Seven West Media Ltd
SWM Details
Expanding digital portfolio:Seven West Media Ltd (ASX: SWM) has met the FY 16 full year guidance and was able to deliver a profit after tax of $207.3m (excl. significant items) which was down only by 0.9%. Moreover, Olympics is expected to underpin the robust Television market share growth adding a respite to the struggling Television advertising market which is estimated to be flat to down to low single digits year on year. The program sales and 3
rd party productions are expected to deliver greater than 25% growth and the Digital is expected to deliver greater than 150% revenue growth to the group.
Additionally, SWM is expanding its presence in the creation of content in international markets with an investment in a British drama production company, expanding production into New Zealand and is currently progressing with several opportunities in other territories. Meanwhile, SWM stock has fallen 17.99% in the last six months (as of September 02, 2016). The company is having an outstanding dividend yield and is trading at a low P/E. We give a “Hold” recommendation on the stock at the current price of $0.78
SWM Daily Chart (Source: Thomson Reuters)
CSL Ltd
CSL Details
FDA accepts BLA for Hereditary Angioedema Therapy: CSL Ltd (ASX: CSL) has announced that the US Food and Drug Administration (FDA) has accepted for review of CSL Behring’s Biologics License Application (BLA) for its low-volume subcutaneous (SC) C1-Esterase Inhibitor (C1-INH) Human replacement therapy, CSL830, as prophylaxis to prevent Hereditary Angioedema (HAE) attacks.
Moreover, CSL in FY 16 has reported earnings per share decline of 8% in fiscal year of 2016. As a result, the stock fell over 10.9% in the last four weeks (as of September 02, 2016). Still the stock is having a low dividend yield and is trading at higher P/E. Accordingly, we give an “Expensive” recommendation on the stock at the current price of $104.92
CSL Daily Chart (Source: Thomson Reuters)
Qantas Airways Limited
QAN Details
Challenging short term outlook:Qantas Airways Limited (ASX: QAN) reported a 57% growth in the underlying profit before tax to $1.53 billion in FY 16 and nearly doubled earnings per share to 49c, up 24c on FY 15. The Qantas Transformation program has unlocked $1.66 billion in permanent cost and revenue benefits since early 2014, including $557 million in financial year 2016, and is expecting to realize $2.1 billion in benefits by June 2017.
FY 16 Financial Performance (Source: Company Reports)
QAN is planning for capacity growth of 2-3 per cent in the first half of financial year 2017, due to the aircraft utilization. However, the short-term outlook remains subject to variable factors, including oil price movements, foreign exchange movements and global market conditions. Further, domestic business still witnesses softness. Accordingly, QAN stock has fallen over 15.98% in the last six months (as of September 02, 2016) and we give an “Expensive” recommendation on the stock at the current price of $3.28
QAN Daily Chart (Source: Thomson Reuters)
Genworth Mortgage Insurance Australia Ltd
GMA Details
Special dividend in 1H2016: Genworth Mortgage Insurance Australia Ltd (ASX: GMA) has reported statutory net profit after tax (NPAT) of $135.8 million for the first half 2016 and underlying NPAT reached $112.9 million. However, the new business volume, as measured by New Insurance Written (NIW), of $14.0 billion in 1H16, decreased 20.9% against the previous corresponding period (pcp). The GWP fell 33.5% to $189.8 million in 1H16. This reflects a number of factors including reduced high-LVR penetration in the market, a lower LVR mix of business, as well as the full impact of the changes in customers in 1H15. But we believe this is a short term impact and the group is constantly expanding partnerships with retailers to offer better home buyer discounts.
The company has recently highlighted some board changes. GMA had declared a fully franked interim ordinary dividend of 14.0 cents per share and a fully franked special dividend of 12.5 cents per share. The company is having a solid dividend yield and is trading at a cheap P/E. We give a “Hold” recommendation on the stock at the current price of $2.93
GMA Daily Chart (Source: Thomson Reuters)
Rio Tinto Limited
RIO Details
Offloading non-core assets, to further focus on core business:Rio Tinto Limited (ASX: RIO) has focused on cost reduction and achieved 33% of EBITDA margins in 1H 2016, and has generated net cash from operating activities of $3.2 billion and reported underlying earnings of $1.6 billion.
1H 16 Financial Performance (Source: Company Reports)
The group offloaded Mount Pleasant thermal coal assets to MACH Energy Australia Pty Ltd for US$220.7 million plus royalties and raised over US$4.7 billion from divestments since January 2013. With these divestments, the group is able to boost its capital position as well as further focus on its core assets. We give a “Buy” recommendation on the stock at the current price of $48.10
RIO Daily Chart (Source: Thomson Reuters)
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