South32 Ltd

S32 Details
·         Improving sentiments: South32 Ltd (ASX: S32) stock surged over 9.24% on March 02, 2017 at the back of improving sentiments based on overall sector-driven movement and positive research notes from few analysts. The group lately announced that its underlying EBITDA increased by US$522M to US$1.1B in H1 FY17 as higher prices for the majority of commodities offset lower volumes, giving rise to an increase in sales revenue of US$240M. Given the free cash flow position (197% improvement in H1 FY17), cost-saving targets and performance prospects, S32 aims to retain balance of flexibility and efficiency. Further, Chinese authorities’ intention to curb production of aluminum and steel is another factor contributing to the boost.

·         Recommendation: The stock has rallied over 91.5% in the last one year (as of March 01, 2017) and we believe the solid momentum in the stock would continue in the coming months. We reiterate our “Hold” recommendation on the stock at the current price of - $ 2.72

Alumina Ltd

AWC Details
·         Expanding Portfolio: Alumina Ltd (ASX: AWC) stock rallied over 9.02% on March 02, 2017 driven by sector driven movement. Although the group reported for a statutory net loss after tax of US$30 million for FY16 against net profit of US$88 million in previous year, AWC is now positive on commodity prices, ongoing efforts on productivity gains and cost control initiatives. The group expanded their initial design capacity of 2.6 million tonnes per annum to more than twice that rate at their Juruti mine in Brazil. The group also intends to further add 0.5 million tonnes per annum in 2017 by incurring a little capital expenditure. Meanwhile, AWC finished the restructuring of the AWAC asset portfolio in 2016 which currently finished the virtually full ramp up of Ma'aden, the closure of Suralco, Point Comfort being fully curtailed, and the Portland smelter restarted being assured early in 2017. This restructuring generated a solid refining portfolio in 2016 with AWAC positioning as one of the leading players in the bauxite market. The group’s strategy for alumina enhanced revenue by de-linking alumina price, leading to a better available profit per tonne of metal to accrue to the upstream. Further, Chinese authorities’ probable move on cutting production of aluminum and steel may support the stock. Recently, the Jamaica government reported that they had no plans to abandon the bauxite levy and would rather go in a profit share regime with mining companies to revamp the bauxite sector.

·         Recommendation: AWC stock rallied over 40.8% in the last six months (as of March 01, 2017). We give a “Hold” recommendation on this dividend yield stock at the current price of - $ 1.99

Slater & Gordon Ltd

SGH Details
·         Prioritising recapitalization plan: Slater & Gordon Ltd (ASX: SGH) stock price recovered over 41% on March 02, 2017 with many other stocks driving high leading to the market rise. The group recently announced about its priority to agree recapitalization plan with lenders by May 2017. SGH is aiming for restoring earnings and cash flow while the delivery of UKPIP is continuing. The group’s domestic operational effectiveness initiatives are also ongoing.

·         Recommendation: SGH crashed over 80.6% in the last six months (as of March 01, 2017) placing them at very cheap levels. Owing to the recent volatility, we give a “Hold” on the stock at the current price of – $ 0.10


Result Overview (Source: Company Reports)

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