Canaccord|BGF did a research note back in Feb 2012.CMG has...

Canaccord|BGF did a research note back in Feb 2012.

CMG has reported a strong 1H12 result up 55% in revenue to $771.4m and up 50% up in EBIDA to $19.9m

· 1H12 EPS was up 40%, with the RHD acquisition benefits delivering, and also organic revenue growth robust (up 11%)
· The business performance was solid across all divisions
· CMG announced the acquisition of AHS services, which is 14.4% EPS accretive on our FY13 forecasts
· Management remains positive, with a strong forward pipeline, and 36 contract wins in the 1H (CMG is winning market share)

We have upgraded our FY13 EPS by 19.0%, with favourable amortisation adjustments.
We consequently increased our DCF valuation to $0.60 (from $0.55), and reiterate our BUY recommendation.

CMG is trading on a FY12 PER of 7.8x and FY13 PER of 6.2x which represents an excessive discount, relative to our forecast EPS growth of 26.7% in FY12, and 25.3% (FY13)