QBE Insurance Group Ltd

Statutory Loss in 2017 compared to profit in prior year: QBE Insurance Group Ltd.’s (ASX: QBE) stock fell 3.3% on February 26, 2018 after the company reported for a statutory net loss after tax of $1,249 million for 2017, compared to a net profit after tax of $844 million in the prior year. Further, in FY 17, the group’s adjusted combined operating ratio is of 104.1% compared with 93.7% in the 2016. The increase is primarily due to extreme catastrophe experience and a significantly reduced level of positive prior accident year claims development. These factors more than offset an improved combined commission and expense ratio. The company’s North American Operations’ performance was heavily impacted by second half catastrophes including Hurricanes Harvey, Irma and Maria and the Californian wildfires, which resulted in a combined operating ratio of 109.1% up from 98.5% in the prior year. On the other hand, for 2018, QBE targets Combined operating ratio in the range of 95.0% - 97.5% and investment return in the range of 2.5% - 3.0%. Looking at long-term targets and group’s fundamentals, we give a “Buy” recommendation on the stock at the current price of $10.38
 

FY 17 Financial Performance (Source: Company Reports)
 

BlueScope Steel Ltd

$150 million extension of the buy-back and strong 2H 2018 earnings outlook: BlueScope Steel Ltd.’s (ASX: BSL) stock rose 4.69% on February 26, 2018 after the company reported 23% growth in the reported net profit after tax (NPAT) to $441.2 million for 1H 2018 and a $150 million extension of the buy-back. The company has posted strong underlying EBIT of $516.8 million in 1H FY2018 due to the improving economic conditions and the benefit of the recent $32.1 million coal supply dispute settlement. Moreover, BSL expects underlying EBIT to be around 25% higher in the second half of 2018. This is after deducting the one-off benefit of the $32.1M coal settlement from 1H FY2018 underlying EBIT. As a result, BSL stock has risen 11.68% in three months as on February 23, 2018 and looks “Expensive” at the current price of $15.84
 

Reliance Worldwide Corporation Ltd

Raised the FY18 earnings guidance:Reliance Worldwide Corporation Ltd.’s (ASX: RWC) stock rose about 6.7% on February 26, 2018 after the company raised the FY 18 earnings guidance. RWC has raised the EBITDA guidance range for FY18 to between $150 million and $155 million (from $145 million to $150 million projected in August 2017). Moreover, RWC in 1H 2018 has reported 28.3% increase in the net sales to $362.6 million and up 31.3% on a constant currency basis. This is due to the strong double-digit growth in core SharkBite Push?To?Connect fittings and accessories and first full period inclusion of Holdrite. The EBITDA in 1H 2018 grew 24.5% to $79.3 million and up 26.8% on a constant currency basis. Meanwhile RWC stock is trading at a high P/E and looks “Expensive” at the current price of $4.42
 

Amaysim Australia Ltd

Profits fell in 1H 2018: Amaysim Australia Ltd.’s (ASX: AYS) stock fell 2.66% on February 26, 2018 after the company reported a 27.6% fall in the underlying NPATA to $7.5 million due to the increased amortisation of software and interest costs associated with the acquisition of Click, partially offset by a reduced tax expense for 1H 2018. However, in 1H 2018, AYS has reported 115.1% growth in the statutory net revenue to $294.0 million led by strong subscriber growth across the Group and the addition and acquisition of new verticals. Meanwhile, AYS stock has fallen 21.79% in three months as on February 23, 2018. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $1.465
 

Monash IVF Group Ltd

NPAT is expected to be approximately 25% lower in FY18: Monash IVF Group Ltd.’s (ASX: MVF) stock fell 6.5% after the company highlighted to witness FY18 NPAT to be approximately 25% lower than prior corresponding period (pcp). This is due to operational performance, the impact of a high-volume doctor departure and investments to build a stronger foundation for sustainable growth. Further, in 1H 2018, the group revenues declined by 2.2% to $77.0m compared to pcp. As a result, MVF stock has fallen 15.48% in three months as on February 23, 2018 and is trading at a low level. Looking at the volatility, we give a “Hold” recommendation on the stock at the current price of $1.225
 

1H 18 Financial Performance (Source: Company Reports)
 

Spark Infrastructure Group

Reaffirmed distribution guidance for FY18: Spark Infrastructure Group (ASX: SKI) has reported 4.5% growth in the FY 17 EBITDA of $791.5m. Moreover, SKI has reaffirmed the distribution guidance for FY18, subject to business conditions, of 16.0 cps, which represents annual growth of 4.9% on FY2017. Additionally, SKI expects significant opportunities in new energy landscape, due to the improved regulatory certainty and efficient transition to higher use of renewables. Meanwhile, SKI stock has fallen 6.61% in three months as on February 23, 2018 and is a “Buy” at the current price of $2.44
 

Ardent Leisure Group

Loss reduced in 1H 2018: Ardent Leisure Group’s (ASX: AAD) stock rose 2.92% on February 26, 2018 after the company reported 1H 2018 net loss after tax of $15.6 million compared with a net loss of $49.4 million in the prior corresponding period. This loss is after a $22.8 million impairment charge relating to Dreamworld. However, the revenue fell 12.1% on a pro-forma basis and this is predominantly due to the disposal of the Health Clubs and d’Albora Marinas businesses. Based on the financial recovery, we give a “Hold” recommendation at the current price of $1.94
 

1H 18 Financial Performance (Source: Company Reports)

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