Growth Focus: Shine Corporate Ltd (SHJ)

by Patrick Taylor

Date of Data Capture: 8/10/2019


Classification: Personal Legal Services

Current Price: $0.83

Market Capitalisation: $144 M

Forecast EBITDA Growth: 9.70%

Yield Estimate: 4.92%

Consensus Price Target: $1.05

# Covering Analysts: 2

Discount at Current Price: 26.51%

Price Target Trend (3-Month): Flat +2.94%

Signal Timeframe: Quarterly-Monthly-Daily

Trend Bias: Up-Down / Long-Medium

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

Recommendation: Buy

Focus: (Dividend Income) & Capital Growth

Set up Notes:
• Shine is offering investors a glimmer of hope here, with good forecasting and strengthening performance combining well with an attractive technical outlook and building momentum.
• Softer earnings in 2018 gave way to more robust expansion in 2019, this is expected to continue through 2022 on improving sales, margins and profits, with a good discount and yield rate adding to its strong capital growth potential.
• Pricing moved lower within linear downtrend for 12 months until mid-2019, and has since rallied up to minor resistance near 85c, though now looks ready to test overhead targets with strong signal correlation across multi-timeframes.
Support ($): 0.80, 0.75, 0.70 & 0.65.
Resistance ($): 0.85, 0.90, 1.00, 1.25 & 1.50.


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

By waiting for stocks to emerge from consolidation you can sometimes locate companies that are just beginning to knock the rust off a new uptrend. We think we may have here with Shine Corporate, as the litigation specialist begins to live up to its name once more, and has been moving higher on positive momentum and attractive forecasting.

Listing on the ASX mid-2013, Shine is a legal services entity specialising in insurance recovery and personal injury practice, with minor but expanding business areas in disability, superannuation, class actions and compensation claims. The company’s core focus remains in damages-related plaintiff litigation and currently operates primary throughout Australia, with early-stage, but growing interests in New Zealand.

The company maintains an active acquisition strategy within largely a fragmented market, this was most recently reflected in the takeover of Carr & Co, and Shine has ongoing plans to grow national footprint and continue growing exposure to overseas markets. Also proactively investing in organic growth the company is involved in building innovative platform technologies with a focus of improve scalability and margins; May 2019 saw the launch of Claimify, a fixed-price algorithmic AI interface capable of predicting case outcomes and dramatically cut settlement periods.

Shine has been showing mixed signs of overall growth, and while sales gains have remained steady, income and earnings showed softer growth in 2018, before picking back up again in 2019. Forecasting currently shows this renewed growth pattern is set to remain steady out to 2022, with increasing profits expected to boost dividend yield above 5% and towards 6% during the same period. Analyst coverage is thin with only two registered valuations, but both of these show very positive sentiment and strong discounts to current price levels.

Pricing history shows a strong run post-float, with the share price more than doubling from 2013 until 2015, before a brutal consolidation brought valuations lower by 85% by 2016. This downtrend had been hard to break, with failed rallies seen in 2016 and 2018, but here we are seeing good structure and momentum emerging as the stock seems ready to move higher again. We are following strongly positive long-term signalling here, well-supported by good momentum in the shorter timeframes and if you like recovery plays, it is easy to make the case for Shine, and it begins to show its value once more and should be sure to catch the eye of investors.


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.

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