FlexiGroup Limited

By Stephen Hogan, Senior Private Client Adviser, Equities/Derivatives Australian Market The Australian market (XJO) closed down -29.3 points or 0.56% to 5191.7 today.

Financial services provider Flexigroup Limited (ASX: FXL) climbed 5.2% to end at $4.25. The company reported a 16% increase in net profit for the first half of 2013 last week, and signalled that it is making a big push into the small business market. Many small businesses prefer to rent equipment rather than buy it outright, and Flexigroup sees an opportunity to grow its business further.

Credit Suisse rates as Neutral (3) - The broker notes the company has announced a $273m provision to its residential inventory.

Citi rates as Sell (5) - The broker notes Boral has upgraded its 1H net profit guidance by 49%, leaving the broker to guess that the upside has come from an improvement in weather conditions.

For those of you looking to benefit from the rise in store financing, you could have a closer look at Flexigroup (ASX: FXL) and Thinksmart (ASX: TSM), both of whom offer financial products to retailers that allow customers to rent or finance their purchases.

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Flexigroup Limited (ASX: FXL) lost 5.6% to end at $3.73. Investment bank Goldman Sachs downgraded the financial services group to ‘Neutral’, after noting the stock had risen more than 100% since January. The broker believes the company has plenty of growth ahead of it, but thinks much of it has been priced in. Maybe they read the Motley Fool’s article written last week?

Back in February this year, Flexigroup Limited (ASX: FXL) was trading on a forecast P/E of 9.3 and paying a fully franked dividend yield of 5.5%. I suggested at the time that the stock looked very interesting and was deserving of a closer look.

Macquarie rates as Outperform (1) - eral Resources has delivered Fortescue's ((FMG)) Christmas Creek 2 facility on time and on budget.

Citi rates as Neutral (3) - The broker expects to see an in-line result next week, driven by lower interest and tax expenses, which will be somewhat offset by ongoing margin erosion in the US and Asia Pacific.