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Downturn in Worleyparsons, Woolworths and BHP Billiton

May 04, 2016 | Team Kalkine

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Downturn in Worleyparsons, Woolworths and BHP Billiton

WorleyParsons Limited

WOR Details

Strong contract base: WorleyParsons Limited (ASX: WOR) stock plunged over 14.7% on May 04, 2016 on the back of turbulent commodity prices. On the other hand, WOR has been building its contract base and recently won a five year EPC Brownfields services contract for BP operated assets for Caspian region. WOR also has a solid dividend yield.
Recommendation: We give a “Buy” recommendation on the stock at the current price of $5.86

Woolworths Limited

WOW Details

Downgrade of credit quality: Woolworths Limited’s (ASX: WOW) senior unsecured notes have been downgraded from BBB+ (Outlook Negative) to BBB (Outlook Stable) by Standard & Poor's. As a result, the stock plunged over 7% on May 04, 2016. On the other hand, WOW has been investing to improve its pricing in order to sustain the ongoing tough market conditions and competition.
Recommendation: We believe the stock would recover in the coming months. We maintain our “BUY” recommendation on the stock at the current price of $20.71

BHP Billiton Limited

BHP Details

Charges for Samarco event: BHP Billiton Limited (ASX: BHP) stock plunged over 9.4% May 04, 2016 as Federal Public Prosecution Service reported proceedings against Samarco Mineração S.A (Samarco), Vale and BHP Billiton Brazil for BRL 155 billion (or over US$43 billion at current exchange rates) under social, environmental and economic compensation related to the failure of the Fundão tailings dam at the Samarco iron ore operation in Minas Gerais, Brazil which occurred on November 05, 2015.
Recommendation: This appears to impose a short term pressure, and BHP would recover in the coming months given its solid cost efficiency program, positive exploration results and solid assets base. We reiterate our “BUY” recommendation on the stock at the current price of $18.79

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