Bubs Australia Ltd

BUB Details
· Expanding distribution of Bubs Goat Milk Infant Formula at Coles: Bubs Australia Ltd (ASX: BUB) stock rose over 6.5% on February 14, 2017 as Coles reported that they are enhancing distribution of Bubs Goat Milk Infant Formula by 42% from 322 to 456 stores. This move by Coles would further strengthen the group’s presence of Bubs organic baby food products which is among one of the four strategic priorities for future growth of the business.

· Recommendation: BUB stock fell over 27.9% in the last four weeks (as of February 13, 2017) given the rising competition of infant formula markers. Moreover, the group’s products are already in 95% of Coles stores nationally. We maintain our “Expensive” recommendation on the stock at the current price of – $ 0.16

South32 Ltd

S32 Details
· Commodity prices momentum drove the stock higher: South32 Ltd (ASX: S32) stock surged over 4.3% on February 14, 2017 driven by the commodity price movement. S32 has been on track to achieve production guidance for most of its operations, despite a generally challenging quarter. The group achieved record production at Brazil Alumina in the December 2016 quarter, while enhanced manganese ore production by drawing down Wessels concentrate stockpiles in South Africa and ramping up PC02 ore production at GEMCO to full capacity. The group’s production guidance at Cannington is same and the extraction of a high-grade stope is expected towards the end of FY17 post a major weaker metal production in the December 2016 half year. S32 maintained their sales guidance for Illawarra Metallurgical Coal of 8.1Mt as Appin Area 7 is now at full capacity and remediation work at Appin Area 9 is ongoing. S32 also made an agreement to acquire Peabody’s Metropolitan Colliery and related 16.67% interest in the Port Kembla Coal Terminal for US$200 million.

· Recommendation: S32 stock rose over 30% in the last six months (as of February 13, 2017) and we believe the bullish momentum would continue. We give a “Hold” recommendation on the stock at the current price of – $ 2.67

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