Ten Network Holdings Limited

TEN Details
Weak free-to-air television market remains a concern: Ten Network Holdings Limited (ASX: TEN) stock recovered over 6.97% on March 14, 2017 and rose 22.86% in last five days (as at March 13, 2017). This has come after falling over 25.4% in the last four weeks. In its latest trading update, the group reported a television revenue rise of 1.9% in the first quarter of the 2017 financial year and forecasts this to rise by over 1.2% for the half year to 28 February 2017. On the other hand, the advertising market in TV is decreasing despite the group’s efforts to invest in prime time content, and market-leading arrangement with Multi Channel Network Pty Ltd. Moreover, the group forecasts television earnings before interest, tax, depreciation and amortisation (“EBITDA”) to be in the range of $10 million to $15 million for the half year as compared to $10.1 million EBITDA profit reported for the prior corresponding period owing to market weakness and increasing content and other costs. Even the full year EBITDA loss is expected to be between $20 million and $30 million. The group is also reviewing the impairment charges which would be undertaken as part of the half-year accounting process. TEN stock corrected over 48.4% in the last six months (as of March 13, 2017) and we believe the stock pressure would continue in the coming months.We believe that the stock is “Expensive” at the current price of – $ 0.69


TEN Daily Chart (Source: Thomson Reuters) 

Ramsay Health Care Limited

RHC Details
Positive industry dynamics: Ramsay Health Care Limited (ASX: RHC) stock has fallen over 4.64% in the last five days (as on March 13, 2017) while it was noted that group CEO, Christopher Rex, sold $27 million of his ~$79 million stake in the group and the CFO sold $7.49 million of his $26 million stake. On the other hand, given the rising ageing population, the group’s potential opportunity continues to expand. The group is also well positioned to invest in capacity expansion. RHC has over £19.8 million worth of developments underway. The group had announced a core Net Profit After Tax (Core NPAT) of $267.8 million for the six months to 31 December 2016, which is indicative of a 12.8% increase on the previous corresponding period. Core NPAT growth led to core EPS of 128.9 cents for the half year, an increase of 13.0% on the 114.1 cents recorded in the previous corresponding period.
 

Growth Strategy (Source: Company Reports)
 
The reported net profit after tax (after adjusting for net non-core items after tax) of $255.9 million has been up 13.8% on the prior half. There has been a 12.8% rise in fully-franked interim dividend of 53.0 cents. While the Australian business had achieved revenue growth of 8.8% and is expected to witness some more stability going forward, RHC is still uncertain about any impact from Brexit with regards to its UK business. On the other hand, RHC has upgraded guidance of core NPAT and core EPS growth to 12% to 14% for full FY 2017 (previously 10% to 12%) in view of strong first half results and the continuation of robust growth across all operations. We give a “Hold” on RHC at the current price of – $ 64.90


RHC Daily Chart (Source: Thomson Reuters) 

Treasury Wine Estates Limited

TWE Details
Strong financial performance: Treasury Wine Estates Limited (ASX: TWE) had reported that its reported Net Profit After Tax (NPAT) and Earnings Per Share (EPS) more than doubled the previous corresponding period (pcp) for first half 2017, while Earnings Before Interest, Tax, SGARA and material items (EBITS) of $226.8m was up 58.8% on a reported currency basis. In fact, all regions have delivered double digit EBITS growth with Australia & New Zealand (ANZ) reporting 13.2% EBITS growth, Europe reporting 34.3% EBITS growth, and Asia and Americas reporting 75.6% and 75.4% EBITS growth, respectively.
 

Growing Market Share (Source: Company Reports)
 
Further, TWE expects 2H17 EBITS to be broadly in line with 1H17 and aims to deliver a high-teens EBITS margin by F18. The stock has moved up 19.5% in last three months (as at March 13, 2017) and is trading at higher levels. We give an “Expensive” recommendation on the stock at the current price of $ 12.21


TWE Daily Chart (Source: Thomson Reuters)

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