Iluka Resources Limited

ILU Details
 
Iluka Resources Limited (Iluka) has announced that shipping of heavy mineral concentrate (HMC) from the Port of Thevenard (the Port), South Australia, has been suspended. Iluka ships HMC from the Jacinth-Ambrosia mine to its mineral separation plants in Narngulu, Western Australia and Hamilton, Victoria through the Port. Flinders Ports (owner of the Port) has informed Iluka that it has a safety concern surrounding the structural integrity of sections of the jetty that support a conveyor system utilized by the operator of the Port (Viterra) for loading.It is not clear when loading activities at the Port will be resumed, and Iluka is currently investigating alternative avenues of transport for the Jacinth-Ambrosia HMC, through one of the other ports in the region. However, the disruption is unlikely to have an impact on production guidance for 2017 as it has sufficient inventory of zircon (as finished product) for sale.

The stock has moved up 37.5% in the last twelve months, while it was up about 15.5% in the last three months (as on July 10, 2017) driven by robust production and financial performance. Given the current mining progress, we expect further momentum in the stock and give a “Buy” recommendation at the current market price of $9.04


ILU Daily chart; (Source: Thomson Reuters)

JB Hi-Fi Limited

JBH Details
 
For Q3FY17, the group posted a comparable sales growth of 8.2% while reporting total sales growth of 10.8% yoy. The acquired, The Good Guys business, reported a subdued comparable and total sales growth of 1.2% and 2.6%, respectively. Although the sales from the acquired business was not impressive, it is expected to significantly expand JB Hi-Fi’s capability in the attractive home appliances market through store roll-out and continued market share gains. By leveraging on complementing businesses with a wide range of products, brand position, and merchandising capability, JBH expects to generate synergies of $15-$20 million per year after a three-year integration period. Notably, JB Hi-Fi’s lowest cost of doing business (~15.2%) among major Australian listed and international consumer electronics retailers has enabled it to maintain low prices and compete effectively in the market. However, given the increasing competition and challenging environment in the sector, we maintain “Expensive” rating at the current market price of $24.71
 

JBH Daily chart; (Source: Thomson Reuters)

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