Yovich & Co. Weekly Update - 25 February 2013

Feb 25, 2013 | Commentary

This Weeks Themes

• With reporting season in full swing the NZ market rebounded to end the week above the 4200 level.

• After reaching a post GFC high, the Aussie market shed 2.3% on Thursday, snapping a 6 week winning streak due to talks that the U.S. may stop it's bond buying program.

• The Dow was little changed but Tech stocks in the U.S were down on the NASDAQ.

• The NZD fell after risk appetite dropped as a result of the U.S Federal Reserve indicating that Quantitative Easing might be about to end.

Investment News

Sky Network Television (SKT.nz) – First Half 2013 Result:

SKT announced to the market a stronger than expected first half result with earnings of $177.2 million, 8% above the expected number. The result was driven by increased average revenue per customer, take up of the MySky subscription service and lower costs. SKT gave guidance of a marginal uplift in earnings for the second half and a reduction in capital expenditure. The investment case for SKT is clear, they offer a relatively defensive business model with earnings and cash flow growth over the next few years. First NZ Capital has assigned SKT with a $5.70 price target and an outperform recommendation. Current price is $5.30

Fletcher Building (FBU.nz) – First Half 2013 Result:

It was going to be hard for FBU to continue to trade higher after a 35% rally between November and January to reach a recent high of $9.52. But the recent correction presents investors with an opportunity to gain exposure to the building sector which is starting to show good signs of increased activity. FBU's result was inline with earnings of $272 million and guidance of full year earnings of between $560-610 million. The commentary highlighted regional activity increasing in Christchurch and Auckland as a result of the rebuild and heat in the Auckland housing market. In Australia, FBU is experiencing an upswing as home buyers and builders react to lower interest rates. First NZ Capital has assigned FBU a Neutral Rating and $9.00 price target. Current price is $8.75.

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Jarrod Goodall



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