Stocks’ Details
 

Woodside Petroleum Limited

Raised 2018 production outlook:Woodside Petroleum Limited’s (ASX: WPL) stock fell 0.52% on August 15, 2018 though the company for the first-half 2018 has reported 6% rise in net profit to $541 million, 27% rise in revenue and has raised its 2018 production outlook after strong performances from its Wheatstone and Pluto LNG projects. Moreover, for FY 18, WPL raised the production outlook, and expects FY 18 production between to 87 mmboe to 91 mmboe from an earlier outlook of 85 mmboe to 90 mmboe. The group has also declared a decent interim dividend.
 

Growth Plan (Source: Company Reports)
 
Additionally, WPL expects to reach a preliminary tolling agreement between the North West Shelf Project participants and Browse Joint Venture in the third quarter of 2018. As a result, WPL stock has risen 6.80% in three months as on August 14, 2018  and is trading at a P/E of 23.23x. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $ 36.090.
 

WPL Daily Chart (Source: Thomson Reuters)
 

Zip Co Limited

Partnership with Virgin Australia: Zip Co Ltd.’s (ASX: Z1P) stock rose 2.67% on August 15, 2018 after the company signed the partnership with Virgin Australia for providing Zip interest-free payments for its travel business. On the other hand, for FY 18, Z1P has reported 138% growth in the revenue to $40.4 million with Transaction volume growth of 136% to $542.9 million. The company’s Net bad debts is of 2.61% which is well below industry standards and has achieved cashflow breakeven on a monthly basis in 4Q18. Additionally, for FY 19, Z1P expects to achieve more than $1 billion in annual transaction volume and more than $1 billion consumers with an active Zip account. Meanwhile, Z1P stock has risen 19.11% in three months as on August 14, 2018. Based on the foregoing, we give a “Speculative Buy” recommendation on the stock at the current price of $ 0.960.
 

Z1P Daily Chart (Source: Thomson Reuters)
 

Fairfax Media Limited

Delivered 20% digital revenue growth in FY18:Fairfax Media Limited’s (ASX: FXJ) stock fell 1.69% on August 15, 2018 after the company for FY 18 has reported the net loss of $63.8 million, including the significant items totaling $188.7 million related to impairment charges at Australian Community Media and New Zealand’s Stuff, as well as restructuring and redundancy costs. The company had delivered the net profit of $83.9 million in FY 17. The company had recently announced a plan to merge with Nine Entertainment Co, which led the revenue over the last twelve months fall 2.8 percent to $1.7 billion. Moreover, in FY18, FXJ’s Australian metro media titles posted an increase in paid digital subscriptions over the year to a total of 313,000 subscribers. The Domain Group reported 20% growth in digital revenue, but print revenue declined by 13 percent. FXJ has declared a dividend of 1.8 cents per share, 50 percent franked, with a total dividend of 2.9 cents per share, 68.95 percent franked. Additionally, the revenue is around 5% below last year in the first six weeks of H1 FY19. Meanwhile, FXJ stock has risen 14.84% in three months as on August 14, 2018. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $ 0.875.
 

FXJ Daily Chart (Source: Thomson Reuters)
 

Computershare Limited

Record Profit in FY 18: Computershare Limited’s (ASX: CPU) stock rose 3.46% on August 15, 2018 after the company for FY 18 reported 6.3% growth in the revenue to $2247.7 m and 12.7% growth in EBITDA to $609.7. EBITDA margins expanded by 150 basis points to 27.1% in 2018. Margin income assisted, rose to $175.5m, up 28.9% due to rising interest rates. Moreover, for FY 19, CPU expects management EPS to rise by around +10% on FY18. Meanwhile, CPU stock has risen 3.94% in three months as on August 14, 2018  and is trading at a high P/E of 27.73x. Based on the foregoing, we give an “Expensive” recommendation on the stock at the current price of $ 18.85.
 

CPU Daily Chart (Source: Thomson Reuters)
 

Infigen Energy

Positive strategic moves: Infigen Energy (ASX: IFN) is investing in a 25MW / 52MWh Battery Energy Storage System (BESS) in SA, using Tesla Powerpack technology. Primarily, IFN has inked few funding agreements with the SA Government and the Australian Renewable Energy Agency (ARENA) to co-fund the development worth $38 million. The BESS will be located adjacent to the 278.5MW Lake Bonney Wind Farm. It will be connected to the National Electricity Market through the Mayurra substation owned by ElectraNet. Through this move, IFN will be able to secure an additional 18MW of power depending on the customer load profile. While the stock has been down by about 15% in last one month, it witnessed some recovery with the above news and decent July month production. IFN rose by about 1.7% on August 15, 2018. We have a “Hold” recommendation at the current price of $ 0.590.


IFN Daily Chart (Source: Thomson Reuters)
 

Commonwealth Bank of Australia

Royal Commission strikes again:With Colonial First State coming under scrutiny by the royal commission, Commonwealth Bank of Australia (ASX: CBA) plunged by 2.5% on August 15, 2018. Particularly, CBA has been alleged to be failing to plan with respect to introduction of a mandated low-cost default super fund and reports of breaching superannuation laws associated with the above are doing the rounds. While this has to be watched out, the bank is expected to manage the challenges given its resilient fundamentals.


FY 18 Financial Performance (Source: Company Reports)

On the other hand, its FY18 cash net profit was impacted due to a number of one-off items that include a $700 million non-tax deductible expense for the AUSTRAC civil penalty after the bank admitted to 5 breaches of anti-money laundering and counter-terrorism funding laws. Excluding one-off items, cash NPAT grew 3.7% and the investors were encouraged by the fact that without the one-off expenses, the bank would have reported a $10.01 billion cash profit. Moreover, in 2018, operating income excluding one-off items rose 3.4% to $25,670 million driven by a 4.5% rise in net interest income, with higher funds and insurance income partly offset by a reduction in other banking income. As a result, CBA stock has risen 7.15% in three months as on August 14, 2018  and is trading at a reasonable P/E of 14.20x. Based on the foregoing, we give a “Buy” recommendation on the stock at the current price of $ 73.99.
 

CBA Daily Chart (Source: Thomson Reuters)

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