AHY Details
· Focusing on pipeline of innovations: Asaleo Care Ltd (ASX: AHY) stock surged over 4.75% on January 27, 2017 with some improving sentiments. Otherwise, AHY stock had plunged 3.37% in the last four weeks (as of January 27, 2017) post delivering a weak first half of 2016 performance. AHY reported a 4.3% fall in revenue on the back of weak performance in their major retail categories, and Feminine Care and Baby Care industry. The group’s underlying EBITDA lost over 10% while the underlying NPAT fell over 15% mainly as their Tissue division was impacted by the falling Australian and New Zealand dollar leading to rising pulp costs. On the other hand, the recent movement in the Australian and New Zealand dollar could control the group’s costs to a certain extent. Moreover, the group is focusing on a pipeline of innovation. AHY launched Every Day Pricing (EDP) to major retailers in the Australian Feminine Care and Incontinence Care markets to generate value. The group’s Professional Hygiene, Incontinence Care and Pacific Islands businesses performed during the first half of 2016 against the prior corresponding period. Meanwhile, AHY offers a very lucrative dividend yield.

· Recommendation: We believe the group’s buyback program coupled with improving sentiment might boost the stock momentum. We give a “Hold” recommendation on the stock at the current price of - $ 1.43

 

Strategy to maximize returns (Source: Company reports) 

BlueScope Steel Ltd

BSL Details
· Strengthening commodity prices coupled with better performance lifted the stock sentiment: BlueScope Steel Ltd (ASX: BSL) stock rose over 4.1% on January 27, 2017 with a total rise of over 10.89% in the last five days (as at January 27, 2017). The group expects better unaudited underlying earnings before interest and tax (EBIT) of over $600 million for the six months ended on December 31, 2016 against their earlier $510 million guidance. This better performance is mainly driven by the steel prices and better spreads across the businesses leading to a solid Australian Steel Products and New Zealand and Pacific Steel operations. Moreover, productivity improvements coupled with control in costs also contributed to the performance of Australian Steel Products, North Star BlueScope Steel and New Zealand and Pacific Steel segments.

· Recommendation: BSL stock surged over 47% in the last three months (as of January 27, 2017) and we give a “Hold” recommendation on the stock at the current price of – $ 11.51

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