Challenger Ltd

CGF Details
·         Weakness in sentiments: Challenger Ltd (ASX: CGF) stock lost over 3.1% on May 17, 2017 with some weakening sentiments. The overall group assets and funds under management reached $66.6 billion as at 31 March 2017, which is up 3% for the quarter. Funds Management delivered positive net flows in Fidante Partners as well as Challenger Investment Partners reaching $1.0 billion for the quarter. FUM rose $2.1 billion during the quarter to $64.3 billion, driven by solid net flows ($1.0 billion) and positive investment markets ($1.1 billion).Overall Life sales for the quarter reached $1,258 million, which include annuity sales of $880 million and Other Life sales of $378 million. Annuity sales surged 53% against the prior corresponding period (pcp), driven by lifetime annuities increase of 68%.

·         Recommendation: CGF already generated over 40.9% in the last one year (as of May 16, 2017) and is trading at higher levels. We give an “Expensive” recommendation on the stock at the current price of $ 12.65

NIB Holdings Limited

NHF Details
·         Concerns over margins: NIB Holdings Limited (ASX: NHF), the private health insurer, witnessed a stock price fall of over 8.7% on May 17, 2017 at the back of concerns on the declining net margins in the sector (based on latest data by Australian Prudential Regulation Authority).The weak market conditions coupled with normalization of claims experience could also be a concern to the group’s performance going forward.

·         Recommendation: NHF stock rallied over 39.9% in the last one year (as of May 16, 2017) and is trading at slightly higher levels. We give an “Expensive” recommendation on the stock at the current price of $ 5.54
 

Claims trends (Source: Company reports) 

Galaxy Resources Ltd

GXY Details
·         Security consolidation: Galaxy Resources Ltd (ASX: GXY) witnessed a stock price drop of 7.1% on May 17, 2017 while the group announced for commencement of a drilling campaign and pit optimisation review aimed at supporting an updated Life of Mine (“LOM”) plan at Mt Cattlin along with a security consolidation announcement (every 5 pre-consolidated securities to be consolidated into 1). There seem to be some sort of shorting of shares owing to the latter announcement. In another related announcement, the group expressed that shareholders are also considering grant of options to Directors at the Annual General Meeting on May 18, 2017 (exercise price if approved will be $0.556). On the other hand, the group stated that a total of 32,100m of development, grade control and exploration drilling is planned at Mt Cattlin. Further, staged drilling is expected to expand Mt Cattlin Recoverable Resource (from 12Mt to 15Mt) and Reserve withresults expected Q3, 2017 onwards.The campaign will also include 3,700m of drilling on surrounding exploration leases, subject to statutory approvals. The drilling is scheduled to commence before the end of May.

·         Recommendation: There may be a short-term pressure; but given the prospects, we maintain a “Buy” recommendation at the current price of $ 0.46

Pilbara Minerals Ltd

PLS Details
·         Boosting capital position: Pilbara Minerals Ltd (ASX: PLS) stock lost about 6% on May 17, 2017. The group launched a senior secured bond issue in international capital markets to raise between USD 80 and 100 million. PLS intends to use these net proceeds of the bond issue together with existing cash and other equity proceeds towards funding of development and construction activities at the Pilgangoora Lithium – Tantalum Project.

·         Recommendation: PLS stock is available at reasonable levels and we give a “Buy” recommendation on the stock at the current price of $ 0.39

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