Estia Health Ltd
EHE Details
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Lower than estimated performance: Estia Health Ltd (ASX: EHE) stock crashed over 16.7% on August 29, 2016 as the group came out with lower than estimated results. Even though the group delivered a revenue growth of 50% to $446.5m in fiscal year of 2016, the underlying earnings before interest, taxation, depreciation and amortization (EBITDA), rose 31% to $92.7 million, which is 2.4% below the guidance provided. Moreover, the group’s underlying NPAT and EPS also failed to meet guidance which were 7.5% and 5.7% below the estimates, respectively, on the back of further depreciation due to positive independent revaluations of purchased homes at the year-end; and more than expected finance costs. EHE stock already fell over 15.17% in the last three months (as at August 26, 2016) but still trading at a higher P/E.
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Recommendation: We give an “Expensive” recommendation on the stock at the current price of $4.10
Evolution Mining Ltd
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EVN Details
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Capital raising efforts: Evolution Mining Ltd (ASX: EVN) stock fell over 10.7% on August 29, 2016 on the back of falling gold prices. On the other side, EVN is seeking to boost its capital position and finished capital raising of over A$401 million to support the acquisition of an economic interest in the world class Ernest Henry operation. The company has successfully completed institutional component (A$311 million) of the underwritten 2-for-15 accelerated, renounceable entitlement offer.
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Recommendation: We reiterate our “Expensive” recommendation on this low dividend yield stock at the current price of $2.17
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