Yovich & Co. Market Update - 5 November 2018
Nov 5, 2018 | Commentary
New Zealand Equities
Biggest movers for the week were Z Energy -12.46%, Sanford -2.13%, Meridian -1.59%, Ebos -1.38% and Stride -1.05% on the downside, with Air NZ +11.65%, Gentrack +9.38%, Kathmandu +8.85%, Ryman +6.75% and a2 Milk +7.62% on the upside.
The market has been volatile over the previous 4 weeks with markets falling from the height of this year’s peak of 9375.96 on 21 September to 8568.40 as of 26 October. This has seen an 8.6% drop in the market while still being up 5.2% from 12 months ago, it takes a 10% drop before it is called a correction. The last time that the market was a correction was between 9 September 2016 and 4 November 2016, with a 10.1% drop over an 8 week period.
As in 2016, this drop has seen great buying opportunities for astute investors looking at holding long-term stocks, such as Banks, telecommunications, infrastructure stocks and utilities companies.
Australia and New Zealand Banking Group
Tax paid profit for the year ending September is A$6,400m down from A$6,406 last year.
Currently, ANZ is up 2.73% for the week while it is still down 10.73% on a rolling year.
Dividend of 96.76c that includes a 10c New Zealand imputation credit is payable 18 December. At the current share price of $28.28, the gross yield is 6.84%.
National Australia Bank
Tax paid profit for the year ending September is up 5.1% at A$5.55 billion from A$5.29 billion the previous year.
A dividend of A$0.99 per share is payable 14 December. This brings the gross yield to 7.77% with the current share price at A$25.46. The dividend payment of A$0.99c has been steady for five years running.
Currently National Australia Bank is up 1.95% for the week while trading 12.61% down for the rolling year.
Westpac Banking Corporation
Tax paid profit for the year ending September is up 1% at $8,095m. There is a final dividend of $1.01 to be paid 20 December. This brings the total gross dividend yield to 7.50% at the current share price of $29.10.
Currently, Westpac Bank is 1.41% up for the week and down 14.25% for the rolling year.
Fortescue Metals Group
Shipments of 40.2 million metric tons for the three months through September. Fortescue’s average price realisation is US$45/dry ton, up 12.5% on-quarter.
Sales of its new 60.1% iron grade product, West Pilbara Fines, are expected to begin in December, with Fortescue looking to capture rising demand for higher grade ore from Chinese steelmakers. It forecast exports of 5-10 million tons of that product during the second half of its fiscal year.
With the current share price at A$4.20 and a 12-month target price of $5.50 AUD First NZ Capital have an outperform rating.
A strong start to the financial year with first quarter NPAT up 0.2% from $15,051m to $15,075m. There has been strong growth in the Information Management division which has seen an increase in operating revenue of 8.5% for the same period as last year. The new acquisitions of Shred-X with its newly-acquired medical waste businesses, are the main drivers for this increase.
With a current share price of $7.31 the expected gross dividend yield is 5.65%.
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