Higher levels: Pacific Brands Limited (ASX: PBG) surged over 4.44% on April 27, 2016 and has been bullish since last one year while generating an outstanding returns of 93.6% (as of April 26, 2016). PBG Sales rose by 8.6% on a yoy basis driven by major brands growth for the first half of 2016 while the NPAT surged by 44.4% on a yoy basis on the back of solid operational efficiency across the group. Management also gave a total fiscal year of 2016 EBIT forecast to be over $73 million to $75 million. On the other hand, the heavy rally in the stock placed PBG at higher levels which is trading at an unreasonable P/E.
Recommendation: We believe that the stock is “Expensive” at the current price of $0.94
Operating segment results (Source: Company Reports)
Cleanaway Waste Management Industry: Industrials
CWY Details
Strong performance: The shares of Cleanaway Waste Management Ltd (ASX: CWY) delivered a solid return of 4% on April 27, 2016. The group delivered a decent first half results which led the stock up by 11.9% in the last six months (as of April 26, 2016). CWY underlying revenue rose 8.3% yoy to of $746.8 million while EBITDA surged 12.6% yoy to $137.2 million. The group’s Solids Collections revenues enhanced by 2.4% while Solids Post Collections revenues surged by 86.1% yoy. The group recently undertook restructuring initiatives.
Recommendation: We believe CWY is trading at higher levels with unreasonable P/E and estimate the stock price to be under pressure in the coming months. Accordingly, we give an “Expensive” recommendation on the stock at the current price of $0.78
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