Marcus Today End Of Day Report
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- ASX 200 up 7.
- High 5973 Low 5928. US volatility weighs.
- Results in focus with a number of hits and misses.
- A2M shows BAL and BKL clean heels.
- Banks subdued as industrials in limelight.
- AUD weaker on USD strength at 78.05c.
- Bitcoin starts to slip US$10,793.
- AUD Bullion around $1,327/oz.
- US futures down 112 as bond yields rise.
- Asian markets ease with Japan down 0.97%.
FUTURES AND HIGHS AND LOWS
- MARCUS CALL – FOMC minutes and the resurgence of volatility. Also, an update on our MT GROWTH portfolio.
- SMALL STOCK PORTFOLIO – Henry adds PLS and says goodbye to RUL. He has three interesting stocks on his watchlist.
- TRADING PORTFOLIO – One new trade. We were stopped out of AGL and MLX. One stop loss raised.
- INSIDERS – It’s all about lithium and ‘Struggling1’ says buy AVZ.
- 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
- WGN +9.23% broker upgrade.
- A2M +7.08% initial rally fades a little.
- BUB +6.62% after JD.com agreement.
- JRV +5.45% livewire write up.
- APX -6.00% broker downgrades post result.
- SRV -7.29% broker downgrades.
- BLA -4.77% change in substantial shareholding.
- WTC -4.89% brokers cool to growth story.
- GSW +33.33% bounce is on.
- TCL -1.88% bond proxies fall on rate outlook.
- PDN -3.23% optimism unwinds.
- ARB +9.89% positive broker commentary.
- BWX +8.06% bounces after shocker yesterday.
- MLX -1.76% broker recommendation.
- MSB +11.70% positive Phase 3 trial outcome.
- Speculative stock of the day: Viralytics (VLA) +174.80% after a cash bid from Merck at 175c. That is now two ASX listed biotech being bid for.
- Biggest risers – VLA, SXX, GLA, NME, EMP, GSW.
- Biggest fallers – CRB, JVG, NCR, BPS, RXP, WCN.
- Westfield Corporation (WFD) –0.23% FY17 full year results. Net Profit up 14% to US$1.55bn, revenue up 17% to US$2.11bn, Funds From Operations came in at US$707m or US34c per share, at the top end of forecasts and the company increased its full year dividend by 1.6% to US25.5c. This year the company proposed to combine with Unibail-Rodamco which would see WFD shareholders receive US$2.67 in cash and 0.01844 securities in Unibail-Rodamco per WFD share.
- Michael Hill International (MHJ) +2.74% 1H interim results. NPAT of A$8.7m. EBIT A$15.1m, down 12.6%. Operating revenue A$342.2m, up 4.5%. Group same store sales A$316.8m, up 0.3%. Declared dividend of 2.5c. The decline in earnings came on the back of deteriorating business conditions in the US, its Emma & Roe business and a challenging November trading period.
- Fortescue Metals (FMG) –0.20% The company is reducing its debt by offering to repay US$1.4bn of its 2022 9.75% Senior Secured Notes via Tender. The offer to holders is US$1.1025 for every US$1.00 of principle. FMG has said the move is to reduce the company’s cost of capital as part of its long-term capital strategy.
- Seven Group Holdings (SVW) –0.16% completed its 7-year convertible bond issue, raising $350m to pay down its existing Coates Hire debt.
- Webjet (WEB) +16.04% Statutory NPAT $18.4m, down 48%. EBITDA $40m, down 10%. Revenue $359.8m, up 188%. Excluding the costs associated with the JacTravel acquisition, NPAT for continuing operations was up 25%, and EBITDA up 63%. An interim dividend of 8c was declared. The company says it expects 2H trading to be stronger and is on track for FY18 EBITDA to be more than A$80m.
- Bellamy’s (BAL) –5.93% 1H performance, revenue up 43.7% to $170m, Camperdown revenue was $4.9m, EBITDA up 90% to $34.9m and net profit came in at $22.4m. The company upgraded its forecast revenue growth to 30-35% anticipating first half sales to be stronger than the second half. FY18 EBITDA margin has also been upgraded to 20-23%. The company too acknowledged the risk of a dynamic and highly regulated market and now turns its attention to obtaining a CFDA licence and executing a long-term growth plan.
- OZ Minerals (OZL) +5.39% FY17 result. Net profit $231m, up 114%. Revenue $1.0bn, up 24%. Underlying EBITDA $539m, up 44%. 112,008t copper produced, 126,713oz gold produced. Copper guidance achieved, and gold exceeded. Cost performance at bottom end of annual guidance range. Prominent Hill’s mine life was further extended to 2029 with an 18% increase in underground ore reserve providing a 3.5 – 4mtpa production rate from 2019 to 2029. Carrapateena construction progressing on schedule and budget. Two new international earn in agreements and one new Australian agreement established throughout the year. Company said the outlook for copper is optimistic with demand coming from infrastructure and transport. 14c final declared dividend.
