Washington H. Soul Pattinson and Co. Ltd

SOL Details
·         Strong first half: Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) stock rallied over 4.06% on March 23, 2017 driven by their first half of 2017 performance. The group’s net profit after tax (NPAT) enhanced 56.1% year on year (yoy) to $149.0 million for the six months ended at January 2017. Regular profit after tax surged 66.7% yoy to $139.3 million during the period. This increase was driven by better regular contributions from six of WHSP’s seven major strategic investments. New Hope Corporation made a solid contribution driven by better coal prices and its acquisition of an interest in Bengalla.  TPG Telecom Ltd.’s divisions performed well. Brickworks Ltd delivered a solid sales revenue from its building products business and a better contribution from its land and developments divisions. The group also gave a positive outlook and expects the ongoing solid performance in the second half. The group is focusing on the financial services and have made investments in Pengana Capital, Hunter Hall Global Value and Hunter Hall International in the last six months.
 
·         Recommendation: SOL stock rallied over 11.4% in the last three months (as of March 22, 2017) placing the stock at higher levels. We give an “Expensive” recommendation on the stock at the current price of – $ 17.41

 
First Half of 2017 Performance (Source: Company Reports) 

JB Hi-Fi Ltd

JBH Details
·         Strong online performance: JB Hi-Fi Ltd (ASX: JBH) stock recovered over 3.4% on March 23, 2017 at the back of improving sentiments after correcting over 14.3% in the last four weeks (as at March 22, 2017). The group had a challenging start in the financial year for The Good Guys, but the performance improved throughout the year especially into the second half. On the other side, the group’s underlying NPAT enhanced 31.7% yoy to $125.4 million during the first half of 2017. As per the Australian performance, overall sales surged 11.7% yoy to $2.23 billion, with comparable sales up 8.7%. Hardware and Services sales enhanced 15.8%, with comparable sales up 12.6% during the first half of 2017 boosted by the Communications, Audio, Cameras, Accessories, Computers and Home Appliance categories. The group’s online sales delivered an outstanding performance which rose 40.4% on the pcp to $84.8 million or 3.8% of total sales indicating ongoing improvements across their digital assets.
 
·         Recommendation: JBH already corrected over 15.8% in the last three months (as of March 22, 2017) given their lower than expected The Good Guys performance. We give a “Hold” recommendation on the stock at the current price of – $ 24.23

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