The S&P 500 was down by 3.38points or 0.17%on Thursday and closed at 1996.74.  U.S. stocks edged lower on Thursday after the latest spark of tensions between Ukraine and Russian forces, snapping investors' focus back on the volatile region, but the latest batch of U.S. economic data helped curb losses.Williams-Sonoma Inc. tumbled 12 percent after its third-quarter earnings forecast missed analysts’ estimates. Abercrombie & Fitch Co. (ANF) declined 4.8 percent as second-quarter sales fell more than analysts had projected. Guess? Inc. sank 8.8 percent after the retailer cut its annual earnings forecast.

European stocks took a bigger hit reflecting concerns about the region’s much greater exposure to Russia as well as their outperformance over the US earlier this week. Nato’s claim that more than 1,000 Russian troops were operating inside Ukraine denied by Moscow helped shift the market focus away from the prospect of further policy accommodation from the European Central Bank. The CBOE VIX index Wall Street’s so called fear gauge was up 3.3% in late trade.


SPX Daily Chart (Source – Thomson Reuters)


S&P ASX 200was down by 26.8points or 0.47 %on Thursday and closed at 5624.4 points. Qantas lifted 7 per cent to $1.39, despite $2.8 billion annual net loss. Telstra Corporation rose 0.2 per cent to $5.54. Ramsay Health Care gained 1.4 per cent to $52.06 as it revealed a 14 per cent rise in full-year net profit.  Iron ore shed a further 1 per cent on Thursday, dropping to $US87.30 as it edged closer to its lowest price since 2012.

Ramsay Healthcareannounced fully-franked final dividend of 51.0 cents, up 22.9% on previous corresponding period. The dividend record date is Sept. 10 with payment on Sept. 24. Adelaide Brighton announced a revenue for year ending June 2014 of $602.0m up 3.9% on the previous corresponding period. The following stocks will trade ex-dividend today: Aurizon, Carlton Investments, Challenger Ltd, SAI Global, Wesfarmers.



Qantas Daily Chart (Source – Thomson Reuters)

The top gainers on ASX 200 were:- 





Stock of the Day – Sonic Healthcare (SHL)

Sonic Healthcare’s fiscal 2014 result was in line with guidance and was characterized by a strong contribution from the European pathology business. On a constant currency basis, underlying earnings before interest, tax, depreciation and amortization rose 5.4% to AUD 733 million on revenue growth of 4.8%. Net profit after tax rose 6.5% on a constant currency basis or 14.9% to AUD 385 million on a statutory basis benefitting from weaker Australian dollar.



SHL Finacial Highlights (Source – Company Reports)

Management has a well-established consolidation strategy targeting synergistic bolt on acquisitions. A leading market position in Germany and a meaningful presence in the U.S are growing contributors of offshore revenues and provide a strategic platform for growth. Germany was the key contributor with revenues up 12% in constant currency terms. Excluding the Labco acquisition which added to strong second half, organic growth was 5%.


SHL Revenue (A$M) Split  (Source – Company Reports)

The addition of Labco elevates Sonic to market leader in Germany with an estimated 15% share of pathology market. A new central lab facility in Berlin which will incorporate Sonic’s German head office, should support execution of ongoing consolidation in that market and support marketing to potential customers in the health care sector in Germany and Switzerland. This consolidation should also lead to margin improvement. German fee quotas under the national funding structure for statutory insurance, or EBM have improved marginally as of July 2014 which increases earnings certainty at least until June 21015.



SHL Daily Chart (Source – Thomson Reuters)

Notably the U.S pathology division reported volume growth of 2.2% reflecting a number of new contracts in recent months. Plans to build a standalone esoteric testing lab adjacent to the existing facility in Austin Texas in addition to recruiting new management for the U.S business bodes well for new business wins. Performances in the Australian pathology and medical centre businesses were in line with expectations despite weaker volumes attributed to the negative impact of co-payment policy uncertainties. We believe the stock is expensive at its current price and would review the stock at a later date.

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