Seek Limited
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SEK Details
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Enhanced ownership in Asia and Brazil: The shares of Seek Limited (ASX: SEK) plunged over 5.4% on June 23, 2016 as the group reported a lower than estimated FY17 earnings. The group issued a preliminary FY17 NPAT (before significant items and before deducting early stage growth ventures) forecast of A$215m to A$220m and re-confirmed NPAT (before significant items like profit on IDP sale) of over A$195m for FY16 (before deducting investments in early stage growth ventures of approximately A$20m). Given solid bottom line growth by SEEK, investors were disappointed by this FY17 growth rate against FY16. On the other hand, SEK has enhanced its ownership from 51% to 100% in Brazil Online for over A$104 million. The group also enhanced its stake at SEEK Asia from 80.8% to 86.2% for A$78 million. Accordingly, SEK expects the overall impact of these transactions to be EPS accretive by FY17. On the other hand, we view this as a temporary fall in the stock.
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Recommendation: We maintain our “Hold” recommendation on the stock at the current price of $15.32
Platinum Investment (Asset) Management Ltd
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PTM Details
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Decent dividend yield: Platinum Asset Management Limited (ASX: PTM) stock lost over 5.5% on June 23, 2016 even though there is no specific update from the firm. Investors must have been cautious over the group’s FUM performance this month’s due to ongoing volatile conditions in the markets with major events like Brexit. The stock has been downgraded to underweight from equal weight at Morgan. On the other hand, we view that PTM has been delivering decent performance despite short term hurdles. The group’s Funds under Management improved in the month of May to $24.778 billion after facing pressure in the month of March and April, which delivered $24.738 billion and $ 24.066 billion respectively. PTM also generates a decent dividend yield.
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Recommendation: We maintain our “Buy” stance on the stock at the current price of 6.03
Austal Limited
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ASB Details
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Ongoing contract wins: Austal Limited (ASX: ASB) corrected over 3.6% on June 23, 2016 after rising over 3.3% in the last five days (as of June 22, 2016) driven by the group’s ongoing contract wins. The group got two new contracts for three commercial passenger ferries worth over A$30million. First contract is for building 50 metre high speed passenger catamaran for Seaspovill Co. Ltd, a high speed ferries operator on multiple domestic routes in South Korea. Second is from Supercat Fast Ferry Corporation, Philippines, for building two 30 metre passenger catamaran ferries. Recently, U.S. Navy modified the group’s USA’s Littoral Combat Ship (LCS) contract to allow procurement of a spare “Sea Giraffe” radar for the Independence variant LCS program. This would enhance LCS contract value by US$6,801,290. Meanwhile, ASB is also trading at attractive P/E and has a strong dividend yield.
Recommendation: We give a “Buy” recommendation on the stock at the current price of $1.21
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