Vocus Group Ltd

VOC Details

·         ACCC finalized its decision on the regulation: Vocus Group Ltd.’s (ASX: VOC) stock fell over 4.7% on May 31, 2017 as the stock is trading on volatility. On the other hand, the Australian Competition and Consumer Commission has finalized its decision on the regulation of high-speed internet services supplied by non-NBN fixed line networks. The ACCC’s decision sets the wholesale prices and other terms and conditions that are expected to provide customers with a larger number of retailers to choose from and deliver them better prices and services. Moreover, in a change from the draft decision, the ACCC has permitted the non-NBN networks to pass on the Government’s proposed Regional Broadband Scheme (RBS) charge on their customer lines to help fund NBN Co’s supply of non-commercial regional fixed wireless and satellite services. However, the very small providers of some high-speed internet services (supplying less than 12,000 customers) will not be regulated under this decision on the basis that it would apply an unreasonable burden to them with little benefit to customers.

·         Recommendation: VOC stock fell over 32.27% in the last three months (as of May 30, 2017) owing to the recent profit warning. We maintain a “Hold” recommendation at the current price of $ 2.82

Cardno Ltd

CDD Details

·         Weak stock momentum:Cardno Ltd.’s (ASX: CDD) stock fell over 6.6% on May 31, 2017 leading to a total of over 11% in the last five days owing to weakness in sentiments. On the other side, CDD has divested or closed a number of off strategy assets in the past six months. The Australian Head Office is closed and merged into operating divisions. Further, the Australian / NZ / PNG organizational structure has been merged into two regions (North and South) to gain scale and revenue efficiencies. Moreover, in the first half of 2017, the group has reported a net profit after tax of $6.5m, up from a loss of ($30.2) million. This result excludes $3.7m of abnormal items. The backlog is down by 10.4% due to clean up of reporting of backlog. The cash flow from operations is down to ($9.9) million which reflects timing of debtor receipts and creditor payments. The group expects challenges to continue to prevail in the Oil & Gas sector.

·         Recommendation: CDD stock rose over 34.9% in the last six months (as of May 30, 2017) and is now at higher levels. We give an “Expensive” recommendation at the current price of $ 1.21
 

1H 17 Financial Performance (Source: Company Reports) 

Orica Ltd

ORI Details

·       Traded ex-dividend:Orica Ltd.’s (ASX: ORI) stock fell slightly low by 0.1% on May 31, 2017 as the group traded ex-dividend. ORI in the first half 2017 has reported 31% growth in the statutory net profit after tax (NPAT) of $195 million. During the first half, there were indications that miners were beginning to return to more normal mine plans, and associated strip ratios. This development combined with the business improvement initiatives partially offset the impacts from the expected headwinds resulting mainly from increases in gas and ammonia prices in Australia and North America. Therefore, the underlying EBIT of $314 million (prior corresponding period: $317 million) reflected the stabilization of earnings after the downward trend that had been apparent over recent years.

·         Recommendation: ORI stock rose over 15.8% in the last six months (as of May 30, 2017) and is trading at a high level. We give an “Expensive” recommendation at the current price of $ 19.68 

1H 17 Financial Performance (Source: Company Reports)

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