Stocks’ Details
 

Incitec Pivot Ltd

Bumper earnings and debt containment: Incitec Pivot Ltd (ASX: IPL) delivered $176.0 million of net productivity benefits via the Business Excellence system in FY17, including the Organization Focused Improvement (OFI) program. The group controlled their net leverage to 1.7x as compared to 2.1x in FY16. They also cut their net debt by 7.3% to $1,291.9 million as of FY17. IPL achieved a 17% year on year (yoy) growth in EBIT to $501.2 million against pcp (prior corresponding period) while NPAT enhanced 8% yoy to $318.7 million. Their Earnings per Share (EPS) rose 8% yoy to 18.9 cents in FY17.  
 

EBIT Scenario (Source: Company reports)
 
The group’s Explosives division achieved an earnings growth of 9% with Americas US$ EBIT surging 46% boosted by sustained Quarry & Construction growth and resurgent Coal and Base & Precious Metals activity. Industrial Chemicals’ division earnings surged 83% yoy to $96.5 million, which comprises initial Waggaman earnings. IPL would buy back shares of up to $300 million for the next 12 months. The stock was noted to surge over 4.8% on November 14, 2017 and we believe the bullish momentum in the stock will continue in the coming months. We give a “Hold” on the stock at the current price of $3.92


IPL Daily Chart (Source: Thomson Reuters)
 

Syrah Resources Ltd

First mover advantage: Syrah Resources Ltd.’s (ASX: SYR) core Balama Graphite Project in Mozambique has the potential to be the largest natural graphite mine globally from 2018. The group is the only listed company with a major graphite project currently commissioning, and moving to production.
 

Natural flake graphite opportunity (Source: Company reports)
 
The group has a long-life asset, with over 50 years of mine life and 350kt per year of graphite concentrate production capacity. The group is targeting first quartile cash cost within the first year of production through its mine. SYR has already made sales agreements with traditional and battery market customers for both flake concentrate and Battery Anode Material. Given the developments, SYR stock surged over 52.8% in the last three months (as of November 13, 2017) and was up 4.5% on November 14, 2017, and we give a “Hold” recommendation on the stock at the current price of $4.22


SYR Daily Chart (Source: Thomson Reuters)
 

Praemium Ltd

Strong FUA growth: Praemium Ltd (ASX: PPS) reported that their funds under administration (FUA) across Praemium’s global platforms and funds crossed $7 billion. FUA for the Australian business as of November 13, 2017 reached $4.53 billion and $2.49 billion (£1.45 billion) for the International business. The group added $1 billion in FUA, in less than 6 months, driven by ongoing growth of current clients and a rising pipeline of new clients. PPS stock surged over 53.6% in the last three months (as of November 13, 2017) and there seems to be more growth opportunity given the growing Separately Managed Accounts (SMA) platform. Keeping the high price to earnings scenario in view and potential going forward, we put a “Hold” recommendation on the stock at the current price of $0.65


PPS Daily Chart (Source: Thomson Reuters)
 

Computershare Ltd

Upgraded guidance:Computershare Ltd (ASX: CPU) reported that they have enhanced Management EPS guidance by around 10% for FY18 on FY17, in the constant currency terms. They upgraded their guidance from their earlier forecasts of Management EPS rise of over 7.5% in FY18 in constant currency terms. CPU also reported that their trading performance for the first four months of FY18 is positive driven by Mortgage Services business. The stock rose over 4.9% post the upgrade announcement onNovember 14, 2017 but was earlier impacted owing to sluggish corporate activity. On the other hand, acquisitions and organic growth in mortgage servicing might boost the stock. Given the trading scenario and a mixed view, we put an “Expensive” recommendation at the current price of $15.93, and would review the stock at a later date.


CPU Daily Chart (Source: Thomson Reuters)
 

Elders Ltd

Positive FY17 results: Elders Ltd (ASX: ELD) reported a rise in FY17 statutory net profit after tax of $116.0m, as compared to $64.4m in pcp based on underlying profit and non-cash impairment reversal of the Elders brand name. The group reported an underlying profit after tax of $57.7m, as compared to $16.5 million in FY16. The group’s underlying EBIT enhanced to $70.4 million from $14.3 million against pcp. To have a simplified capital structure, ELD has cancelled all hybrids. ELD delivered a fully franked final dividend of 7.5 cents per share, plus fully franked special dividend of 7.5 cents per share, and basis the performance, ELD stock rose over 15.5% in the last four weeks (as of November 13, 2017) and currently trades around one year high. While the group is setting itself for next phase of growth under the Eight Point Plan, we believe that the stock is “Expensive” at the current price of $5.82


ELD Daily Chart (Source: Thomson Reuters)

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