BlueScope Steel Ltd

BSL Details
·         Sale of shares in Taharoa export iron sands business: BlueScope Steel Ltd (ASX: BSL) stock fell over 2.7% on April 03, 2017 after the company announced that it has reached an agreement to sell 100% of the shares in its Taharoa export iron sands business to Taharoa Mining Investments Limited (TMIL), which is a majority owned subsidiary of Taharoa C Block Incorporation. Taharoa C is a Maori Incorporation with a wide shareholder base that owns the land at Taharoa. Moreover, the sale of the Taharoa export iron sands business would simplify the company’s portfolio and is consistent with the implementation of its strategy to focus on growing premium branded steel businesses, to deliver competitive commodity steel supply in local markets and maintaining a strong balance sheet. For this, BSL will make a cash contribution of over NZ$51m and TMIL would assume all liabilities associated with the business including NZ$76.5m in finance lease liabilities. Additionally, BSL expects a reduction in net debt of NZ$25.5m at completion.

·         Recommendation: BSL stock rose over 54.60% in the last six months (as of March 31, 2017), and is “Expensive” at the current price of – $ 11.93

Healthscope Ltd

HSO Details
·         Management Changes: Healthscope Ltd (ASX: HSO) stock fell over 3.9% on April 03, 2017 after the company announced that Robert Cooke will step down after more than six years as Managing Director and Chief Executive Officer on May 14, 2017. He will remain available to assist the company with a smooth transition to new leadership until April 2018. HSO further stated about the appointment of Gordon Ballantyne as Managing Director and Chief Executive Officer of HSO, effective May 15, 2017. Under Robert’s leadership, HSO has significantly expanded its operating margin and more than doubled its earnings before interest, tax, depreciation and amortization (EBITDA) from $201 million in FY11 to $408 million in FY16. Accordingly, the new management changes seem to have triggered some concerns. 

·         Recommendation: HSO stock fell 26.77% in the last six months (as of March 31, 2017) and we give a “Buy” recommendation on the stock at the current price of – $ 2.18

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