Metcash Limited
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MTS Details
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Tightening competition: The shares of Metcash Limited (ASX: MTS) plunged over 5.9% on June 01, 2016 even though there is no specific update from the group. However, MTS stock have been bullish since the last few months and rallied over 15.8% in the last four weeks (as of May 31 2016) and surged over 22.8% in the last three months. There do prevail some concerns over tightening competition from peers like ALDI. Moreover, Lazard Asset Management Pacific have decreased their voting power on the group to 6.50% as compared to its earlier voting power of 7.66%. On the other hand, we believe that today’s fall in the stock is a temporary momentum and there is more rally in the stock which investors could leverage. The group would be releasing Preliminary 2016 Metcash Ltd Earnings on July 2016, and this outcome would decide the further direction in the stock.
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Recommendation: We maintain our “Hold” recommendation at the current price of $1.93
CSR Limited
CSR Details
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Aluminum segment and Property division performance a drag: The shares of CSR Limited (ASX: CSR) fell over 5.3% on June 01, 2016 even though there is no specific update from the group. However, CSR stock generated over 23.8% returns in the last three months (as of May 31, 2016) driven by their strong fiscal year of 2016 performance. The group’s trading revenue surged by 14% to $2.3 billion on a yoy basis while the EBITDA enhanced by 15% to $360.0 million against prior corresponding period. However, despite a solid Building Products segment performance, the group’s Aluminum segment performance has been flat while Property division performance was under pressure.
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Recommendation: We give an “Expensive” recommendation on the stock at the current price of $3.355
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Performance over the years (Source: Company Reports)
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