In today’s daily we have covered stock research on
Ansell (Expensive).
To view
dividend calendar click here
To listen to our latest
podcast on QBE click here.
To view our recent recommendation on
G8 Education Click Here
To view our recent recommendation on
Iluka Resources Click Here
S&P 500 was up 9.55 points or 0.49% on Wednesday and closed at 1959.53. U.S. stock indexes rose on Wednesday after a Supreme Court decision boosted the shares of major broadcasters and as drug makers stocks rallied. Some of the stocks that rallied were
Monsanto (5.1%) after raising its full year forecast for ongoing earnings,
CBS Corp. (6.2%) after the U.S. Supreme Court ruling with regard to Aereo Inc’s broadcasting methods. Economic data showed that the U.S economy shrank 2.9% in the first quarter.
Oil prices remain at elevated levels not seen since last September as concern about the ongoing violence in Iraq and potential disruption in supply continues to be felt in commodities markets.
Copper prices fell in New York trading, halting the longest string of gains for the red metal since 2010. Copper for September delivery decline 0.2% to $3.139 a pound on the Comex in New York.

S&P 500 Daily Chart (Source – Thomson Reuters)
S&P ASX 200was down by 30.8points or 0.57%on Wednesday and closed at 5402.0 points.
AGL Energy has welcomed the decision of Australian Competition Tribunal which effectively overturns the decision of ACCC to oppose AGL’s acquisition of the assets of
Macquarie Generation (MacGen).
NAB has become a substantial shareholder of
JB Hi-Fi with a voting power of 5.23%.
Arena Investment Management has sold 10 childcare centres for an aggregate price of $14.2 million reflecting a 47% premium above the current book value of $9.68 million.
Flexigroup announced the issue of AUD255m asset backed securities supported by a pool of Australian unsecured retail no interest ever payment plans.
NewSat (NWT) has announced a new teleport customer contract with an Asian telecommunications company worth US$13.6 million over three years.
Devine Group has announced that
Leighton group is looking to sell its 50% stake in the company.
Collins Food has announced an increase in revenue of 3.9% for reporting period till 27April 2014 and decline in net profit of 14.3%.

ASX 200 Daily Chart (Source – Thomson Reuters)
The
top gainers on ASX 200 were:-
Stock of the Day – Ansell (ANN)
Despite a frustratingly slow economic recovery and a weak first half result we believe Ansell is on track to deliver a FY14 result within its guidance range thanks to materially weaker input costs and stable selling prices. As the acquisitions are bedded down we expect earnings growth to lift as management turns its focus to lifting organic growth especially via new product launches.

Purchasing Manager's Index (Source – Company Reports)
Ansell has delivered only 1% organic growth per annum in the 18 months to December 2013 well below its historic average. Given the groups higher fixed costs we see good earnings upside if management’s increased focus on boosting sales from new product launches begins to bear fruit. Key downside risks primarily stem from protracted slowdown in sales from industrial division due to weakening of world industrial production and pressure on market share from more aggressive competitors.

Ansell Growth Trends (Source – Company Reports)
The double digits declines in key raw material costs compared with previous corresponding period should have provided a material boost to Ansell’s margins from the second half of FY14. However this benefit will likely have been offset by higher costs as spending has normalized compared with the previous corresponding period when a very aggressive cost cutting program was implemented.

ANN Daily Chart (Source – Thomson Reuters)
As the recent spate of acquisitions are bedded down we expect management to increase its focus on lifting organic growth. Raw materials account for 25% of Ansell’s costs with Natural Rubber Latex and nitrile latex the two key commodities, together accounting for nearly 15% of group costs by our estimates. While it is more difficult to track spot prices of other key inputs, industry feedback suggests most commodity prices have been soft. Cotton has risen but represents only a small part of the group’s raw material costs. We believe the stock is expensive at its current price and would review the stock at a later date.
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.