mid-cap

What happened to SIMS Metal, S32, Greencross and BlueScope steel?

May 10, 2016 | Team Kalkine

Read Time :5 MINS

What happened to SIMS Metal, S32, Greencross and BlueScope steel?

SIMS Metal Management Ltd

SGM Details

Steep fall: SIMS Metal Management Ltd (ASX: SGM) plunged over 10% on May 10, 2016. SGM was even removed from S&P/ASX 100 index as per S&P Dow Jones Indices’ March quarter review. Market estimates the fall partly driven by the Chinese steel prices’ reversal. The stock otherwise rallied over 32.6% in the last three months (as of May 09, 2016).
Recommendation: We remain bullish on the stock which is expected to gain some support from its buyback initiatives. We maintain our “Buy” recommendation on the stock at the current price of $8.45

South32 Ltd

S32 Details

Cost saving initiatives: South32 Ltd (ASX: S32) lost over 5.3% on May 10, 2016. Recently, the group delivered over US$182 million of controllable cost savings in first half of 2016 and reported to be on track to achieve US$300 million in FY16. S32 is also restructuring Worsley Alumina, South Africa Manganese while the Australia Manganese mining operations are largely finished.
Recommendation: We maintain our “Buy” recommendation on the stock at the current price of $1.56

Greencross Limited

GXL Details

Quadrant Private Equity sold their stake in GXL: Greencross Limited (ASX: GXL) plunged 6.7% on May 10, 2016 on an update that the Quadrant Private Equity sold its stake in the pet care group. However, the group is a leading player in ANZ Pet Market. GXL intends to build a portfolio of more than 350 stores and more than 350 vet clinics, and is targeting to be a leading player in the online business. The group’s addressable market in ANZ is forecasted to be over A$9 billion and is rising at ~3% per year supported by demographic and social trends.
Recommendation: We maintain our “Hold” recommendation on the stock at the current price of $7.09

BlueScope Steel Limited

BSL Details

North Star BlueScope steel plant incident: BlueScope Steel Limited (ASX: BSL) stock lost over 6.9% on May 10, 2016 as its North Star BlueScope steel plant had a refractory failure which washed out the molten steel from the South EAF shell, leading to an explosion and fire at the plant in Delta, Ohio in the United States. BSL expects lost production of about 35,000 tonnes, for a total pre-tax implication of $US5 million. Operational implications are still being assessed by the company.
Recommendation: We maintain our “Hold” recommendation on the stock at the current price of $5.90

Disclaimer
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376).The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd currently hold positions in: BHP, BKY, KCN, PDN, and RIO. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.
Copyright
Copyright © 2016 Kalkine Pty Ltd ABN 34 154 808 312. No part of this website, or its content, may be reproduced in any form without the prior consent of Kalkine Pty Ltd.
Kalkine is a trading name of Kalkine Pty Ltd ABN 34 154 808 312, which holds Australian Financial Services Licence No. 425376.