Two stocks that surged on ASX – Computershare and Whitehaven Coal

Computershare Limited

CPU Details
· Fall in FY16 Management EPS but confident on FY17 performance: Computershare Limited (ASX: CPU) stock rose 2.2% on October 05, 2016 as the management re-emphasized on their performance for FY17. CPU reported a 7.9% fall in the Management earnings per share (EPS) of 55.09 cents in FY 16, which is in line with guidance. In constant currency terms, the Management revenue is up 5.0% at $2,074.7m and the Management EBITDA is up 0.5% to $557.1m. The register maintenance and corporate actions EBITDA is up 2.6% to $277.5m, while the business services’ EBITDA is up 13.9% to $153.6m. On the other hand, the employee share plans EBITDA is $58.9m, which is down 20.8% due to a substantial reduction in the transaction volumes after a period of sustained market volatility. The significant additional headcount from acquisitions, revenue mix changes and investment on product development and innovation, has led to higher costs, which are up 6.8%. In addition, CPU expects their FY17 Management EPS to be slightly up over FY16. Meanwhile, CPU stock has risen 11.4% in the last three months as on October 04, 2016, and is trading at a high P/E level. The company’s AGM is scheduled for November 09, 2016.
· Recommendation: We give an “Expensive” recommendation on the stock at the current price of – $10.70
 

FY16 Financial Performance (Source: Company Reports)

Whitehaven Coal Ltd

WHC Details
· More upside expected: Whitehaven Coal Ltd (ASX: WHC) stock rose 0.8% on October 05, 2016. The recovery in the commodity prices coupled with solid FY16 performance drove the stock by 116.4% in the last three months (as of October 05, 2016). In FY 16, WHC has reported a net profit after tax of $20.5 million, which is a strong turnaround from the FY 15 loss of $342.7 million after significant items. The sales revenue grew 53% to $1,164.4 million. Additionally, WHC has reduced the net debt by $76.7 million to $859.1 million while the gearing is down to 23%. Subsequently, the senior debt further reduced by $35 million in FY 16. In addition, WHC has reported record ROM production and coal sales of 15.8Mt and 15.5Mt, which are 29% and 43% higher, respectively, than FY 15.
· Recommendation: We maintain a “Hold” recommendation on the stock at the current price of – $2.55
 

FY16 Financial Performance (Source: Company Reports)

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