Here's their latest report. Price target combined with dividend = 25% appreciation from here. GLTA

 

 

Davis + Henderson Corp.

Q2 Preview: Diversification Continues

? Davis + Henderson (DH-SP) will announce its Q2 financial results on Wednesday, August 8th. Management will host a conference call at 10:00 am ET on Thursday, August 9th to discuss the results (dial-in numbers are 1-888-231-8191, 647-427-7450).

? We are expecting $190 million in revenue (up 2% Y/Y) vs. $194 million consensus and EPS of
.45 down from
.50 in the year ago quarter vs.
.42 consensus. We estimate margins to decline 300 bps Y/Y to 23% given a customer repatriation of services and integration costs.

? During Q2, DH announced the acquisition of Avista Solutions for US$40 million. We would be looking for commentary on the Q2 conference call regarding integration efforts as the company builds out its lending technology division and expands its US presence.

? We view D+H as an attractive investment opportunity given its strong cash flow supports the dividend ($1.24/share) with a yield of 6.9% (we calculate a 68% payout ratio), and excess cash flow supporting reinvestment and debt repayments. Retain Sector Performer rating and $21 Price Target.