Author: james Carter
Another six companies with interesting reports yesterday
• The ASX 200 touched another high since May 2008 this morning before selling off and ending 12 points lower at 5,904
**Toll Holdings (TOL) agreed to a takeover offer by Japan Post for ~$5bn last night, ahead of reporting its earnings today (missing analysts’ expectations). This will be a combination of $9.04 a share with a fully franked dividend of 13c a share. There a current reported short interest of 25.9m shares, obviously, TOL will experience a significant outperformance against the broader market today.**
• The ASX 200 closed 58 points higher at 5,916. It’s highest level since May 2008! • Plenty of action was seen today, particularly in Mergers and Acquisition. Last night, Toll Holdings (TOL) was approached by Japan Post offering a takeover bid ahead of reporting its disappointing earnings this morning. TOL announced it has agreed to a takeover offer valued at $6.49bn, or $9.04 a share plus an interim dividend of 13c a share. TOL closed $2.87 (+47.2%) at $8.95.• Woodside Petroleum (WPL) closed 4.4% higher at $36.45 after posting its earnings, lifting its full year profit by 38%.• Primary Healthcare (PRY) disappointed its investors, reporting its half-year profit well below estimates. PRY closed 4.7% lower at $4.68.• Dexus (DXS) closed 1.3% lower at $7.92 after reporting a slightly lower than expected earnings and upgrading its profit guidance for the 12 months.• In the Retail Sector, The Reject Shop (TRS) rallied 14.8% at $6.20 despite reporting a profit slide with its sales. Could the retailer space be the new gold sector as mentioned previously?• Insurance Australia Group (IAG) sold off, ending the day 8.5% lower to $5.85 after reporting its half-yearly earnings well below consensus.• Ardent Leisure (AAD) was also a victim, after missing its earnings estimates. AAD closed 15.9% lower due to low growth seen in its health club division.• Bega Cheese (BGA) and Fletcher Building (FBU) both disappointed the market with its earnings. BGA closed 3.4% at $5.05 and FBU down 5.4% at $7.99.
Be prepared to get off the equity train early but not just yet
• The ASX 200 closed 30 points lower at 5858 as Commonwealth Bank (CBA and Boral (BLD) traded ex-dividend and the European negativity remains in place until the Greek debt to its creditors is solved.• ANZ Bank (ANZ) closed 88c lower, or -2.5% at $34.99 after posting its unaudited trading update for the first quarter, clearly disappointing investors’ expectations. • Commonwealth Bank (CBA) traded ex-dividend ($1.98) and closed $3.47 lower (including its $1.98 dividend) at $90.02. Note, seasonally, CBA has been in positive territory for the last 16 years in April, we remain a holder of CBA at present.• Asciano (AIO) closed 1.6% lower at $6.31 despite posting a solid half yearly earnings and highlighting a higher payout ratio to its investors.• Challenger Financial (CGF) closed 0.9% lower at $6.45 after reporting its half yearly earnings below analysts’ expectations. It has however increased its interim dividend and its retail annuity business to continue its growth this year.• Macquarie Group (MQG) rallied 3.5% at $70.90 after updating its investors with its operational briefing stating it expects to report its full year earnings in the upper end of its forecast range.• Fortescue Metals (FMG) closed 4.9% lower at $2.55 after reporting its first half earnings. Despite beating its forecast, concerns continue with its growth prospect.• Seek (SEK) sold off today, closing 8.7% lower at $17.10 after missing analysts’ expectations. See the Hickman Report in regards to our take profit call around $18.50-$19 recently.
The Market is betting heavily on a US correction, but is it premature?
• The ASX 200 sold off early in the morning, down as much as 36 points at 5842, only to recover and close 11 points higher at 5888.• Bendigo & Adelaide Bank (BEN) closed 4.4% lower at $13.74, after reporting its half-year earnings of 2015 in line with analysts’ expectations. Investors however are focusing on the future growth earnings outlook, which look weak.• Commonwealth Bank (CBA) closed 0.3% higher at $93.47 after hovering near its all-time highs. CBA trades ex-dividend tomorrow, for the amount of $1.98 fully franked.• G8 Education (GEM) closed 10% lower at $4.30 after missing consensus numbers in its half-year earnings.• QBE Ltd (QBE) closed 3.4% higher at $11.98 after selling its Australian Agency Business for $290m in cash by Steadfast Group (SDF), currently in trading halt pending capital rising to pay for QBE’s asset.
My thoughts on 5 more company reports that reported yesterday
** Please note in this morning report – I am a buyer of TLS around $6.20, not $5.20.**
Really bullish, there's more to go in the reflation rally
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