Growth Focus: IVE Group Ltd (IGL)

by Patrick Taylor

Date of Data Capture: 26/4/2018


Classification: Advertising & Marketing

Current Price: $2.23

Market Capitalisation: $321M

Forecast EBITDA Growth: 37.50%

Yield Estimate: 7.31%

Consensus Price Target: $2.77

# Covering Analysts: 3

Discount at Current Price: 24.22%

Price Target Trend: Increasing-Flat

Signal Timeframe: Monthly-Weekly-Daily

Trend Bias: Up-Flat / Long-Short

Short-term: Positive
Medium-term: Positive-Neutral
Long-term: Positive

Recommendation: Buy

Focus: (Dividend Income &) Capital Growth

Set up Notes:

·    Prone to making strong rallies and then grinding lower through drawn out consolidations, IGL is an attractive stock if you can catch it at the beginning of a new rally, we think that is now.

·    Earnings rose 29% in 2016, 37% in 2017 and further strong growth is forecast across sales, margins and earnings out to 2020, with a current 24% discount to rising consensus target prices.

·    Pricing shows cyclical rallies of 20-30% before slowly pulling back and then running once more - fresh positive signalling is coming through again here across multiple timeframes.

·    Resistance targets sit at $2.25, $2.30 and $2.45 with good support layered down from $2.20, $2.15 and $2.00 if needed.

Growth Focus: IVE Group Ltd (IGL)

Our primary focus here is capital gain, we will select our stocks from the ASX Top 500 All Ordinaries Index.

Communications services provider; Ive Group Ltd (IGL) has been a strong performer for the last few years and has seen their share price cycle upwards, but here we believe the print and promotions specialist could be about to press forward once more.

Opening doors in Sydney 1997, IGL is a leading marketing and print communications provider operating in Australia through four businesses brands; Kalido, Blue Star Group, Pareto Group and IVEO. Growth has been steady to strong over the last few years with 2017 delivering almost 30% earnings growth with positive forecasts in place through to 2020 backed by strong sales and steady to increasing margins. In addition to consistent organic expansion the company has an active acquisition strategy in a sector open to consolidation.

While we normally don’t pay too much attention to dividend yield for our growth stocks, here it is worth mentioning as it is forecast to come in at around 7% which is a significant level of income on a growth stock. Further growth is expected with forecast showing elevated sales and earnings through to 2020, supporting a majority positive consensus sentiment with target pricing showing a current discount of around 25%.

Pricing history shows two major medium-term rallies since listing in late 2015, with each rally consolidating back over time before rallying again. It is happening here again and we see positive momentum signalling across multiple timeframes as the price works off support after breaking linear resistance in December and since successfully tested $2.00 support. 

Some minor structural resistance remain overhead at $2.25 and $2.30 but the main attractive resistance target from here would be the zone between $2.45 and $2.50 that was established in 2017 and 2018, and we have decent structural support layered beneath at $2.15, $2.10 and $2.00. The technical model shows good correlation and looks very promising here, particularly in the medium-term/weekly frame which is on the cusp of turning green right now and should combine well with positive signalling we see in longer and shorter timeframes.

With a strong combination of technical setup and strong fundamental performance and forecasts we like IGL for an entry here on the view that they are likely to continue distributing good news to shareholders.


This report was produced by Taylor Securities Pty Ltd, which is a Corporate Authorised Representative (Number 414063) of Bespoke Portfolio Pty Ltd (AFSL 341991). Taylor Securities and Patrick Taylor (Representative number 414064) have 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, Taylor Securities and Patrick Taylor 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 or financial products. The securities or financial products recommended by Taylor Securities and Patrick Taylor carry no guarantee with respect to return of capital or the market value of those securities or financial products. There are general risks associated with any investment in securities or financial products. Investors should be aware that these risks might result in loss of income and capital invested. Neither Taylor Securities and Patrick Taylor nor any of its associates guarantees the repayment of capital. 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. Accordingly, no recipients should rely on any recommendation (whether express or implied) contained in this document without obtaining specific advice from their advisers. 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.

Subscribe to our Daily Newsletter?

Would you like to receive our daily news to your inbox?