News Corp
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NWS Details
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Mixed third quarter performance: News Corp (ASX: NWS) surged over 7.6% on May 09, 2016 as the group delivered a better than estimated third quarter of 2016 results. NWS incurred a $280 million pre-tax charge at News America Marketing to solve a legacy lawsuit and related claims. This coupled with currency fluctuations hurt the group’s revenues by $72 million and EBITDA by $9 million. Therefore, NWS reported revenues of $1.9 billion during the third quarter against $2.0 billion of prior corresponding period (pcp). Overall Segment EBITDA reached $158 million without the $280 million charge. On the other hand, the group’s Realtor.com delivered a solid traffic with 50 million average monthly unique users this quarter, rising by 30% as compared to pcp.
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Recommendation: Despite the short term rally, we believe that the tough advertising market conditions coupled with currency fluctuations would continue to hurt the stock in the coming months. Accordingly, we give an “Expensive” recommendation on this stock at the current price of $17.75
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Third quarter performance (Source: Company Reports)
Whitehaven Coal Ltd
WHC Details
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Strong production: Whitehaven Coal Ltd (ASX: WHC) rallied over 6.8% on May 09, 2016. The company recently reported a solid ROM coal production of 5.7Mt for the March quarter of 2016 which is a rise of 21% on a yoy basis as compared to pcp while saleable coal production rose by 28% yoy to 5.3Mt during the period. The group’s Maules Creek is estimated to ramp up stage to 10.5Mtpa by January 2017 and progressing well to meet FY2016 guidance for saleable coal in the range of 19.5Mt to 20.1Mt. The group estimates its costs guidance at $57/t for full year of 2016.
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Recommendation: We maintain our “Speculative Buy” on the stock at the current price of $0.705
Strong production (Source: Company Reports)
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