- Qantas Airways Limited (QAN) +5.88% 1H results. The company met all its financial targets and reported its highest 1H underlying profit before tax of $976m, +15% pcp, despite rising fuel costs and international capacity. 1H revenue rose 5.8% to $8.66bn, the company will pay a 7c unfranked dividend totalling $122m and announced a share buy-back of up to $378m.
- Nine Entertainment Group (NEC) +16.22% 1H interim results. Revenue $720m, up 9%. Group EBITDA $181m, up 51%. NPAT $116m, up 55%. Costs were flat on the pcp. Ratings performance came in at 39.5% for the 25-54yr old demographic, up 3.6 points. Stan subscriber base increased 33% to 930,000 and approaching break-even. The company said it won all key buying demographics during the 2017 ratings season, highlighted by the breakout performance of Australian Ninja Warrior and tv series, The Block.
- Blackmores (BKL) –14.73% 1H interim results. Group net sales $287m, up 9%. NPAT $34m, up 20%. A 150c interim dividend was declared. The company said the results were driven by strong performances from China, BioCeuticals and across its other established Asian markets. Revenue in Australia and New Zealand was lower on the pcp due to a subdued broader consumer market. China on the other hand grew 27% with online sales events including Singles Day delivering record sales.
- Alumina Limited (AWC) +0.43% Full year results, net profit came in at US$339.8m, up from a net loss of US$30.2m a year earlier. Final dividend of US9.3c declared bringing the full year payout to US13.5c, up 200% on last year. Alumina prices strengthened during 2017 because of growth in demand, tightness in the Atlantic market and structural and environmental reforms in China.
- Crown Resorts Limited (CWN) +4.40% 1H result from Australian operations reflected mixed trading conditions. Net profit down 38% to $238m, adjusting for VIP win rates, normalized net profit rose by 0.6% to roughly $192m. Crown said VIP program play turnover in Australia rose by 16% and that its new Sydney casino and resort remains on schedule to be completed in the first half of 2021. Revenue from operations up 1.8% to $1.8bn. Interim dividend of 30c declared, down 73% on the previous period.
- Afterpay Touch Group (APT) +1.89% 1H result. Revenue +732% to $49.9m, EBITDA +1917% to $12.1m and the company reduced its net loss after tax by 50% pcp from ($1.4m) in 2016 to ($0.7m) this year. The performance is largely attributed to the merger with Touch Group. The company will not pay an interim dividend.
- Yowie Group (YOW) – Has been taken to court by in the US by Whetstone industries related to a re-filing of a tortious interference case against Whetstone. Yowie does not believe that any material costs will eventuate other than legal costs but cannot say for sure.
- Link Administration (LNK) +0.12% 1H report. Revenue +27% to $503.3m, NPAT up 55% to $64.87m and operating EBITDA up 36% to $148m. The company will pay an interim dividend of 7 cents per share.
- Kogan (KGN) +18.95% EBITDA up 93.2% to $14.1m Fully franked dividend of 6.9c up 76.9%.
- Cedar Woods Properties (CWP) +1.54% 1H result. NPAT up 6.5% to $3.22m was consistent with guidance, sales fell from $52m pcp to $50m, however it has made a record number of pre-sales ($388m) which will lead to a strong second half. The company will pay an interim dividend of 12 cents per share.
- Viralytics (VLA) +174.80% Merck has bid 175c in cash for the company. VLA is a biotech with a cancer treatment called CAVATAK.
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ALL ORDS SECTOR SUMMARY
ALL ORDS TOP MOVERS
ALL ORDS BOTTOM MOVERS
ASX 200 SECTOR SUMMARY
ASX 200 TOP MOVERS
ASX 200 BOTTOM MOVERS
BOND MARKET UPDATE
- Chinese shoppers stepped up spending during this year's week-long Lunar New Year holiday, splashing out more at restaurants, retailers and cinemas, according to Ministry of Commerce data released on Wednesday.
- China's steel producers are eager to unleash their mills' capacity when this winter's output curbs at the end of next month, hoping for a repeat of last year's record profits based on high margins and less competition as outdated plants were closed.
- European fashion giants H&M and C&A, as well as technology company 3M, are looking into a report in the Financial Times alleging that inmates of a Chinese prison made packaging used by the companies.
- A record $49 billion was invested in emerging market private equity deals in 2017, data from industry body EMPEA showed on Wednesday, with Asian private capital fundraising at its highest since 2008.
- China was Germany's top trading partner again in 2017, steaming past the United States for the second consecutive year, official German data showed on Wednesday.
EUROPE AND US MORNING HEADLINES
- The Bank of England could end up needing to raise interest rates faster than investors expect, its chief economist told lawmakers, striking a slightly more hawkish tone than his central bank colleagues.
- In the US the state pension plan for Florida teachers held 41,129 shares in American Outdoor Brands Co the company that made the rifle that was involved in the most recent massacre.
- The US Department of Commerce confirmed on Wednesday evening its preliminary finding that Argentina and Indonesia engaged in dumping of biodiesel and imposed dumping duties ranging from around 60 to nearly 277%.
- More disquiet amongst UK Tories on Brexit plans as once again May comes under pressure.
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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