S&P 500 was up by 28.18 points or 1.53 % to 1873.91 on Monday. U.S. stocks rose with the Standard & Poor’s 500 index rebounding to a record from its biggest loss in a month as comments from Russian President Vladimir Putin signalled the Ukraine crisis won’t immediately escalate.
Putin ordered troops involved in a military exercise near the Ukrainian border back to their bases as he sought to ease tensions a day after Russian stocks, bonds and currency were hammered. The longer-term trend of the U.S. equity indexes remains positive.
S&P 500 Daily Chart (Source – Thomson Reuters)
S&P ASX 200 was up 15.9 points or 0.30% and closed at 5400.20 points. The Victorian government wants to sell Melbourne's port for a multi-billion dollar price tag to pay for huge road and rail projects. AGL Energy is expected to seriously consider a legal challenge to the competition watchdog’s ruling preventing it buying NSW power producer Macquarie Generation in a $1.5 billion deal that was expected to boost earnings about 3 per cent next year. Glencore Xstrata, the global commodity trader and metals producer run by billionaire Ivan Glasenberg, said profit advanced 20 per cent last year after copper output increased and costs fell.
S&P ASX 200 Daily Chart (Source – Thomson Reuters)
The top gainers on ASX 200 were:-
Code |
Name |
Price |
Change |
%Change |
BKN |
BRADKEN LIMITED |
$4.30 |
$0.18 |
4.37% |
AAD |
ARDENT LEISURE GROUP |
$2.38 |
$0.08 |
3.48% |
BCI |
BC IRON LIMITED |
$5.05 |
$0.15 |
3.06% |
DMP |
DOMINO'S PIZZA ENTERPRISES |
$21.32 |
$0.60 |
2.90% |
IVC |
INVOCARE LIMITED |
$11.37 |
$0.28 |
2.52% |
Stock of the Day – Fairfax Media (FXJ)
Fairfax media founded in 1841 and with 10,631 employees is one of the largest traditional media businesses in Australia and New Zealand. It publishes 240 regional, rural and community publications, has nine radio licenses in Queensland and South Australia and metro newspapers in Sydney, Melbourne and Canberra. Flagship mastheads include, the second most read metro newspapers: The Sydney Morning Herald, The Age and the national financial journal The Australian Financial Review.
Fairfax remains slow to adopt the new media environments and is being outpaced by changes in digital media landscape as advertisers continue the online migration. We think the introduction of digitized subscription services will fail to stem the revenue loss as audiences seek alternate free news content from sources such as google or the government funded Australian Broadcasting Corporation. For the last decade Fairfax has been struggling to transition from a newspaper print publisher to become a digitized content provider. The internet has stripped away once large revenue streams form print classifieds which have mainly gone to three internet sites, realestate.com.au, carsales.com.au and seek.com.au. Fairfax has been slow to innovate and respond to the growing audience reach form online channels and is now seen as desperately trying to reinvent itself by cutting costs, simplifying the business and moving to a digitized media platform.
Building approvals have jumped to their highest monthly growth in more than a decade, with strong rises for both detached houses and apartments, Total building approvals soared by 6.8 per cent in January, exceeding economists' expectations of a 0.5 per cent increase for the month, and taking the annual rate to 34.6 per cent. The jump came after three-straight months of falls
Source - Fairfax Media
The progression of FXJ’s online real estate business Domain stood out in the 1H results it reported Revenue +29% and EBITDA +50%. Fairfax reported a strong 1H2014 result with net profit after tax from continuing operations up 47.8% to AUD 86.4 million despite revenue continuing to fall down 7.4% to AUD 964.7 million. We take a divergent view from the market and expect returns will continue to weaken as revenue growth from digital division is unable to compensate for the ongoing weakness across the print business.
FXJ Daily Chart (Source - Thomson Reuters)
We associate very high uncertainty with the stock reflecting the inherent operating leverage of this print media company which is reliant on the cyclicality of the advertising expenditure. We expect Fairfax will remain in an extended state of restructure and process simplification as it cuts operating costs to support a declining revenue base. We believe over the long term the profitability of the company will remain on a downward trend as the company continues to evolve to digital medium. We will review this stock at a later date to take stock of any changes.
Disclaimer
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people.
Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376).
The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation.
Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product.
The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide.