Marcus Today End Of Day Report
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- ASX 200 rises 68 points to break 5900 closes at 5909.
- High 5913 Low 5863. Strong volume.
- Results focus and look good. Super Thursday.
- Banks push higher but resources the stars. BHP and RIO shine.
- CBA under a cloud.
- Metal prices climb higher in Asia. Copper at a 10-week high.
- TLS calm and solid.
- Barnaby takes leave.
- Jobs numbers in line but F/T P/T volatile.
- AUD stronger on jobs data at 79.30c
- Bitcoin rallies hard to US$9,660.
- AUD Bullion around $1,354. Producers rejoice.
- US futures continue rally up +97 points.
- Asian markets boom though China closed for New Year. Nikkei up 1.12%, Hang Seng up +1.97%.
FUTURES AND HIGHS AND LOWS
- MARCUS CALL – The reaction to the US CPI number defies logic. The market is clearly getting its confidence back. The US market is up 6.55% in three days. We are hedging our bets by sliding some money back into big quality stocks we can sell again if it all goes wrong.
- TRADING PORTFOLIO - Four new trades. Three stop losses raised.
- SMALL STOCK PORTFOLIO – Henry talks commodity outlook assumptions and what it means for our small stocks.
- INSIDERS – ‘Neddy’ says Gold Mile Resources is a buy. Many thanks for the tip.
- INSIDERS CONNECT WITH US - We invite you to send us your own stock ideas. We also have the facility for you to email us any questions. Click on the "Ask Marcus Today" button in the newsletter or below - Ask us anything:
Advancers and Decliners
- MLX +9.52% copper price rises.
- BHP +4.56% strong commodity price rises.
- BLD +1.49% market warms to results.
- WHC +5.91% strong commodity price rises. Results tomorrow.
- CDD +2.50% director appointment.
- DMP -7.53% broker downgrades takes slice out.
- IPH -19.92% profit miss.
- FBU -1.81% negative broker comments.
- TCL -1.55% bond proxy stocks under-pressure.
- BIG +19.58% confidence returns.
- GBT +5.19% broker upgrades.
- ARV +11.76% high grade gold results.
- KDR +4.97% GXY +4.49% lithium back.
- LIC +4.38% positive reaction to results yesterday.
- AWC +4.04% FMG +5.69% resource rally.
- Speculative stock of the day: Service Stream (SSM) +26.09% Positive results out after hours yesterday. EBITDA up 10.4%. Buy back announced and 3c dividend.
- Biggest risers – MLX, RSG, ORG, KDR, WHC and BPT.
- Biggest fallers – IPH, DMP, EWC, HSO, S32 and NXT.
If the market wobbles then Stock Picking will be a lot more important this year. Find out how to do it on one of my one day courses costing $750 - click on the button below - we are adding new dates all the time as they sell out:
- Telstra (TLS) +0.58% 1H net profit A$1.7bn, down 4.9% on the pcp. 1H revenue A$12.91bn, up 0.8%. EPS 14.3c, down 3.4%. Operating expenses A$9.4bn, up 10.6%. If you excluded the impairment charge for Ooyala, NPAT was up 9.5% and EPS up 12.2%. The company announced an interim dividend of 11c. Mobile sales revenue grew by 0.8% to a$5.1bn. Retail hand-held customer services revenue increased by 235,000. Mobile broadband revenue declined by 8.6% to A$470m despite an increase in customers. Mobile hardware revenue grew by 8.2% to A$1.2bn including a strong demand for iPhone X and iPhone 8 devices. Fixed revenue declined by 8.3% to $3bn impacted by increased rate of nbn migration competition. have been dented by its video streaming foray.
- Origin (ORG) +6.86% 1H net loss of A$207m versus pcp loss of A$1.56bn. 1H underlying profit of A$428m versus A$173m. The company says FY outlook for energy markets has improved. Guidance was reaffirmed, and forecasts FY energy markets underlying EBITDA of A$1.78bn - A$1.85bn; capital expenditure of A$360m - A$420m; is on track to reduce net debt below A$7bn by end FY18; and affirms guidance for its share of APLNG production of 245-265 Petajoules. No interim dividend to be paid.
- Sonic Healthcare (SHL) -1.82% 1H net profit A$228.6m, up 16% on the pcp. Revenue A$2.6bn, up 8%. EPS 54.1c, up 15%. Margin expansion of 20bp. The company says it’s on track to achieve FY earnings guidance and says it will benefit from a A$20m US tax law change. Its European operation are experiencing strong organic revenue growth. German revenue growth of 20% included the Laboratory Bremen and Staber Lab Group acquisitions. And its contract win in the UK, to provide lab services to Barnet Hospital and Chase Farm Hospital in London, is set to yield over £12m in annual revenue. The company declared an interim dividend of 32c, up 3.2%.
- Healthscope (HSO) – 4.81% 1H net profit A$77.5m, down 13% on the pcp. Group revenue up 4.9% to $1.2bn. Hospital revenue up 5.9% to $1.1bn. The decline in EBITDA was due to softer private hospital market conditions, one-off planned brownfield expansion disruptions, and the performances of Holmesglen Private and Frankston Private. An interim dividend of 3.2c was declared. HSO says it expects 2H operating EBITDA to continue into FY19.
