Why Data#3 Ltd’s Share Price Is Rising

What does Data#3 Ltd do?

Data#3 Ltd [ASX:DTL] provides business technology solutions to customers across a wide range of industries. Based in Brisbane, they have offices and data centres across Australia.

What’s driving the share price?

The company is increasing revenues, driven largely by customer demand for cloud solutions.

The company delivered their FY2016 results on 22 August.

Revenue increased 13%, to $983 million, and net profit increased by 30%, to $14 million.

Fully franked dividends for the year increased by 27%, to 8 cents per share. That represents a payout ratio of 89%.

In more recent news, at its AGM meeting yesterday, the company confirmed that the preliminary outlook for the first half of this financial year will be up on the prior corresponding period.

The company has a particular strategy of building dedicated teams of experts to focus on, and work with, particular sectors of the market. That strategy is bearing fruit.

With a sustained focus on the education sector — the company sales to schools have surpassed $100 million — it has become a national leader in this sector.

One of the priorities for FY17 flagged in the AGM report yesterday is to establish a health sector team, to emulate the success achieved in the education market. The company is aiming to become a national leader in the health sector as well.

What now for Data#3 Ltd?

The company released preliminary positive profit forecasts at its AGM meeting yesterday.

The share price spiked up on the positive news. You could watch it now and see how it reacts to the news.

That will inform any investment decisions, as it gives you a reference point to guide you.

Should the share price continue to move higher, it might indicate further good news to come for Data#3.

Terence Duffy,
Cycles, Trends and Forecasts

Terence Duffy is an analyst and chartist, specialising in researching economic trends and cycles.  His primary focus is housing and land affordability. But you can also depend on him to offer his unique analysis of stock market charts. As Terence will show you, the charts often forecast, well in advance, the good or bad news to come.

Money Morning Australia