Fairfax Media Limited

FXJ Details

Domain Holdings Australia Limited has started trading separately: Fairfax Media Limited (ASX: FXJ) stock has fallen 31.5% on November 16, 2017 while the company’s online real estate business Domain Holdings Australia Limited made its ASX debut, initially on a deferred settlement basis. FXJ has retained 60% ownership of Domain, and it is expected that Domain will gain traction given the growth prospects. Particularly, Domain digital revenue can grow over 20% in FY18 and strong growth might continue in the medium to long term.

It is important to note that the separation is expected to be implemented on 22^nd November 2017, and through the move, FXJ shareholders will receive one share in Domain for every 10 shares they hold with Fairfax. The ASX debut of Domain followed the recent approval from the Federal Court of Australia on the scheme of arrangement for the separation of Domain Holdings Australia Limited. FXJ is expected to be having its performance pivoting on the core business at the moment and might benefit from holding in Domain; and as a result, we give a “Hold” recommendation at the current price of $ 0.73

 

Key dates (Source: Company Reports) 

Ramsay Health Care Limited

RHC Details

Reaffirmed core EPS growth for FY 18: Ramsay Health Care Limited (ASX: RHC) has reaffirmed core EPS growth of between 8% and 10% for FY 18. On the other hand, RHC has announced that David Thodey AO will join the RHC Board as a non-executive director, to be appointed at the next Board meeting on 28 November 2017.

It is worth noting that RHC, who was prevented from buying more Australian hospitals several years ago owing to issues raised by regulatory authorities, had to look for offshore opportunities and could leverage from buying the biggest hospital in France at a reasonable price. Several shareholders were asking about the overseas move to countries like France and China, which has proven to be somewhat difficult for RHC, while the acquisition has done well and is well managed. Further, the strong growth in the Australian business is expected to continue, while the company expects ongoing challenging environment in Europe in the near term.

In addition, Australia’s Federal Health Minister, Greg Hunt has recently announced a private health insurance (PHI) reform package, which shows the government’s support for the private health system. Meanwhile, RHC stock has fallen 11.21% in last three months as on November 15, 2017 and was up 3.5% on November 16, 2017. We believe RHC can make a high conviction case and give a “Buy” recommendation at the current price of $ 67.12

 

Operating and Earnings Growth Performance (Source: Company Reports)

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