Two stocks that slipped on ASX - Incitec Pivot Ltd and Iress Ltd

Incitec Pivot Ltd

IPL Details
· Positioning to withstand in the bottom of cycle in the markets: Incitec Pivot Ltd (ASX: IPL) stock fell over 4.5% on October 18, 2016 impacted by some negative sentiments floating in the market. The stock already fell over 26.9% during this year to date (as of October 17, 2016) while there has been an oversupply in the ammonia and phosphate markets. On the other hand, the group finished the construction of its ammonia plant in Waggaman, Louisiana during the third quarter of 2016 and the same was completed on track within the original budget of US$850 million. Moreover, fertilizers prices have been recovering and major industry players have been making efforts to control the oversupply in the market. The group’s production from Moranbah, Phosphate Hill, Cheyenne and St. Helens is on track. IPL is also positioning themselves even in the subdued prices by enhancing their efficiency. The group’s efficiency program is forecasted to generate over $100 million of cash savings in 2017.

· Recommendation: We give a “Hold” recommendation on this dividend yield stock at the current price of $ 2.91

Iress Ltd

IRE Details
· Boosting capital position for Financial Synergy acquisition: Iress Ltd (ASX: IRE) stock fell over 2.4% on October 18, 2016. Last month, the group made an agreement of acquiring Financial Synergy to launch over $85 million placement of IRESS shares to institutional investors and made a share purchase plan for the current eligible shareholders in Australia and New Zealand. Eligible shareholders could subscribe up to $15,000 of IRESS shares under SPP without having any brokerage or other transaction costs. On the other hand, the rising competition in the group’s target industry could pose pressure on its stock which is already trading at a relatively higher P/E.

· Recommendation: We give an “Expensive” recommendation at the current price of $ 11.78

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