Yovich & Co. Weekly Update - 26 May 2014
May 26, 2014 | Commentary
This Week’s Themes
The local market continues to seesaw around all time highs as investors consolidate positions after a 8.63% rally since the New Year.
Strong manufacturing data from China helped the Aussie market to edge a gain as the Iron Ore price bounced back from its low in April.
All three indices in the U.S. had a positive week as they headed into the Memorial Day long weekend. The NASDAQ is rebounding strongly after weeks of declines, showing sentiment is turning back towards riskier assets.
The NZ currency was mixed but the positive sentiment in U.S. markets lead the USD to gain ground against both the Aussie and Kiwi.
Fisher & Paykel Healthcare Corporation Limited (FPH.nz) – Full Year Result:
Fisher & Paykel Healthcare reported a very strong result, with constant currency revenue growth at 13%. Even more impressively, reported earnings in constant currency terms, grew by 44%. This reflected General Practitioner expansion and operating leverage for their Respiratory and Acute Care (RAC) and Obstructive Sleep Apnea (OSA) products. Reported revenues, at NZ$623mn, increased by 12.1% when compared to the previous corresponding period. Profit stood at NZ$143 million compared to NZ$112.7 million in the 2013 year, up 27.2%.
FPH remains in our preferred list as we like the growth path they are on in the U.S. healthcare sector and their exposure to US Dollar earnings while the Kiwi is at elevated levels. FPH is targeting over 10% growth in the RAC and OSA products lines while still paying a respectable dividend to investors. FNZC has a target price of $4.80, current price is $4.50 and they are forecasting a gross yield of 4.1% in 2015.
GuocoLeisure Limited (GLL.nz) – Reminder of Delisting:
The final trading day in GLL ordinary shares will be Tuesday, 24 June 2014. The shares will continue to be traded on the Singapore Exchange but if you decide to sell it will be difficult without having a Singapore broker. We suggest that if you do hold GLL shares that you should sell them prior to 24 June 2014.
Weekly Update Investment Shares Bonds Market Commentary Fisher & Paykel Healthcare FPH.nz