO is also focused on two key projects:
1/ Infertility Project (PV903) for the treatment of recurrent miscarriage, in a market
estimated at US$750m pa. Decision just made to go ahead with Phase 1a clinical trials.
2/ Psoriasis Project (PP0102) for the treatment of psoriasis, in a market estimated at
US$1bn pa. Phase 1 trials expected to commence in 2005/06
Wise-Owl Equities Report Issue 0 - January 09, 2005 - Page 6 of 8 - (c)Copyright 2002-2005
Equities Report
Technical Analysis
Technical analysis is another unique Wise-Owl technique
employed to further evaluate stocks to ensure you can invest
Trends Short Term Trend Medium Term Trend Long Term Trend
(daily)
(weekly)
(monthly)
with confidence that the homework and analysis has been done
for you. The short, medium and long term trends are analysed
along with significant charting patterns. Key price levels are
discussed that are likely to have an impact on share price
performance.
Note:
Please note that the Open and Closed Portfolios as well as the
Stock Distribution History are available online on the Wise-Owl
website.
After reversing off a double bottom formation in 2003, the stock
has set out on a new uptrend. With the long term downtrend
being tested since 2000, stock appears to have broken resistance
at 97c, showing strong continuation patterns.
Wise-Owl Equities Report Issue 0 - January 09, 2005 - Page 7 of 8 - (c)Copyright 2002-2005
Equities Report
Disclaimer
This report was produced by PPS Investments Pty Ltd (ACN 097 446 369), trading as Investment Wise, which is an Australian
financial services licensee (Licence no. 246670). PPS Investments Pty Ltd has made every effort to ensure that the information and
material contained in this report is accurate and correct and has been obtained from reliable sources. However, no representation is
made about the accuracy or completeness of the information and material and it should not be relied upon as a substitute for the
exercise of independent judgment. Except to the extent required by law, PPS Investments Pty Ltd does not accept any liability,
including negligence, for any loss or damage arising from the use of, or reliance on, the material contained in this report. This report
is for information purposes only and is not intended as an offer or solicitation with respect to the sale or purchase of any securities.
WARNING: This report is intended to provide general financial product advice only. It has been prepared without having regarded to
or taking into account any particular investor’s objectives, financial situation and/or needs. All investors should therefore consider the
appropriateness of the advice, in light of their own objectives, financial situation and/or needs, before acting on the advice. Where
applicable, investors should obtain a copy of and consider the product disclosure statement for that product (if any) before making
any decision. DISCLOSURE: PPS Investments Pty Ltd and/or its directors, associates, employees or representatives may not effect a
transaction upon its or their own account in the investments referred to in this report or any related investment until the expiry of 24
hours after the report has been published. Additionally, PPS Investments Pty Ltd may have, within the previous twelve months,
provided advice or financial services to the companies mentioned in this report. As at the date of this report PPS Investments Pty Ltd
and/or its directors, associates, employees or representatives currently hold interests in the following companies: EQI, IAG, IGO,
TIM, SMY, TLS. This report may not be reproduced, distributed or published for any purpose, unless the person or entity seeking to
do so is expressly authorised in writing by PPS Investments Pty Ltd. NOTES: MPM spun-off Leviathan Resources - LVR shares (18-1104). GDP exchange code changed to LFE (01-12-04). MPM taken over by LIM. $1.00 cash and 0.1675 LIM for every MPM share held
(05-01-05).
Wise-Owl Equities Report Issue 0 - January 09, 2005 - Page 8 of 8 - (c)Copyright 2002-2005