S&P 500 was up by 0.04 points to 1845.16. The S&P 500 Index climbing above its record close during the day as purchases of new homes unexpectedly climbed to the highest level in more than five years. Sales of new U.S. single-family homes surged to a 5-1/2-year high in January, possibly easing concerns of a sharp slowdown in the housing market. Three rounds of stimulus have helped push the S&P 500 (SPX) up 173 percent from a 12-year low in 2009.U.S. shares have rallied in recent weeks, recouping most of their losses from a tumultuous January trading sparked by an emerging-market selloff. The S&P 500 also advanced into record territory on Monday and Tuesday, but both times failed to close above its all-time closing high of 1848.38, reached on Jan. 15. Since last year's record-setting rally brought many stock valuation metrics above their long-term average levels.


S&P Daily Chart (Thomson Reuters)

S&P ASX 200 was down 3.2points or 0.06% and closed at 5437.0 points. Dexus property group announced holding interest of CBA representing 5.74% of the share capital of the company. Rio Tinto fixed dividend record date as Aug. 15 for 2014 interim dividend. Ex-dividend date Aug. 13, Payment Sep. 11. Ramsay Health Care is to pay fully-franked interim dividend of 34 cents. Payment date March 26. The Gina Rinehart-backed Roy Hill iron ore project in Western Australia remains on track to commence mining in the second half of 2015 as it nears a multi-billion loan agreement with a consortium of banks. Engineering group WorleyParsons signaled it was considering a restructure as it reported a 27 per cent fall in first-half net profit to $119.8 million and cut more than 500 jobs. Whitehaven Coal posted an interim net loss after tax of $11.6 million on Wednesday, a 76 per cent improvement from a loss of $48.6 million in the first half of last financial year.


ASX 200 Daily Chart (Source – Thomson Reuters)

The top gainers on ASX 200 were:-

Code	Name	Price	Change	%   Change
PDN	PALADIN ENERGY LTD	$0.54	$0.10	21.35%
WOR	WORLEYPARSONS LIMITED	$17.13	$1.64	10.59%
ASL	AUSDRILL LIMITED	$1.07	$0.09	9.23%
TSE	TRANSFIELD SERVICES LIMITED	$0.97	$0.07	7.22%
CAB	CABCHARGE AUSTRALIA LIMITED	$4.49	$0.22	5.15%

 Stock of the Day – Computershare (CPU)
CPU was established in 1978 to provide computer bureau services to Australian share registrars. CPU listed on the ASX in 1994 and has established a global registry organization, operating in more than 20 countries including US, UK, Canada, Germany, Australia, New Zealand, Hong Kong and South Africa. CPU provides transfer agency and share registration services, employee equity plans, proxy solicitation and stakeholder communication. Diversification into corporate trust services and bankruptcy administration is a positive.

Flexing its competitive advantages and diversity Computershare increased first half fiscal 2014 net profit after tax by 9.6% in a far from ideal environment. Transactional income from corporate activity and initial public offerings or IPO’s remains subdued, reported revenue from outside the United States were hurt by a stronger US dollar.


Source – Computershare

Computershare continues to benefit from a superior and scalable technology platform, reputation for efficiency and ability to provide cross border share registry products and services. The competitive strengths have underpinned market share gains in key global markets which in turn build on economies of scale and switching cost benefits. Management appears to be gaining confidence that the operating environment may be improving with guidance increased to earnings per share growth of 5% to 10% up from previous guidance of 5%.

After eight years as CEO Stuart Crosby advised he will step down from 30 June 2014 being internally replaced by current global Chief Information Officer Stuart Irving. An employee of Computershare for 15 years he has held various roles in different regions in which time he has overseen the integration of a number of acquisitions.


CPU Daily Chart

While Computershare benefits from switching costs its competitive advantages in technology, efficiency and accuracy must be sustained through ongoing investment. This is represented by Computershare spending USD 117.8 million in technology costs. Interest income fell 12% to USD 105.8 million during the half. The decline was largely driven by less activity amongst clients including takeovers, buybacks, initial public offering proceeds and capital raisings. While much of Computershare’s revenues will ebb and flow with market activity, crucial to long term value in the stock is client retention which appears sturdy. We believe Computershare continues to benefit from a superior and scalable technology platform, reputation for efficiency and ability to provide cross border share registry products and services. We like the Computershare story but find the stock expensive at current price and would review it at a later date.

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Kalkine provides general advice on securities. Kalkine does not provide advice that takes into account your, or anybody else’s investment objectives, financial situation or needs. We strongly suggest that 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. Employees and/or associates of Kalkine Pty Ltd may hold one or more of the stocks reviewed on this website. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd currently hold positions in:  BHP, BKY, KCN, PDN, and RIO. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.
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