Kerry Stokes and son and heir Ryan, have sent another strong message that the legacy media sector, where they first made their name and then lost a fortune - is no longer of any relevance by emerging with a near 10% stake in struggling building products giant, Boral.
In more normal times - and nothing is normal at the moment - low oil prices benefit the global economy and stocks such as manufacturers and transport companies. Tim Boreham outlines those Australian companies which stand to benefit from significantly lower energy prices.
Shares in Boral sold off yesterday after confirming staff at its North American windows business inflated earnings by nearly $37 million for 18 months between March 2018 and October 2019, as well as an earnings downgrade partly generated by the impact of the bushfires.
Morgan Stanley suspects the market is finding it difficult to recognise the inherent asset value in the stock. The broker assesses the stock is currently trading at a meaningful discount to both peers and its historical valuation range.
UBS lowers its rating to Neutral from Buy as the stock is approaching the target. House prices are lifting and housing approvals appear to be bottoming but the next 12 months are still likely to experience a contraction ahead of a trough, in the broker's view.
Boral's result has provided the broker with more confidence management's FY19 guidance can be achieved. A fly ash price increase of 13% and counting underpins that confidence although guidance for a flat FY in Australia still looks risky in the context of the housing slowdown, in the broker's view.