3 Stocks Starting With 'W' - WPL, WOW, WES

Woodside Petroleum Ltd

A Look at December 2018 Quarter: Woodside Petroleum Ltd (ASX: WPL) had recently posted the results for the quarter ended December 2018. The top management of the company stated that Wheatstone’s production has exceeded the expectations as well as Pluto achieved 99.7% reliability. The production witnessed the rise of 10% on the YoY basis and a substantial rise of 43% was also encountered in the sales revenue which stood at $1,419 million because of increased prices.


Sales Revenue (Source: Company Reports)

The company is also having a decent position with respect to the margins. The net margin of Woodside Petroleum Limited stood at 24.8% at the end of June 2018 which happens to be higher than the industry median of 10.4% representing that the company is capable of converting its top line number into bottom line as compared to the border industry. The company’s EBITDA margin has also improved on the YoY basis. At the end of June 2018, the company’s EBITDA margin was 71.4% implying the rise of 0.9% on the YoY basis.

What to Expect from WPL Moving Forward: Woodside Petroleum Limited had provided guidance for full-year 2018. It stated that there are expectations that the oil and gas properties depreciation and amortisation would be in the range of $1,420 million-$1,440 million while the net finance costs are expected to be in the range of $175 million-$195 million.

Moreover, the company’s production costs are expected to be between $455 million-$475 million and the trading costs are expected to be between $210 million-$230 million.

Stock Recommendation: On the monthly chart of WPL, Exponential Moving Average or EMA has been applied and default values were used for the purposes. After careful observation, it was noticed that the stock price has crossed the EMA and had trended in the upward direction which signifies bullishness. Therefore, there are expectations that the company might witness upward momentum moving forward. Hence, considering aforesaid facts and decent outlook ahead, we, therefore, maintain our “Buy” recommendation on the stock at the current market price of A$34.320 per share.  
 

Woolworths Group Limited

Sales Rose 3.4% YoY in FY 2018: Woolworths Group Limited (ASX: WOW) had earlier published the results for 52 weeks ended June 24, 2018. The company stated that the customer focus has led to improvement in the satisfaction as well as transaction growth throughout the group. In the 52 weeks ended June 24, 2018, the company posted sales amounting to $56.72 billion which implies the rise of 3.4% on the YoY basis.


FY 2018 Key Financial Highlights (Source: Company Reports)

The company’s EBIT in FY 2018 stood at $2,548 million which implies the rise of 9.5% on the YoY basis even though there has been reinvestment towards the initiatives which would be giving the benefits moving forward.
What to Expect from WOW Moving Forward: In FY2019, as demonstrated in WOW’s FY 2018 results presentation, with respect to the New Zealand Food division, the company stated that they would be carrying out activities which could support online as well as digital growth. In FY 2019, with respect to Big W segment, the company would be focusing on regaining the trust of customers on the price.
Additionally, in the Big W division, the company would be working towards improving the shopping experience of the customers.

Stock Recommendation: On the daily chart of Woolworths Group Limited, Exponential Moving Average or EMA has been applied and default values were used for the purposes. As per the observation, the stock price has crossed the EMA and had moved in the upward direction post the crossover which reflects bullishness. This reflects that the stock might encounter upward momentum moving forward. Based on foregoing and current trading level, we give a “Hold” recommendation on the stock at the current market price of A$29.920 per share (up 0.504% on 6 February 2019).
 

Wesfarmers Limited

Robust Balance Sheet Position: Not so long ago, Wesfarmers Limited (ASX: WES) had issued a release which threw light on the company’s balance sheet position. The company stated that in the half-year ended December 31, 2018, it had taken numerous actions so that its portfolio can be repositioned. These actions include the divestment of Bengalla, demerger of Coles, divestment of interest with respect to Quadrant Energy as well as divestment of KTAS (or Kmart Tyre and Auto).

The company added that after the receipts of proceeds with respect to the transactions mentioned above, Wesfarmers’ balance sheet happens to be in a robust position. At the end of June 30, 2018, the company had net financial debt amounting to $3.6 billion while at the end of December 31, 2018, it had unaudited net debt position amounting to around $0.3 billion. In FY 2018, the company posted revenues amounting to $66,883 million from continuing operations which implies the rise of 3% on the YoY basis.


Revenues (Source: Company Reports)

What to Expect from WES Moving Forward: Wesfarmers Limited had provided information regarding the expectations for half-year results of FY2019. There are expectations that, in H1 FY 2019 results, on the pre-tax basis, the company might witness gain in the range of $670 million-680 million on the disposal of Bengalla. In the same period, on a pre-tax basis, the company is expected to witness a gain of $265 million-$275 million from the disposal of KTAS.
However, in H1 FY2019, on the pre-tax basis, the company might also witness the gain of US$98 million because of interest’s disposal in the Quadrant Energy.
Stock Recommendation: On the daily chart of Wesfarmers, Exponential Moving Average or EMA has been applied and default values were used for the purposes. As per the observation, the stock price has crossed the EMA and had trended upwards after the crossover. This reflects that the company’s stock might witness upward momentum moving forward.
However, the company is expected to announce the results for H1 FY 2019 on February 21, 2019. Thus, we suggest that the market players need to wait for the results and should closely watch the stock at the current market price of A$33.010 per share (up 1.041% on 6 February 2019).  
 

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. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.