Sonic Healthcare Limited
SHL Details
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Met fiscal year of 2016 guidance: Sonic Healthcare Limited (ASX: SHL) stock surged over 6.1% on August 17, 2016 as the group came up with a solid fiscal year of 2016 results. The group met its FY2016 guidance and generated a revenue growth of 20% to A$5.1 billion. Earnings per share rose 27% driven by Europe and the USA. The group’s positive guidance also pleased investors which expects ongoing EBITDA growth in FY2017. Meanwhile, SHL’s integration of acquisitions, Medisupport in Switzerland and KLD in Belgium have been completed this year and SHL expects further synergies in 2017. The group’s UK joint venture, Health Services Laboratories, is positioning for further NHS outsourcing contracts. On the other hand, management reported that they are slowing investments this year. Moreover, with the recent Brexit, the group’s UK outcome might face pressure. Meanwhile, SHL stock already delivered over 23.3% during this year to date (as of August 16, 2016). We recommend investors to leverage the current rise as an exit opportunity in the stock.
· Recommendation: We give an “Expensive” recommendation on the stock at the current price of $23.51
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Fiscal year of 2016 performance (Source: Company Reports)
Fletcher Building Limited
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FBU Details
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Decent FY16 results drove the stock: Fletcher Building Limited (Australia) (ASX: FBU) stock surged over 4.9% on August 17, 2016 as the group generated net earnings of $462 million for the year ended 30 June 2016, against $270 million in prior corresponding year. Net earnings before significant items were 5% more at $ 418 million. Operating earnings (earnings before interest and tax) were $719 million, against $503 million last year. FBU Cash flow from operations performance was pleasing which rose over 15% to $660 million as compared to $575 million in the prior year. This increase was on the back of better operating earnings and decline in working capital. FBU declared a final dividend of 20 cents per share leading to a total dividend for the year to 39.0 cents per share. FBU reported that the favorable results were mainly due to 29% better operating earnings from Fletcher Building’s Australian businesses. On the other hand, FBU stock already rallied over 43.1% in the last six months (as of August 16, 2016).
Recommendation: We feel the stock is “Expensive” at the current price of $9.58
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