Yovich & Co. Market Update - 31 January 2019
Jan 31, 2019 | Commentary
New Zealand Equities
In summary, the NZX50 had 18 companies on the downside, 3 remained unchanged and 29 companies were on the upside. Since the first week back the NZ50 has been in the black. The NZD/AUD closed the week just shy of its high at 0.9526. Since December the currency has been sitting in the range of low 0.95 to high 0.94.
Sky TV is having a challenging time as providers such as Netflix, Spark and Lightbox are offering content that competes with SKY TV’s current offering, the current share price is at $1.88.
Pushpay has seen an increase in share value since the announcement that Pushpay has achieved its target of breakeven on a monthly cash flow basis prior to the end of the year. Over 1.6m shares were traded on Friday compared to the average of 1.3m for the previous 4 days. The current share price is at $3.48.
Looking back over the month volatility has reduced and the Index is trending upwards. From 22 January the index has consolidated the gains made earlier in the month. Overall since 1 January, the market is up 3.4%.
Is it time to check those portfolio allocations? The markets have seen a volatile last quarter with some portfolios wiping off their gains for the year. These falls are due to the continued trade negotiations between USA and China, the “no deal” vote for the Brexit agreement, the USA government shut down, and lower earnings than expected for many companies, all adding to the uncertainty. There is a move to weight portfolios with companies that will do well in a slowing environment. High yielding and defensive stocks are becoming the most favoured; such as Listed Property companies and Utility companies. Remaining invested over the long term will see the portfolio rebound back once markets and economy improve. Talk to your Adviser if you are considering a rebalancing of your portfolio.
Investor Property Limited
Announced an increase in Investors’ annual cash dividend from 7.46c to 7.60c per share, for the financial year ending March 2019. Current share price is $1.54 and expected gross yield of 7.3%.
Specialise in on board management solutions for the road transport industry. Eroad is showing great growth with unit sales up 5.1% for the quarter. Expected 12 month target price is $3.25 and is currently trading at $2.30.
Provides residential villas and apartments within its retirement villages, and also provides a full range of residential aged care services (including rest home, hospital and dementia level care) at its aged care facilities.
Half year ending 30 November 2018 results show that underlying net profit after tax is up 5.3% at $20.9m from $19.9m.
Total assets increased by $209.7m to $1.2bn with net debt of $197.3m as of 30 November 2018, with the net debt to equity ratio of 26.7%. An interim dividend of 2.1cents per share (not imputed) is payable 18 February, and expected gross yield of 4.8%.
With favourable performance in Auckland and the International Business, Sky City expects 1H19 normalised tax paid profit to be around $97m up 11%. Current share price is $3.80, and expected gross yield of 6.5%.
Air New Zealand
Has announced that it is now expecting earnings before taxation to be in the range of $340m to $400m for the year ending June 2019. Instead of the previously announced guidance of between $425m to $525m. The share price has reacted negatively to this announcement and is down 14.06% at $2.81 from $3.27. At current share price gross dividend yield is 9.3%. The Board is still anticipating declaring an interim dividend of 11 cents per share.
Has announced a maiden Inferred Mineral Resource of 130 million tonnes (MT) @ 3.3% heavy mineral (HM), above a 1.2% HM cut-off at its 100% owned Night Train Mineral Sands deposit, on the Dampier Project near Derby. This includes a high grade component of 50Mt @ 5.9% HM, above a 2.0% HM cut-off. The deposit is located just 20km south of the world class Thunderbird Mineral Sands deposit and 2km from the recently constructed Thunderbird mine access road. Mineralisation at Night Train is zircon and leucoxene rich, clean and free of coatings, has a high valuable heavy mineral (VHM) component and contains low levels of trash minerals, oversize and slimes.
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