Whitehaven Coal Ltd
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WHC Details
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Solid production: Whitehaven Coal Ltd (ASX: WHC) rallied over 2.43% on May 27, 2016 leading to returns of over 12.75% in the last five days, driven by the ongoing rally in the commodity prices. We believe the momentum in the stock would continue in the coming months. Moreover, WHC had earlier offset the commodity prices pressure by improving its production and delivered ROM coal production of 44% during this year to date (as of April 14, 2016). WHC even witnessed a solid quarterly saleable coal production of 5.3Mt for March quarter of 2016 which is an increase of 28% against prior corresponding period. The group reported that its Maules Creek would ramp up to 10.5Mtpa which would start in January 2017 and is on track to meet its FY2016 guidance for saleable coal to be in the range of 19.5Mt to 20.1Mt at costs forecast of over $57/t.
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Recommendation: We maintain our “Speculative Buy” recommendation on the stock at the current price of $0.84
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Managed production and sales highlights (Source: Company Reports)
Spotless Group Holdings Ltd
SPO Details
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Outstanding dividend yield: Spotless Group Holdings Ltd (ASX: SPO) recovered over 3.8% on May 27, 2016 after the stock fell about 12.3% from May 23 to May 26 leading to a decline of over 16.22% in the last four weeks. The decline in the stock is partly due to major holder cease by UBS group in May 2016. However, Mondrian Investment partners gained over 55.08 million in the group. We believe that the recent correction is a bargain opportunity to investors as they are trading at a lower P/E and has an outstanding dividend yield.
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Recommendation: We give a “Speculative buy” recommendation on the stock at the current price of $1.085
Aristocrat Leisure Limited
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ALL Details
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Strong first half of 2016 results: Aristocrat Leisure Limited (ASX: ALL) rallied about 2% on May 27, 2016 driven by its favorable first half of 2016 results. The group delivered a normalized net profit after tax and before amortization of acquired intangibles (NPATA) of $183 million which is a rise of 66% in reported terms and 54% growth in constant currency terms against $110 million in the prior corresponding period. This increase was boosted by its better average selling price as well as rise in overall average fee per day across its core segments in North America and Australia. Growing Daily Active Users in the Digital social gaming business also contributed to this rise. As a result, ALL stock surged over 28.70% in the last four weeks (as of May 27, 2016) placing them at higher levels while the stock trades at an unreasonable P/E.
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Recommendation: We give an “Expensive” recommendation to the stock at the current price of $12.69
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First half of 2016 results (Source: Company reports)
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