Surge in Seven West Media, CIMIC Group, Lend Lease and ANZ Bank
May 04, 2016 | Team Kalkine
Seven West Media Ltd
SWM Details
Boosting capital position: Seven West Media Ltd (ASX: SWM) rallied over 5.1% on May 03, 2016. Meanwhile, Newzulu raised over $5 million via placement which was oversubscribed as they got funds from Seven West Media and cornerstone Thorney. SWM has been making strategic investments to offset the pressure from its core free to air television market. Accordingly, the shares of SWM rallied over 6.90% in just last five days alone. SWM also has an outstanding dividend yield.
Recommendation: We believe that the shares of SWM would be able to recover further in the coming months and accordingly we give a “Hold” recommendation on the stock at the current price of $1.16
Cimic Group Ltd
CIM Details
Ongoing Contract wins: Cimic Group Ltd (ASX: CIM) have been winning contracts and recently was chosen by GoldLinQ to design and construct Stage 2 of the Gold Coast light rail project. This contract would deliver revenues of over $200 million, while construction was forecasted to start by April 2016 and finish by late 2017. On the other side, the group formed Ventia an independent services company in 2015 via the integration of Leighton Contractors Services, Thiess Services and Visionstream while CIMIC and Affiliates of Apollo Global Management have investment partnership in Ventia equally. Visionstream, the Communications division of Ventia got a contract with Telstra to provide maintenance and building services for greater than 40,000 exchange and network assets across Australia. This is a five year Network Integrity and Facilities Management (NIFM) contract and forecasted to generate over $350 million of revenue. Meanwhile, the Group also got an Alliance contract with the Level Crossing Removal Authority (LXRA) to design and construct the Level Crossing Removal Project: Caulfield to Dandenong in Melbourne. This project is forecasted to deliver a revenue of over $500 million for CPB Contractors, while construction is planned to start by mid?2016.
Recommendation: CIM rallied over 4.5% on May 03, 2016 and is trading at a higher P/E. We give an “Expensive” recommendation on the stock at the current price of $37.90
Lendlease Group
LLC Details
Attractive valuations: Lendlease Group (ASX: LLC) surged over 4.9% on May 03, 2016 on reports of the group seeking to offer a U.S. dollar-denominated senior bond offering, based on a mandate announcement from The Wall Street Journal. LLC has a stable Baa3 ratings from Moody's Investors Service while both Standard & Poor's and Fitch Ratings have BBB- ratings. The group is hiring Barclays, DBS Bank, HSBC and J.P. Morgan as joint book runners for the bond sale, as per the document.
Recommendation: We give a “Hold” recommendation on this dividend yield stock at the current price of $13.10
Operating EBITDA (Source: Company Reports)
Australia and New Zealand Banking Group
ANZ Details
Improvement in lending and customer deposits: Australia and New Zealand Banking Group (ASX: ANZ) shares rose over 5.56% on May 03, 2016 due to better than expected first half year of 2016 results by the group. ANZ reported a lending growth by 8% during the period while customer deposits improved by 12% on a yoy basis. But, the group’s unaudited cash profit fell by 11% to NZ$751 million and unaudited statutory profit dropped by 13% yoy to NZ$763 million. Excluding the software capitalization change, the group’s operating expenses fell only 1% as the group’s cost management and productivity gains were paying off.
Recommendation: We have been bullish on ANZ and reiterate our “BUY” on this dividend yield stock at the current price of $24.87
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