One small cap delivering on high expectations

Morgans Financial Limited

Class is a fast-growing leader in the provision of administration and portfolio management tools for managers of Self-Managed Superannuation Funds. Net growth in new SMSF accounts in the half-year was 15,365, an annualised growth rate of 27%, with Class estimating that it grew its market share of the SMSF administration market by 2.5% to 21.7%. This was reflected in strong first half revenues (up 31%) and growth in net profit up 28% to A$3.6m. However Class isn't cheap, with investors being asked to pay +30 times earnings for this growth out to 2019. The Class share price had de-rated by over 30% since late 2016 in line with comparable high-PE growth stocks, so it was conspicuous that the stock has re-rated by over 20% since its result upon delivering comfort that high expectations are being met. Amid a tumultuous few months for small-caps, we're encouraged that the market is still willing to recognise high-quality growth names, which are in scarce supply.

Morgans Financial Limited

Morgans is Australia's largest national full-service retail stockbroking and wealth management firm, with more than 300,000 clients, 500 authorised representatives and 850 staff, operating from offices in all states and territories. As well as...


No areas of expertise

ASX:CL1 February 2017 Reporting Season


Please sign in to comment on this wire.