Greencross Limited
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GXL Details
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Increase in Credit Suisse voting power: Greencross Limited (ASX: GXL) stock plunged over 7.5% on June 07, 2016 impacted by the group’s update of Credit Suisse increased voting power. As per the reports filed by GXL, Credit Suisse have been gradually increasing its stake in GXL since February and currently has 14.577 million shares and 12.7% voting power. The group is a clear market leader as compared to its immediate competitors and intends to further boost its network with more than 350 stores and 350 vet clinics. GXL is also aiming to be a leading player in online platform as well as is seeking to enhance sales of private label and exclusive products. GXL is also offering a one stop shop for products, veterinary care, grooming, DIY dogwash and specialty medical. The group is already cross selling via its existing portfolio.
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Recommendation: We maintain our “Hold” recommendation on GXL at the current price of $7.34
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Leading specialty pet retailer and veterinary group in Australasia (Source: Company Reports)
Primary Health Care Ltd
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PRY Details
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Strategic update: Primary Health Care Limited (ASX: PRY) stock surged over 0.77% on June 07, 2016 driven by the group’s strategic update today. For medical centers private billing, the group is focusing on diversification of revenue, launching new brands and intends to offer a differentiated proposition by leveraging its scale. The group is focusing to improve efficiencies for its mature pathology business. PRY also boosted its capital position by selling Barangaroo for $40m in March 2016 and Medical Director for $156 million sale in May 2016. PRY even cut its net debt position to over $900 million (pre-tax) from capital recycling as of first half of 2016. On the other hand, the Government has decreased its Bulk billing incentive which would continue to pose pressure on the stock in the coming months.
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Recommendation: We give an “Expensive” recommendation on PRY at the current price of $3.99
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