In today’s daily we provide you with Upcoming Dividends for the big 4 banks. Also we have covered stock research on Sonic Healthcare.

S&P 500 was up by 13.18 points or 0.7% to 1885.52 on Tuesday. U.S. stocks climbed, as consumer and technology shares pushed the Standard & Poor’s 500 Index to an intraday record, as an increase in a manufacturing index boosted optimism the economy withstood severe winter weather.

The signs of economic improvement come as Federal Reserve Chair Janet Yellen yesterday signaled the central bank’s unprecedented monetary stimulus would be needed for “some time” because of “considerable slack” in the labor market. She cited large numbers of partly unemployed workers, stagnant wages, lower labor-force participation and longer periods of joblessness. Factory activity was buoyed by a 7.7 percentage point rebound in the production index after it showed contraction in February. The increase was the largest since June 2009, just as the recession was ending.


S&P 500 Daily Chart   (Source – Thomson Reuters)
 
S&P ASX 200was down 5.6 points or 0.10% and closed at 5389.20 points on Tuesday. Investors have welcomed news BHP Billiton is considering spinning off many of its non-core assets including aluminium, nickel and bauxite in a transaction that could create a new $20 billion resources company that would be handed back to shareholders. Investor participation in the property market hit a seven year high in March with this sector accounting for 40 per cent of new home loans processed by Australia’s largest mortgage broker AFG over the month.

AGL Energyhas countered the competition regulator’s findings over the anti-competitive nature of its $1.5 billion takeover of giant New South Wales power producer Macquarie Generation and argued the acquisition would be of benefit to electricity consumers. Parmalat Australia chief executive Craig Garvin says the French-owned dairy giant will keep hunting for quality acquisitions after its $120 million acquisition of Western Australia’s biggest dairy exporter, Harvey Fresh.


S&P ASX 200 Daily Chart (Source – Thomson Reuters)


The top gainers on ASX 200 were:-
 

Code	Name	Price	Change	%Change
AGI	AINSWORTH GAME TECHNOLOGY	$3.83	$0.19	5.22%
AQA	AQUILA RESOURCES LIMITED	$2.43	$0.09	3.85%
ORA	ORORA LIMITED	$1.42	$0.05	3.27%
AWC	ALUMINA LIMITED	$1.23	$0.04	2.93%
SRX	SIRTEX MEDICAL LIMITED	$15.90	$0.38	2.45%
CPU	COMPUTERSHARE LIMITED.	$12.37	$0.27	2.23%
WSA	WESTERN AREAS LIMITED	$3.39	$0.07	2.11%

 
 
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Stock of the Day – Sonic Healthcare (SHL)

Sonic healthcare is one of the world’s largest diagnostics companies. It is one of the three largest players in pathology laboratory markets in eight countries: the largest player in Australia, UK/Ireland, Second largest in Germany, Belgium and NZ and third largest in the US and Switzerland. Sonic is also the largest operator of medical centers in Australia and second largest player in Australian radiology market.

Sonic Healthcare reported first half fiscal 2014 net profit after tax or NPAT of AUD 177 million up 18% on first half fiscal 2013. This was a strong result boosted by the weaker Australian Dollar. On a constant currency or CC basis NPAT rose 10%. Revenue in CC terms was 4.3% driven higher by solid growth most divisions. Pathology which represents 80% of revenue was up 6% on a CC basis.

Source - SHL

Growth was hamstrung by tightening global government budgets. Dividends increased 8%. Pleasingly full year guidance for earnings before interests, tax depreciation and amortization or EBITDA was maintained at AUD 647 million on a CC basis.




SHL Daily Chart  (Source - Thomson Reuters)

At current prices we believe Sonic is moderately overvalued. Notwithstanding we continue to believe that Sonic benefits from cost advantages derived from its global scale and wide distribution of pathology centers. Sonic’s dominant position in Australian pathology is attractive and we are cognizant of the potential synergies between pathology and the company’s domestic medical Centre division. We like the SHL story but believe that the stock is overvalued at its current price.

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