Yovich & Co. Market Update - 11 October 2016

Oct 11, 2016 | Commentary

Changes In Market

 

 

 

Market Themes

  • The recent jitters in the NZ market has seen the market pull back from all time highs, mainly on profit taking and concerns that higher interest rates might impact on company earnings.

  • Overall, the market has fallen 6.1% since the high on 8 September. The biggest impact has been on the high yielding stocks such as the listed property companies and trusts. Here is a summary of the current prices and forecasted yields:

Stock 

  • The All Ords across the Tasman has had a much better run as we have seen commodity prices starting to recover and the mining companies continuing to bounce off their lows.

  • Over the past month, the US Markets have made a slight gain but talk of rising interest rates and the uncertainty surrounding the Presidential Election have seen investors taking caution.

  • Negative sentiment from the NZ share market crossed over into the currency with the Kiwi falling from recent strength against the Aussie and the Greenback.

Investment News

Tegel Group Holdings (TGH.nz)

Tegel listed on 3 May 2016 at an IPO price of $1.55 which was well received by investors as the stock price peaked at $1.80. The current weakness in the share market, a softening of poultry prices and Inghams Group listing on the ASX has seen the share price fall below the IPO price to $1.49. Below is a summary of FNZCs Research Note which was published on 11 October 2016.

 

Tegel is a consumer staple exposure with growth options. We believe Tegel is well positioned to enjoy a further rise in poultry’s share of the NZ consumer’s meat-protein plate over time. Tegel’s business strategy is also positioning the company to capture potential growth in demand for higher convenience consumer products as well as the opportunities arising from both existing and new export markets that are becoming available for NZ poultry products. We expect the company to maintain its earnings guidance and assign an unchanged target price of NZ$2.10 and is based on our NZ$1.98 spot DCF valuation. 

Financials & Forecasts

 

 

 

 

 

 

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About the author



Jarrod Goodall



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Weekly Update Investment Shares Bonds Market Commentary Tegel Group Holdings TGH.nz Property Investment



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