Whitehaven Coal Ltd
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WHC Details
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Improved margins: Whitehaven Coal Ltd (ASX: WHC) stock plunged over 10.4% on August 19, 2016 on the back volatile commodity prices. On the other hand, the group came up with a decent fiscal year of 2016 performance and reported an EBITDA rise of 72% year on year (yoy) to $ 224.1 million and generated a positive net profit after tax of $ 20.5 million. WHC was able to control its unit cost per tonne by 8% yoy to $56. The group’s Maules Creek enhanced their margins leading to decline in leverage. Accordingly, the group estimates a further free cash flow rise in the next three to four years, while controlling debt.
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Recommendation: We recommend investors to “Hold” the stock at the current price of $1.90
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Solid coal sales rise (Source: Company Reports)
Medibank Private Ltd
MPL Details
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Profit rise but some headwinds: Medibank Private Ltd (ASX: MPL) stock plunged over 4.7% on August 19, 2016 as the group delivered lower than estimated fiscal year of 2016 results. MPL generated NPAT rise of 46.4% yoy to $417.6 million during FY16. The group paid over $5.1 billion on behalf of its customers. On the other hand, the group’s Management expense ratio (MER) has been a concern which fell to 8.4% in FY16 as compared to 8.6% in fiscal year of 2015. Moreover, revenue rise is just 2.5% yoy impacted by the underperformance of the brand due to challenging market. Meanwhile, MPL stock already generated over 29.09% in this year to date (as of August 19, 2016).
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Recommendation: We give an “Expensive” recommendation on the stock at the current price of $2.84
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