What Does Smartgroup Do?
Smartgroup Corporation Limited [ASX:SIQ] is a salary packaging company that focuses on the government sector. The company listed on the ASX on 2 July, 2014.
What’s Happening to the Smartgroup Share Price?
Here is a daily chart of the stock…
Yesterday the company announced to the market that the Department of Defence had signed a new contract to continue receiving salary packaging from the company. The terms of that agreement will run until the end of June 2021.
The shares spiked nearly 20% on the news. They’ve pulled back today to trade at $2.03 at the time of writing.
What Now for Smartgroup Group?
According to the Australian Financial Review today, ‘In April, management provided profit guidance of $11.5 million, up from $8.5 million for the previous corresponding period. This suggests the company could be on track to outperform analysts’ expectations, and that the 12-month consensus price target of $2.35 may be conservative.’
Let’s wait and see what the chart says. It will be interesting to see if Smartgroup can hold the gains from this recent announcement. Should the market become stronger after June as we expect over at Cycles, Trends and Forecasts, hitting all time-highs again may not be far away.
Editor, The Daily Reckoning