Bell Potter Update, page-8

Positive writeup in Smart Investor:
http://www.afrsmartinvestor.com.au/p/shares/three_stocks_at_the_value_end_of_95DHO8PtqzeIhVFPoR0V0H

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At the other end of the spectrum of valuation metrics is PS&C. The company has performed impressively since listing on the ASX in December 2013, and a robust 2013-14 result combined with the impact of a recent acquisition prompted analysts at Bell Potter to increase 2014-15 and 2015-16 earnings per share forecasts by 10 per cent and 5 per cent respectively.
The broker is forecasting PS&C to deliver a net profit of $6.8 million in 2014-15, implying earnings per share of 12.5¢ and representing year-on-year growth of 34 per cent.
Despite this strong growth profile, the company continues to fly under the radar, trading on a forward price-earnings multiple of 6.5 even after last week’s post-result re-rating.
Bell Potter increased its 12-month price target from $1.15 to $1.25 last week. This seems more in keeping with fair value, implying a price-earnings multiple of 10 relative to 2014-15 forecasts.
However, one of the most compelling aspects of PS&C is the strong position it is building in the cyber security industry. Last week’s acquisition of Pure Hacking complements the group’s existing IT security businesses, HackLabs and Securus.
Pure Hacking is a former BRW Fast Starters Top 100 entrant, with more than 400 customers. PS&C managing director Kevin McLaine flagged his intention to focus on this fast-growing sector, with the prospect of further acquisitions due to its high-growth, high-margin characteristics.
Cyber security also has defensive attributes as it is virtually a non-discretionary business expense with the potential loss of earnings through IT fraud far outweighing the cost of investing in preventative measures."