It's been a choppy results season for companies, with some big losers today. iSentia Group Ltd (ASX: ISD) was among those getting sold off, with the company's shares falling 6% to $1.63 as revenue fell 1% and underlying profit fell 24%.
Worse, as previously indicated to the market, iSentia wrote down the value of its King Content business entirely, confirming that the business is functionally worthless despite just being acquired in 2015.
iSentia continues to expand in Asia and the company reports it has market penetration of approximately 10% to 15%, with potential future penetration of up to 60% to 70%. However, given the company's recent mis-steps with acquisitions, I'm wary of its plan to increase market penetration via acquisitions in the future. I'm avoiding the company for now.
Steadfast Group
Another business getting sold off was insurance broker Steadfast Group Ltd (ASX: SDF), whose shares fell 8% to $2.53 despite reporting underlying profit growth of 10%. This is despite writing record new amounts of insurance and expanding into New Zealand and Singapore.
In my opinion, it's likely that Steadfast's high price tag is worrying a few shareholders, with the company priced at around 30x earnings or 2x its net assets (book value). Even with forecast profit of $70 million to $75 million in 2018, the company looks expensive to me.
However, Steadfast has a track record of growth and has been a respectable performer in recent years. I would look at the company more closely, but I think it would have to be quite special to attract an investment from me today.
