Five stocks that outperformed on ASX this year to date

South32 Ltd

S32 Details
Enhancing assets via acquisitions: South32 Ltd (ASX: S32) is acquiring the Metropolitan Colliery and related 16.67% interest in the Port Kembla Coal Terminal (PKCT) from an Australian subsidiary of Peabody Energy Corporation. These acquisitions would enable S32 to optimize their performance and unlock the resource synergies that include the potential development of the CCL724 mining lease containing a 71Mt Coal Resource adjacent to the Metropolitan Colliery. Moreover, the acquisition is fully funded via cash consideration of US$200 million.
 

Upstream production and FY17 guidance (Source: Company Reports)
 
On the other hand, the production at Illawarra Metallurgical Coal operation is affected by a temporary suspension of Appin Area 9 longwall and lower rates of production at the Appin Area 7 longwall. This would lead into a saleable production loss of about 500kt (as anticipated) and would translate directly to sales given low inventory levels. S32 has committed to be on track to achieve the unit cost guidance for most of the upstream operations in FY 17. S32 expects the capital expenditure of US$450 million in FY17. Meanwhile, S32 stock generated an outstanding rise of more than 170% this year to date (as on 13 December 2016) and is trading close to its 52-week high price. We give a “Hold” recommendation on the stock at the current price of – $ 2.84

 
S32 Daily Chart (Source: Thomson Reuters) 

Webjet Limited

WEB Details
Partnership with Dida Travel Technology: Webjet Limited (ASX: WEB) is said to be added in S&P /ASX All Australian 200 Index effective 16 December 2016. The group made a partnership with Dida Travel Technology, the largest travel aggregator in China. This partnership would enable FIT Ruums, the group’s B2B online accommodation distributor, move into multiple Asian markets enabling them to become a one-stop-shop for the region’s travel trade. Moreover, the partnership includes the content sharing of at least 13,000 properties, two-way distribution, and collaboration in the areas like market intelligence, business development and the advancement of new technology. WEB is expecting FY 17 EBITDA of $78 million. WEB stock also rose 71.33% this year to date (as on 13 December 2016), and is currently trading at a higher P/E. We give an “Expensive” recommendation on the stock at the current price of – $ 9.80

 
WEB Daily Chart (Source: Thomson Reuters) 

Altium Limited

ALU Details
Weak operating cash flow in FY 16: Altium Limited (ASX: ALU) had reported a revenue growth of 17% to US$93.6 million in FY16 while 29.3% growth was seen in EBITDA margin. ALU achieved US$100.4 million of sales and is on-track to exceed US$100M revenue in FY17. There is a 20% increase in number of new AD licenses sold and an 11% increase in subscribed seats to 31,134.
 

Financial Strategy (Source: Company Reports)
 
On the other hand, ALU had reported a weak operating cash flow of US$14.1 million in FY 16 against US$20.4 million in FY 15, which is affected by US$10.8 million build in receivables over the year. The tax paid also rose to US$5.4 million up from US$0.7 million last year. ALU stock surged 70% this year to date (as on 13 December 2016) and now trades at a higher P/E. We give an “Expensive” recommendation on the stock at the current price of – $ 7.99

 
ALU Daily Chart (Source: Thomson Reuters) 

Monadelphous Group Limited

 

MND Details
Ongoing performance pressure: Monadelphous Group Limited (ASX: MND) had reported a 26.8% fall in the sales revenue to $1,364.7 million in FY 16 and a 36.7% fall in the NPAT to $67 million as compared to the FY 15. Moreover, MND expects that revenue in the first half of FY 17 will at par with the second half of FY 16. The margin is expected to continue to be in pressure.
 

FY 16 Financial Performance (Source: Company Reports)
 
On the other hand, a consortium of Zenviron (joint venture between MND and Zen Energy) and Vestas has won a $430 million contract for the delivery of the 270MW Sapphire Wind Farm in northern New South Wales. The project is expected to deliver significant benefits to the local communities of Glen Innes and Inverell. Further, the project is also expected to provide up to 200 jobs and to inject at least $10 million into the local economy during the construction phase. MND stock has risen 59.94% this year to date (as on 13 December 2016). However, the group might witness some performance pressure in the coming months, and hence we give an “Expensive” recommendation on the stock at the current price of – $10.98

  
MND Daily Chart (Source: Thomson Reuters) 

ALS Ltd

ALQ Details
Oil and Gas business affected H1 FY17: ALS Ltd (ASX: ALQ) recently completed the acquisition of UK-based food and environmental analytical services company, ALcontrol UK Ltd. ALQ otherwise reported a 5.6% fall in the revenue to $672 million in the first half of FY 17 over 1H FY16 and this was due to the 45% fall in revenue experienced by the Oil and Gas businesses, that suffered from continued reduced activity and pricing pressures in the markets served. Additionally, the Oil and Gas business has posted an underlying loss for the H1 FY17 of $13.3 million, which is significant when compared with the underlying loss of $0.3 million in the corresponding period last year. Meanwhile, stock rose 57.03% this year to date as on 13 December 2016 with some positive market sentiments witnessed earlier. Given the performance headwinds, we maintain an “Expensive” recommendation on the stock at the current price of – $ 6.06 

 
ALQ Daily Chart (Source: Thomson Reuters)

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