In today’s daily we have covered stock research on Qube Holdings. To view 3 Media Stocks with 6%+ Dividends click here

S&P 500 was up by 0.80 points or 0.04% to 1897.45 on Tuesday. U.S. stocks ended flat on Tuesday as the benchmark S&P 500 retreated after climbing over the 1,900 mark, while an index of European shares ended at a six-year high on solid corporate earnings and bets of more European Central Bank stimulus. Keurig Green Mountain Inc. added 7.6 percent afterCoca-Cola Co. boosted its stake in the company. 

Unexpected weakness in U.S. retail sales boosted U.S. Treasury prices. The S&P 500 reached an intraday level of 1,902.17 before retreating from that level as the tepid U.S. retail sales data dampened hopes of a surge in economic growth in the second quarter. But the slight advance for equities helped the benchmark index set a record closing high for the tenth time this year. Sentiment in European equities was boosted by comments from two Bundesbank sources that the German central bank was prepared to support European Central Bank policy action, if needed, to shore up the region's economy. That hit the euro, which extended losses against the dollar.
 

S&P 500 Daily Chart   (Source – Thomson Reuters)
 
S&P ASX 200was up by 49.8 points or 0.91% on Tuesday and closed at 5498.2 points. Nickel recorded its biggest rise in one day in the almost 2 years. The short term rise is more sign of a short supply in a tight market. Canada’s Baytex Energy Corp has raised its offer for Aurora Oil & Gas by 2.4% to $1.88 billion to win over key shareholders.

Construction industry had some kind of relief with government’s $11.6 billion spend on infrastructure as this would compensate for the decline in work from the resources sector. Incitec Pivot came up with a better than expected result by posting a net profit for the six months to March of $115.7 million up 7% on the previous corresponding period.


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

The top gainers on ASX 200 were:- 




Stock of the Day – Qube holdings  (QUB)
 
Qube operates three distinct but related divisions: logistics, ports and bulk, and strategic assets. Logistics, which contributes about 40% of group earnings, undertakes road/rail transportation of containers to and from port, operation of container parks, customs/quarantine services, warehousing, intermodal terminals and international freight forwarding. Ports and bulk which contributes about 55% of earnings, undertakes domestic stevedoring. Strategic assets which contribute 5% of earnings, comprise tactical land holdings in Sydney.

We have reviewed the prospects for the private sector to play a role in developing an intermodal terminal at the Moorebank in Sydney. We conclude that private sector participation is likely, following statements from the government organization managing the project, the Moorebank Intermodal Company or MIC. Qube holdings is a logical participant given its land asset at Moorebank and dominant market share position for intermodal container movements at Port Botany.


Source - Qube

A large scale intermodal terminal would enhance relative proposition of rail, relative to road, for container movements to and from the port. This could provide Qube logistics division with a sustainable competitive advantage. Qube’s strategy to create a substantial integrated ports and logistics group with national scale is progressing well. The Quattro grain joint venture highlights the opportunity for organic growth, with low gearing and supportive capital markets providing the capacity to fund such an expansion.


Qube Daily Chart  (Source - Thomson Reuters)
 
Qube will continue to undertake consolidation and rationalization the domestic transportation industry focusing particularly on volumes moving to and from port. We expect the joint venture between Qube and Aurizon, known as the Sydney Intermodal Terminal alliance or SIMTA to materially participate in the development of an intermodal terminal precinct at Moorebank. We believe the stock is overvalued at its current price and would review the stock at a later date.
 

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