3 stocks that slumped on ASX - Wesfarmers, Kathmandu Holdings and Syrah Resources

Wesfarmers Ltd

WES Details

·         Softening of market sentiments: Wesfarmers Ltd (ASX: WES) stock fell over 3.12% on June 01, 2017 owing to deteriorating sentiments and post a warning note from Morgan Stanley that Amazon would cost Wesfarmers $400 million in terms of losses by 2026. Particularly, Kmart and Target are considered as the key weaknesses to WES’ current valuation as there will be an impact when Amazon rolls out its first party product and its Prime offer in Australia. Target has been said to be worthless, while Kmart is valued at $3.4 billion. Impact from a sluggish house price growth is also expected to hamper the growth and profitability of Bunnings Warehouse. Interestingly, WES suffered this blow while other local retailers saw some positivity from the latest retail trade data.

·         Recommendation: WES stock rose over 2.9% in the last six months (as of May 31, 2017). We believe that the stock is “Expensive” at the current price of $ 41.37

Kathmandu Holdings Ltd

KMD Details

·         Traded ex-dividend: Kathmandu Holdings Ltd.’s (ASX: KMD) stock fell over 3.6% on June 01, 2017 as the group traded ex-dividend. In the third quarter, KMD reported an 11.9% year on year growth in the total group sales at constant exchange rates (9.3% at actual exchange rates). The same store sales for the period grew up 11.5% at constant exchange rates (9.0% at actual exchange rates). Winter sale in June/July is the company’s largest promotional event of the year and will be key to the full year result.

·         Recommendation: KMD stock rose over 8.9% in the last six months (as of May 31, 2017).We give a “Buy” recommendation at the current price of $ 1.87
 

Financial Performance and Key Ratios (Source: Company Reports) 

Syrah Resources Ltd

SYR Details

·      Balama Project’s Update: Syrah Resources Ltd.’s (ASX: SYR) stock fell over 6.2% on June 01, 2017 owing to some volatility. The Balama Project is almost 80% complete and the commissioning activity has commenced with first production scheduled for August 2017. The Water Pipeline Construction Agreement has been granted and the construction has started. SYR is also advancing with the downstream Battery Anode Material project to capitalize on the available margins and exponential growth in the global battery market.

·         Recommendation: We give a “Buy” recommendation at the current price of $ 2.57

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.