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Kalkine Daily 09/07/2015 + Is Seymour Whyte a buy ?

Jul 15, 2015

| Read Time :10 Mins

In today’s daily we have covered stock research on Why it’s time to sell Commonwealth Bank of Australia ? and Is Seymour Whyte a buy ?

The S&P 500 index was down by 34.66 points or 1.67% to 2046.68. The New York Stock Exchange was forced to suspend trading for several hours on Wednesday in the biggest outage to hit a U.S. financial market in nearly two years, unnerving investors already rattled by the meltdown in Chinese stocks and the Greek debt crisis. PepsiCo announced a string of senior appointments ahead of second quarter earnings due on Thursday, as part of an attempt to "preemptively address global trends that are reshaping the food and beverage industry", according to a statement.

Blue Buffalo Pet Products, The maker of premium pet foods sought a valuation north of $3.5bn as it readies for an initial public offering later this year, according to an updated filing with US securities regulators on Wednesday. Equity volatility as measured by the CBOE's Vix indexjumped 21 per cent to 19.66, just shy of the 20 barrier, above which is considered a sign of investor worry. The Vix has climbed 35 per cent in the past month as turmoil in Asian and European markets rattled traders.

VIX INDEX Daily Chart (Source - Thomson Reuters)

S&P ASX 200 was down by 111.90 points or 2.00% on Wednesday and closed at 5469.50 points. The banks and miners led the fall, with ANZ losing 2.3 per cent to $32.27, Commonwealth Bankslipping 2.2 per cent to $85.77, National Australia Bank tumbling 2.6 per cent to $33.33 andWestpac giving up 1.8 per cent to $33.16. As commodity prices plunged - led by iron ore, which dropped below $US50 per tonne - all mining stocks were heavily sold off. BHP tumbled 3.1 per cent to $25.43 and Rio Tinto crumbled 3.2 per cent to $50.06. Fellow blue-chip Telstra also had a poor day, weakening 1.7 per cent to $6.16.

Fortescue crashing 6.1 per cent to a fresh six-year low of $1.67. Even gold stocks performed poorly, with Newcrest shedding 3.8 per cent to $12.59. SPI futures are down31 points. TheAustralian dollar is trading at US74.24¢, recovering from an overnight plunge to US73.89¢. Orewith 62 per cent iron content delivered to Qingdao sank 10 per cent to $US44.59 a tonne on Wednesday. The fall in the oil price hit local energy stocks with Woodside slipping 2.9 per cent to $33.62, Santos falling 3.2 per cent to $7.45 and Oil Search dipping 2.4 per cent to $6.83.

Fortescue Metals Daily Chart (Source - Thomson Reuters)

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Why it’s time to sell Commonwealth Bank of Australia ?

CBA is presently trading at its two-months high suggesting Bulls are back after a short-term fear over the Greece crisis. Banking stocks are now recovering from the correction in April and May, and CBA is no different. Regulatory and economic environment are still benefitting big banks, but this could change. CBA, which is leveraged at three to four times, is taking advantage of low-interest rate and a boom in the real-estate market.

CBA provides banking, life insurance and related services for individuals, small businesses and medium-sized commercial enterprises. CBA made a huge profit of $1 million per hour, overshadowing all rival banks, but shares took a nosedive as earnings were largely stagnant. Unaudited profit for the company came in at $2.2 billion. The bank puts the blame on competitive headwinds affecting its net interest margin. Expense growth was also higher for the reported quarter on the back of increasing regulatory, compliance and remediation costs, such as the compensation plans for the victims of poor financial advice. Click Here To Read The Full Report

CBA Financial Highlights (Source - company Reports)

Is Seymour Whyte a BUY ?

The highlights of the financial summary showed a net profit of $ 3.2 million as the OLD transport infrastructure, as had been forecast, slowed down during the first half of the year. However, the performance of the group was supported by expansion into other states and sectors. New project wins totalled $ 355 million taking the total of the order book up to $ 450 million. The financial position continues to be strong with the continued strong performance from operations and the low level of gearing is combined with a robust cash balance. EBITDA worked out to $ 6.9 million compared to $ 7.7 million in the previous year and NPAT was $ 3.2 million compared to $ 4.9 million. EPS was 3.65 cents per share compared to 6.28 cents per share and cash generated by operations totalled $ 8.8 million compared to $ 11.1 million. The interim dividend was 1.75 cents per share compared to 2.5 cents per share. Cash and cash equivalents were $ 35.5 million compared to $ 40.8 million, NTA worked out to $ 54.7 million and $ 54.3 million respectively and gearing was 7.6% compared to 7.9%. Click Here To Read The Full Report

SWL Revenue (Source: Company Reports)

Level 13 167 Macquarie Street
Sydney NSW 2000 Australia
E-Mail - [email protected]
Phone - 02 8667 3147

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