SKY Network Television Ltd

SKT Details
· Issues raised by New Zealand Commerce Commission regarding merger with Vodafone:SKY Network Television Ltd (ASX: SKT) stock fell over 4.6% on October 31, 2016 due to issues raised by New Zealand Commerce Commission with regard to the proposed Merger of SKY Network Television Limited and Vodafone New Zealand Limited. New Zealand Commerce Commission clearance process reported that both the group have received Letter of Unresolved Issues that need to be clarified regarding the proposed deal for a clearance. The Commerce Commission said that they have huge information to review and even got submissions from multiple third parties. The request for additional comment indicates for the Commission’s thorough review of the transaction.

· Recommendation: We give an “Expensive” recommendation on the stock at the current price of $ 4.33

Western Areas Ltd

WSA Details
· Solid balance sheet: Western Areas Ltd (ASX: WSA) stock lost over 5.4% on October 31, 2016 with commodity price movement. On the other hand, the group has generated positive cash flow even during the falling nickel prices pressure. The group continues to focus on controlling costs while optimizing their business to withstand nickel price volatility. WSA operational efficiency and cost reduction programs is reflected in their lower cash costs of production. The group is also strengthening their capital position by raising over $75 million during the year while deferred $34 million of capital costs from FY16 to FY17. WSA has $76 million in cash with no debt as per their recent reporting period. WSA is confident that their high grade assets and low cost of production would help them to fight nickel prices volatility in short term. They also expect a recovering nickel pricing outlook for medium to long term given the rapidly growing markets for nickel like battery sector. Despite prices volatility for short term, we believe bargain investors could consider investing in the stock.

· Recommendation: We give a “Buy” recommendation at the current price of $ 2.47

 

FY16 Performance (Source: Company Reports)

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