IOOF Holdings Limited
.PNG)
IFL Details
· Traded ex-dividend: IOOF Holdings Limited (ASX: IFL) stock fell over 3.8% on September 29, 2016 as the group traded ex-dividend. The shares of IFL have been performing well and rallied over 18% (as of September 28, 2016) in the last three months. The group had Australian Superannuation assets of $2.0 trillion as of 31 March 2016. The group funds comprised 48.5% of investments in equities; with 22.6% in Australian listed equities, 21.3% in international listed equities and 4.6% in unlisted equities. Fixed income and cash investments comprised 33.7% of investments, wherein 21.0% is in fixed income and 12.7% is in cash. Property and infrastructure comprised over 13.8% of investments and 4.0% were invested in other assets, including hedge funds and commodities. The company’s AGM is scheduled on November 24, 2016. Despite recent rally, the stock is still trading at a reasonable P/E and dividend yield.
· Recommendation: We recommend investors to “Hold” the stock at the current price of –$8.72
Programmed Maintenance Services Ltd
.PNG)
PRG Details
· Weak Marine business: Programmed Maintenance Services Limited (ASX: PRG) stock fell over 13.12% on September 29, 2016 as the group reported that their staffing business would not offset the pressure in the marine business. Accordingly, there would be a major net reduction in revenue which would lead to lower earnings in the year to 31 March 2017 as compared to their earlier guidance. PRG estimates its FY17 EBITDA to be over $100m as compared to the earlier forecasts of $120m, excluding one off skilled integration and restructuring costs. Moreover, the group expects a $7m of marine redundancies costs to further downsize the marine business, resulting in a one?off skilled integration and restructuring costs of $17m in FY17 as compared to their estimates of $10m. This weak marine business is mainly due to oil prices volatility and three large LNG projects completion which led to weak revenue for the combined Programmed/Skilled marine business in the last two years. On the other hand, oil prices started recovering as OPEC decided to cut production for the first time in 8 years. With this oil prices recovery, the group’s marine business could recover to a certain extent.
· Recommendation: We give a “Hold” recommendation at the current price of -- $1.65
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