Two stocks that dipped - BlueScope Steel and News Corp

• Solid FY16 performance coupled with decent outlook: BlueScope Steel Limited (ASX: BSL) stock fell over 3.5% on September 16, 2016 due to metal price movement. On the other hand, BSL stock rose over 19.33% (as of September 16, 2016) in the last three months driven by their solid FY16 performance. Going forward, BSL expects underlying EBIT to rise 50% in the first half of 2017 as compared to 2H FY2016. Moreover, first half of 2017 underlying net finance costs are forecasted to be lower than second half of FY2016 on the back of declining average borrowings, while underlying tax rate is expected to be slightly higher. We believe management gave a decent outlook despite being aware that the global steel industry is still in oversupply. Moreover, the stock is still trading at a reasonable P/E.
• Recommendation:We maintain our “Hold” recommendation on the stock at the current price of $7.53

• Acquisition related updates:News Corp(ASX: NWS) stock fell over 1.9% on September 16, 2016 which may be owing to some profit booking in the stock. The Australian Competition and Consumer Commission has given a nod for Seven West Media’s proposed acquisition of The Sunday Times and perthnow.com.au from NWS. NWS has also been in the news about the group’s acquisition of regional newspapers of APN News Media. NWS stock have already rallied over 16.68% (as of September 16, 2016) in the last three months driven by this speculation. But we believe the stock is already placed at higher levels.
• Recommendation: We give an “Expensive” recommendation on the stock at the current price of $18.82

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