Yovich & Co. Weekly Update - 25 November 2013

Nov 25, 2013 | Commentary

This Week's Themes

  • After failing to reach the significant 5,000 point level, the local market slid from record highs as the market took a breather from what has been a great year so far for New Zealand equities. The market is up over 18% since January 1st.

  • Fisher & Paykel Healthcare (FPH.nz) had their meeting which confirmed the expectations that they are gaining market share with profits increasing by 33.8%. First NZ Capital reaffirmed their target price of $4.50.

  • U.S. markets continued their record run as the Fed continues to fuel the market with comments that stimulus will continue and employment data beat expectations.

  • The NZ dollar continued to strengthen against the Aussie to close the week at its highest level since 2008. It lost ground against the U.S. dollar but remains trading in the 82 to 84 cent range.

Investment News

Ryman Healthcare (RYM.nz) – First Half Result

Ryman continues its earnings growth, reporting another record net profit for the first half of this year of $78.4 million, an increase of almost $10 million over last year's performance. Ryman also announced a dividend of 5.6 cents to be paid on 13 December 2013 and reaffirmed their expectations to reach their goal of growing underlying profit by 15% for the year.

There were several other positives in the result with the main focus being on the success of the Melbourne development. Ryman have presold 48 out of the 65 apartments in the first stage which is well ahead of Ryman's targets and impressive given that completion is still six months away. This success has given Ryman the green light to pursue their Melbourne Strategy. The ultimate catalyst for further upward movements in the share price would be Ryman announcing that they are looking for multiple sites, yet we will have to wait until next year to confirm this strategy.

First NZ Capital has improved their target price to $8.25 as they factor in a higher probability and valuation for the Melbourne Strategy. Current price is $7.42

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Jarrod Goodall



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