Select Harvests Limited
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SHV Details
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Volatility in almond prices:Select Harvests Limited (ASX: SHV) stock fell over 4.7% on June 15, 2016 even though there is no specific update from the group. On the other hand, unfavorable weather conditions in NSW and other parts in Australia have been hurting the sentiment on the stock. Moreover, the almond prices’ fluctuation seems to impact the group’s financial performance.
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Recommendation: We give an “Expensive” recommendation on the stock at the current price of $6.62
Virgin Australia Holdings Ltd
VAH Details
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Capital structure highlights: Virgin Australia Holdings Ltd (ASX:VAH) stock plunged over 11.8% on June 15, 2016 due to the group’s heavy impairment charges even though they are making efforts to boost their capital position. VAH proposed a fully underwritten A$852 million equity raising, via pro-rata entitlement offer at a price of A$0.21 per share. The group reported that Singapore Airlines, HNA Innovation, Virgin Group, Nanshan Group and Air New Zealand have binding commitments to undertake the group’s pro-rata entitlements. This offer coupled with earlier offer would deliver gross proceeds of A$1,011 million which would boost its balance sheet. Consequently, Virgin would enhance its net free cash flow savings to A$300 million per annum (annualized run rate) by the end of the 2019 financial year. On the other hand, the group expects A$150 million – A$200 million non-cash balance sheet impairments and incurring cash restructuring costs of A$200 million – A$250 million over the period to 30 June 2019. Moreover, the rising oil prices would increase the group’s costs adding further pressure to its performance.
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Recommendation: We give an “Expensive” recommendation on the stock at the current price of $0.26
VAH Quarterly operating statistics (Source: Company Reports)
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