Virtus Health Ltd


VRT Details

·       Director resignation hurt the stock sentiment: Virtus Health Ltd (ASX: VRT) stock continued to fall over 5.9% on November 11, 2016 as the director resigned from the group. Mr Dennis O’Neill reported his resignation as the Director of the Company, and this move disappointed the market. VRT stock has been under pressure this month which fell over 12.4% (as of November 10, 2016) owing to the softness in first quarter of FY17 wherein the group reported that the IVF cycle activity in Australia is being impacted by short term local economic influences and accordingly the first quarter has seen a decline in fresh cycle activity which lost 3.5% as compared to the prior corresponding period. Virtus fresh cycle activity in the quarter has fallen 5.9% on a like for like basis. This indicates loss of market share in Victoria on the back of rising competition and new entrants. On the other hand, Sims Clinic cycle in Ireland rose 5.8% from prior year comparative quarter. Moreover, the group’s Singapore activity is witnessing 30 cycles per month and the unaudited first quarter EBITDA for Singapore was positive for the operation after two years of losses.

·       Recommendation: We give a “Hold” recommendation on the stock at the current price of $6.10
 
Newcrest Mining Ltd


NCM Details

·       Higher levels: Newcrest Mining Ltd (ASX: NCM) stock fell over 7.3% on November 11, 2016 due to gold price movement. The group is enhancing their production from their current operations. The pre-feasibility study is expanding throughput to 32 million tonnes per year at Cadia. NCM forecasts 13 million tonnes per annum by the end of December 2016. On the other hand, the current volatility in gold prices may impact the stock in the coming period. Moreover, NCM generated over 85% of returns during this year to date (as of November 10, 2016), placing the stock at higher P/E.

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

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