Northern Star Resources Ltd

NST Details
Concerns over rising costs:Northern Star Resources Ltd (ASX: NST) reported a 61% rise in net profit for H1FY17 to $104.6 million despite 2% fall in revenues to $415 million. The company has reported 21% rise in EBITDA to $218.8 million while EBITDA margin were high at 53% from 24% in prior corresponding period (pcp). EPS was at 17.4 cents and the company declared an interim dividend of 3 cents per share. The company has reported 43% return on equity and 38% return on invested capital. The cash and cash equivalent were at $303 million with no debt on balance sheet. The company has generated free cash flow of $56 million at an average gold price of $1,683/oz. But Northern Star reported for $61 million being invested under exploration and expansionary CAPEX to grow production in the coming years.

FY17 Guidance (Source: Company Reports)
 
In H1FY17, NST sold 226,608oz at an AISC of $1,076/oz (US$807/oz). The management said the company has generated significant profit growth and maintained some of the highest financial returns on the ASX while investing heavily on expansion strategy. Going ahead, the company has guided total gold production of 485,000-515,000oz at AISC of $1,000 - $1,050/oz (US$750-$788/oz). The stock has moved up 10.51% in last one month as at February 22, 2017. Given the volatile commodity price environment and currency movement, we feel the stock is “Expensive” at the current market price of $ 4.35


NST Daily Chart (Source: Thomson Reuters) 

NIB Holdings Ltd

NHF Details
Robust profit growth:NIB Holdings Ltd (ASX: NHF) reported robust 65% net profit growth for H1FY17 to $71.1 million and statutory EPS of 16.4 cents. The company has reported group revenues of $995 million while arhi premium revenue was at $829.8 million, up 6.2% accounting for 83.4% of total group revenue. The net investment income was up 112.3% to $13.8 million. Underlying operating profit (UOP) grew 43.4% to $95.2 million. Adjacent businesses continued to grow contribution to group earnings; international health insurance (iihi) UOP grew to $13.3 million (up 146.3%), nib NZ improved UOP to $10.9 million up 39.7%, World Nomads Group UOP was of the order of $3.1 million. The company has reported a strong Return on Equity above the insurance average. The group declared an interim dividend of 8.5 cents for FY17. During H1FY17, the group has expanded Whitecoat digital platform reach to 250,000 providers and almost 350,000 patient reviews. The company has entered into agreements with Bupa and HBF to join platform. On the other hand, given this robust performance, NHF stock surged over 50.57% in the last one year (as of February 22, 2017) placing the stock at higher levels. The stock is “Expensive” at the current market price of $ 5.35
 

NHF Daily Chart (Source: Thomson Reuters)

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