- Suncorp Group (SUN) – 2.40% said its interim net profit fell 15.8% to $452m from $537m a year ago after taking a hit from the Victorian hail storms and ploughing money into strategic programs like its controversial marketplace strategy. This was slightly above forecasts from Citi analyst who were tipping NPAT to sit at $488m.
- South32 (S32) – 5.41% 1H net profit US$543m, down 12%, underlying earnings US$544m, up 14%, net cash balance of US$1.4bn. Group output volume to be marginally higher in the second half. The company said its separation with South Africa energy is ‘well advanced’. It will pay an interim dividend of 4.3c, and a special dividend of 3c. It also announced a US$93m share buy-back. Market loves special dividends and buy backs. Guidance has been reaffirmed but the Appin operations are still challenging.
- ASX (ASX) – 3.38% Said its first-half net profit rose 5.1% to $230.5m. Revenue for the six months ended December 31 climbed 7.8% to $501.5m. ASX will pay a $107.2c interim dividend on March 28 to shareholders of record on March 8. Looks solid. Stock has fallen back in the recent sell off. May be time to have another look.
- 3P Learning (3PL) +18.57% 1H net profit more than doubles to A$4.8m, up 155%. Underlying core EBITDA A$10.3m, up 21%. Net debt of $16.5m with no term debt expected at end FY18. The company said it has completed year one of its three-year strategic plan, and this year plans to strengthen its product portfolio around maths and literacy and complete the implementation of its automated digital sales, service and marketing platform. It will not pay an interim dividend.
- Breville Group (BRG) +5.31% Net profit after tax of $36.3m up 7.8% with a one-off reduction in its US deferred tax assts. Revenue rose 13.6% to $385.4m Interim dividend of 16.5c.
- Evolution Mining (EVN) +2.15% said its interim net profit fell 10% to $122.52m from $136.67m. Revenue rose 10% in the six months ended December 31 to $782.14 m from $711.15m. Evolution reduced all in sustaining costs to a record low of $785 an ounce, a decrease of 20% on the previous period despite a 4% fall in production to 407,459 ounces.
- HT&E (HT1) +13.14% - the company formerly known as APN News & Media - said its net loss after tax for the full year widened to $117.5m from a loss of $6m in the previous year.
- McGrath (MEA) – trading halt - Reported a $25.51m loss from a $2.71m profit in the year-earlier period, weighed down by a $22m impairment of its company-owned sales segment. The results were worse than the earnings guidance it provided on January 22, that is, it would make a small loss of $50,000 and $1.6m in EBITDA. The stock is in a trading halt pending an announcement about John McGrath. Interesting.
- GrainCorp (GNC) +4.09% Said it expected to post an underlying net profit of between $50m to $70m in the 12 months to September 30. This compares to $142m in 2017. It expected underlying earnings before interest tax and depreciation of between $240m to $265m, down from $390m in 2017.
- Nextdc (NXT) -3.38% Another twist in the AJD data centre saga with the REIT company receiving an unsolicited non-binding approach to take the three call centres over for $280m. NXT had previously walked away from a $300m and AJD has advised it had given NXT first right of refusal.
- Qantas (QAN) +3.78% Standard & Poor's says the company will have to significantly boost investment in aircraft just as it may have to resume paying company tax in 2020.
BOND MARKET UPDATE
ALL ORDS SECTOR SUMMARY
ALL ORDS TOP MOVERS
ALL ORDS BOTTOM MOVERS
ASX 200 SECTOR SUMMARY
ASX 200 TOP MOVERS
ASX 200 BOTTOM MOVERS
- Unemployment numbers out this morning. Jobs rose 16500 with the headline rate of 5.5%. Huge volatility in the full-time part-time split.
- 'Year of the Dog' starts, Chinese markets closed.
- Chinese authorities have confirmed the first human case of H7N4 avian influenza in the coastal province of Jiangsu.
EUROPE AND US MORNING HEADLINES
- Another tragic US school shooting. Eight so far this year.
- Zuma quits as SA PM.
- Wells Fargo has struck a deal to sell its banking assets in Puerto Rico for about $1.7bn to Popular, the Caribbean island’s biggest lender.
- Teva had a great performance last night in the US, as Buffett has taken a stake in the company.
- In the UK, the average private sector employer expects to give staff an extra 3.1% this year, according to the Bank of England. First time pay settlements have broken through the 3% level since the GFC. Recruitment difficulties are at their highest level since 2004.
Henry Jennings has been involved in financial markets for over 35 years as both a trader and a broker in London and Sydney.
Starting his career in London trading derivatives and moving to Australia in 1989, Henry eventually settled at Macquarie Group, rising to become a Divisional Director responsible for Equity Trading in Australia. For the last decade, Henry has been involved in private client broking and now writes exclusively for the renowned financial newsletter Marcus Today. Henry regularly appears on ABC TV and Sky Business as a market analyst, commentator and strategist and has presented at various conferences most recently for the AIA on the Gold Coast.
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