Two stocks that fell on ASX - BHP Billiton Limited and Nine Entertainment Co Holdings

BHP Billiton Limited

BHP Details
· Reviewing guidance at Olympic Dam: BHP Billiton Limited (ASX: BHP) stock fell over 0.75% on October 19, 2016 as the group reported mixed quarterly update and would review the guidance of their Olympic Dam after a state-wide power outage in South Australia. On the other hand, the group maintained production and the unit cost guidance for the 2017 financial year, and is making progress on their capital-efficient latent capacity options with the ramp-up of the Spence Recovery Optimization project. BHP is also enhancing capacity at Jimblebar, and delivering first production from the Los Colorados Extension project in 2017 financial year. BHP reported positive drilling results for Petroleum, with the discovery of oil in multiple horizons at the Caicos exploration well in the Gulf of Mexico. The group’s portfolio optimization efforts continue and accordingly the group is selling 50% of their interest in the undeveloped Scarborough area gas fields and finished IndoMet Coal and Navajo Coal divestments. BHP also made an agreement with the New South Wales Government to cease progression of the Caroona Coal project. Investors need to note the management’s bullish stance on oil and gas markets which are expected to grow over the next 12 to 18 months. Iron ore and metallurgical coal prices are recovering better than expected, and the group forecasts the supply to grow more quickly than demand in the near term.

· Recommendation: We maintain our “Buy” recommendation on the stock at the current price of $ 22.47


Production performance in the quarter (Source: Company Reports) 

Nine Entertainment Co Holdings Ltd

NEC Details
· Building a diversified portfolio: Nine Entertainment Co Holdings Ltd (ASX: NEC) stock fell over 5.5% on October 19, 2016 while the group paid final dividends. The slip also seems to be owing to slight sector-wide negative sentiments. On the other hand, the group’s constant efforts of creating a diversified platform could start offsetting the pressure from the FTA advertising market on a long term perspective. NEC launched a leading AVOD service, 9Now which has >1.9 million registered users as of September 2016, while jumped up to 2^nd position across consumption of streamed long form content across all Australian publishers from fourth position earlier. NEC is planning for more premium content for this business across 2017, and expects to see the benefits in future. The group’s SVOD joint venture, Stan, is number one local player in the booming market. NEC 9Life is Australia’s first free-to-air lifestyle channel and currently placed at #1 multi-channel in the all-important women 18-54 demo. The group also has long term broadcast rights (including free digital rights from 2018) for the NRL through to 2022.

· Recommendation: We give a “Hold” recommendation on the stock at the current price of $ 0.86
 

Nine Entertainment portfolio (Source: Company Reports)

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