Northern Star Resources Ltd
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NST Details
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Enhanced Resource & Reserves: Northern Star Resources Ltd (ASX: NST) stock rose 7% on July 28, 2016 at the back of the gold price rally to a two-week high level. The company also reported the resource & reserve update as on 30 June, 2016. NST witnessed 33% increase in reserves to two million ounces at a cost of A$50/oz which is equal to about 10% of current market acquisition prices. Moreover, NST’s resources increased by 350,000oz to 9.25Moz with the four recent discoveries yet to be included in the estimate. Meanwhile, NST stock has already risen 45.82% in the last six months (as on July 27, 2016). The company has a low dividend yield and is trading at a higher P/E.
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Recommendation: Based on the foregoing, we still believe that the stock is “Expensive” at the current price of $5.04
Newcrest Mining Limited
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NCM Details
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Weak Gold and Copper Production in June Quarter: Newcrest Mining Limited (ASX: NCM) stock rose 4.88% on July 28, 2016 driven by the rising gold prices. On the other side, NCM Gold production decreased 6.0% to 598koz for the June 2016 quarter but increased 0.7% to 2.4moz for FY16. However, the copper production decreased 7.4% to 21kt for the June quarter and for the FY 16 it has decreased 14.2% to 83kt. The decrease in the quarter was due to the extended suspension of production at Gosowong following the previously announced geotechnical event in February 2016 and lower grade ore processed at Cadia. The group’s all-in sustaining cost per ounce increased 8.9% to $787/oz for the June quarter but decreased 2.3% to $762/oz for the year.
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Recommendation: We maintain our “Hold” recommendation on the stock at the current price of $24.74
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Production Highlights for June Quarter & FY 16 (Source: Company Reports)
Bellamy's Australia Ltd
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BAL Details
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Recovering investor’s sentiments on the stock: Bellamy's Australia Ltd (ASX: BAL) stock rose 5.2% on July 28, 2016 due to recovering investors’ hopes on infant formula maker’s performance in China. Accordingly, BAL is positioning itself to leverage huge china opportunity, despite the country’s recent regulations on infant formula makers. BAL is now producing in Fonterra which would increase the volume substantially by first quarter FY 17. Moreover, BAL has been boosting its management team with recent appointments of Andrew Cohen and Katherine Henry. Accordingly, the group is expanding its distribution via retailers and online platforms.
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Recommendation: We give a “Speculative Buy” recommendation on the stock at the current price of $11.93
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