Nufarm Limited
NUFDetails
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Better than estimated performance boosted the stock: Nufarm Limited(ASX: NUF) stock surged over 4.6% on September 21, 2016 as the group reported a better than estimated performance. The group reported a revenue growth of 2% to $2,791 million for fiscal year of 2016 while delivered an underlying EBIT growth of 21% to $287 million during the period. The group’s performance improvement program generated an overall benefit of $60m in the year and the group reported cost savings even for FY17. On the other hand, even though the group reported a better than estimated NPAT, it fell by 36.3% year on year (yoy) to $28 million in FY16 as compared to $43 million in the prior corresponding period. Moreover, the devaluation of BRL also impacted the group’s performance and even offset the strengthening USD, Euro and GBP. This currency fluctuation could also impact the group’s performance in the coming months. Meanwhile, NUF stock already rallied over 10% in the last three months placing the stock at slightly higher levels as compared to its peers.
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Recommendation: Accordingly, we give an “Expensive” recommendation on the stock at the current price of $8.71
Fiscal year of 2016 performance (Source: Company Reports)
Senetas Corporation Limited
SENDetails
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Solid balance sheet:Senetas Corporation Limited(ASX: SEN) stock traded flat at the end of the session post recovering over 2.8% on September 21, 2016 while a total rally of 4.8% in the last five days alone was noted (as on September 20, 2016). SEN shares fell over 18.5% in the last one month as the group reported a slower than estimated US Federal Government business sale for the coming three to four years on the back of their transition to Ethernet network from SONET. Accordingly, the group’s maintenance revenue is also expected to moderate in FY17 due to rising cost of SONET maintenance contracts roll off during the period. On the other hand, the group was able to report a Net Profit Before Tax growth of 17% yoy to $7 million even though they incurred a huge rise in R&D spending. Operating revenue surged over 19% driven by sales as well as maintenance revenue. SEN reported that their new product development projects are on track while 100Gbps encryptors is currently undergoing certification. Senetas has a solid balance sheet and enhanced its net assets by 41% yoy to $18.5 million during fiscal year of 2016.
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Recommendation: We recommend a “Speculative Buy” on the stock at the current price of $0.105
Senetas performance (Source: Company Reports)
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