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Mid-Cap

Three stocks up on ASX – ResMed, Bega Cheese and Austal Limited

July 31, 2016 | Team Kalkine
Three stocks up on ASX – ResMed, Bega Cheese and Austal Limited

ResMed Inc


RMD Details
  • Positive fourth quarter results: ResMed Inc. (ASX: RMD) stock surged over 6.85% on July 29, 2016 driven by the group’s fourth quarter results. RMD reported a revenue growth of 14% to $518.6 million in June quarter of 2016, against the same period of the prior year. The group delivered an organic growth of 8% year on year (yoy) to $489.7 million during the period apart from Brightree acquisition. The group reported a double-digit growth for fiscal year of 2016 on the back of solid performance in masks and devices, coupled with the first quarter of software-as-a-service revenue from Brightree. RMD has over 2 million patients who use their cloud-connected devices on bedside tables. On the other hand, RMD had already delivered over 14% in the last three months (as of July 28, 2016).
  • Recommendation: We believe that the stock is “Expensive” at the current price of $8.61
 
Bega Cheese Ltd


BGA Details
  • Providing cheese for Woolworths private cheese brand: Bega Cheese Ltd (ASX: BGA) stock surged over 6.9% on July 29, 2016 due to its contract with Woolworths. The group made an agreement with Woolworths Supermarkets for offering a major component of Woolworths’ own label cheese range starting from January 2017. On the other hand, we believe the pressure in the stock would continue despite this rally. The group reported a reduction in its farm gate milk price across all supply regions of over 11% which equates to a Victoria farm gate milk price of $5.00 Kg milk solids. Moreover, the group reported that it would maintain the 2015/16 farm gate price of $5.60 Kg milk solids even though the major competitors Murray Goulburn and Fonterra have cut the prices to dairy farmers during later part of the financial year. Moreover, the stock is trading at a very high P/E and has a low dividend yield.
  • Recommendation: We maintain our “Expensive” recommendation on the stock at the current price of $6.20
 
Austal Limited


ASB Details
  • Strong pipeline: Austal Limited (ASX: ASB) stock surged over 5.94% on July 29, 2016 with substantial holding initiated by Retail Employees Superannuation Pty Ltd. The group finished Full Ship Shock Trials by USS Jackson (LCS 6) on July 16, 2016. The Navy reported that USS Jackson (LCS 6) delivered solid performance during its third and final underwater explosion as part of Full Ship Shock Trials (FSST). Management reported that this is a major milestone for the LCS program and Independence variant warship. Moreover, the stock is trading at a very reasonable P/E with a solid dividend yield.
  • Recommendation: We give a “Hold” recommendation on the stock at the current price of $1.16


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The information given by Kalkine Pty Ltd ABN34 154 808 312 (Australian Financial Services License Number 425376) on this website is general information or advice only.

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