Home » VectorVest » Reiterate Buy Defenx (DFX) says VectorVest. Despite surpassing our previous target, shares still offer an enticing growth investment opportunity

Reiterate Buy Defenx (DFX) says VectorVest. Despite surpassing our previous target, shares still offer an enticing growth investment opportunity

FREE! For free VectorVest analysis on any stock, go to this link here

On February 16th 2017, we first wrote about mobile cyber security group Defenx PLC (DFX.L). To remind you, the Company provides security solutions with a range of products for mobile devices and personal computers (PCs), protecting them against hackers and data loss. The Company offers Defenx Mobile Security Suite for iPhone operating system (iOS) and enterprise network attached storage (NAS) antivirus software. It operates through three segments: Mobile, PC and NAS. The Company’s product, Defenx Mobile Security Suite offers protection from data loss, viruses and other malware intrusion, phishing and other attack. The Company’s product, Defenx Security Suite and Defenx Antivirus offers PC protection from data loss and hacker exploits. The NAS Antivirus, sold as Seagate Antivirus, provides antivirus protection with daily updates, e-mail updates and event driven notification. Its product, Defenx Cloud Backup provides backup, synchronization and sharing of data, such as documents, music, video and pictures on Windows, Apple and Linux PCs, as well as Android, iOS and Windows 10 devices.Image result for defenx plc logo

Following the bullish trading update discussed in our February article, DFX then reported preliminary results for the year on April 11th 2017, and confirmed expectation of a fifth year of profitable growth – 58% year-on-year growth in revenue to €7.09m, with a significant 10% increase in average revenue per user (ARPU). Operating profits grew 88% to €1.84m, driven by strong cash generation (before development costs) of €2.32m in operating cash inflow (2015: €1.02m outflow). Post year end, DFX also announced a long-term strategic partnership with Italian cyber solutions group BV-Tech. CEO Andrea Stecconi called 2016 “a year of significant progress”, adding that DFX “is in a strong position to continue its strategy to launch new products, enter new markets and broaden its management team in 2017”. Along with other cyber security companies, DFX shares have received a general uplift this week on the back of the global cyber-attacks that took place on organisations such as the NHS over the past weekend.

In our February article, we described how VectorVest metrics had flagged up the material undervaluation of DFX when the shares traded below 70p in early November 2016. Cautious investors should note that the RS (Relative Safety) rating is below par at present, but DFX still retains a high VST-Vector (VST) rating, currently at 1.25, which is very good on a scale of 0.00 to 2.00. Added to this the GRT (Earnings Growth Rate), which reflects a company’s one to three year forecasted earnings growth rate in percent per year, logs DFX at 24%, which VectorVest considers to be excellent. We view this as a stock to own for above average, long-term capital appreciation. Following the full year results, VectorVest logs a current value of 196.55p, so although DFX has hit and passed our earlier valuation, it still remains undervalued.


The chart of DFX.L is shown above using candlestick format to graph the price. Above the price the green line study is the VectorVest calculated valuation and in the window below the price the blue line study charts the earnings per share (EPS). The share has broken and kissed an important horizontal resistance level and is trending strongly upwards on rising momentum (not shown). The latter bodes well for a further advance.

We still reiterate our cautious statement from February that an investment in DFX shares does not come without risk. But given that the stock has already hit and passed our initial Feb target, VectorVest believes the full-year results and upbeat outlook, coupled with the increasingly obvious opportunities that exist for cyber security in the world today, continue to position DFX shares as an enticing growth investment opportunity.

David Paul

May 17th 2017

Readers can examine trading opportunities on DFX and a host of other similar stocks for a single payment of £5.95. This gives access to the VectorVest Risk Free 5-week trial, where members enjoy unlimited access to VectorVest UK & U.S., plus VectorVest University for on-demand strategies and training. Link here to view.

FREE! For free VectorVest analysis on any stock, go to this link here

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European Financial Publishing Limited T/A VectorVest UK (VectorVest) is authorised and regulated by the Financial Conduct Authority under register number 543038. You should remember that the value of investments and the income derived therefrom may fall as well as rise and you may not get back the amount that you invest. Past performance is not a reliable guide to the future. This material is directed only at persons in the UK and is not an offer or invitation to buy or sell securities. If investors are in any doubt of the suitability of an investment given their individual circumstances, they are recommended to contact an investment manager or independent financial adviser who may be able to provide tailored advice. Opinions expressed whether in general or both on the performance of individual securities and in a wider economic context represent the views of VectorVest at the time of preparation. They are subject to change and should not be interpreted as investment advice. VectorVest and connected companies, clients, directors, employees and other associates, may have a position in any security, or related financial instrument, issued by a company or organisation mentioned on this site. European Financial Publishing Limited is a company incorporated in Scotland under Company Number SC357322 with its registered address at Exchange Tower, 19 Canning Street, Edinburgh EH3 8EH. Email: support@VectorVest.com

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