Blackstone buys 10% of Crown (LLC, COL)
WHAT MATTERED TODAY
A strong session across the board today led by the banks which accounted for more than 50% of the day’s gains. When ANZ and NAB are up more than 6%, WBC up more than 5% & CBA more than 4% it’s always going to be a decent session. NAB finishing today’s session at $16.29 v $14.15 issue prices.
Casino stocks were in focus today and frustratingly, Crown (CWN) added ~11% after private equity giant Blackstone took a 10% stake thanks to a discounted sell down by Melco Crown. I talk more about this in the recording below however suffice to say its bullish for CWN, a stock we’ve been looking to add to the portfolio but have been too pedantic on price.
Elsewhere, Energy stocks were also firm as they start to look through the short-term noise around the Oil price and factor in a recovery from recent lows. We remain bullish Oil stocks.
Today the ASX 200 added +80pts /+1.51% to close at 5393 - Dow Futures are trading up +211pts/+0.88%
ASX 200 Chart
ASX 200 Chart
CATCHING MY EYE:
Direct From The Desk: Recording covering Banks, Crown (CWN), Lendlease (LLC) & Coles (COL) – click here
Lendlease (LLC) +8.8%: resumed trading today after successfully getting a $950m capital raise away. At $9.80 a share, those lucky enough to land some are already 18.5% ahead with new shares offered at a 9% discount to the last price. A share purchase plan is now underway in an effort to take the total raised to $1.15b. The raise came to sure up the developer’s balance sheet with COVID-19 causing delays to projects in London, Singapore, Kuala Lumpur, Milan and across the US. The company said that their FUM business had managed to secure a $1.6b mandate which will help support earnings there despite revaluations elsewhere impacting the result.
The full year result will also be hit by delays in the development segment and a fall in productivity in construction causing Lendlease to walk from guidance. The sale of the engineering business is progressing, though it may not be in a position to complete the transaction in this half. Lendlease is cheap and was being weighed down by the need to raise capital with plenty of debt on the balance sheet. Now that this has been resolved, LLC could see a floor in place and represents decent buying.
Lendlease (LLC) Chart
Coles (COL) –4.14%: out this morning with a very strong sales update. Supermarkets experienced like for like sales growth of +13.1% on 12 months ago, with not only a strong (and expected) COVID-19-driven ‘pantrydemic’ episode but also a strong January and February by the look. They also said price inflation was +2.6% vs. +0.9% this time last year showing that they had success rising prices during this period of increased demand – something that won’t be featured in their ads!
Not surprisingly (if our household was anything to go by), Liquor sales were strong with LFL sales growth at +7.2% vs. last year and that was despite the negative impact of bushfires in January. They also saw good growth in their convenience business. In terms of current trading they said “In the first four weeks of the fourth quarter, which included the Easter period and ANZAC Day, Supermarkets comparable sales growth has broadly trended back toward the levels seen in the early part of the third quarter (pre COVID-19).”
The last line there explains why the stock is trading down 3% this morning + it also speaks to an increasing level of normality across the economy, a positive for other areas.
Coles (COL) Chart
BROKER MOVES:
- Brickworks Raised to Buy at Citi; PT A$14.20
- Northern Star Cut to Neutral at Macquarie; PT A$14
- Technology One Cut to Neutral at Macquarie; PT A$9.75
- Perseus Cut to Neutral at Macquarie; PT A$1.20
- oOh!media Resumed Outperform at Macquarie; PT A$1.25
- Mayne Pharma Rated New Buy at Canaccord; PT 75 Australian cents
- Sonic Healthcare Cut to Sell at Morningstar
- Sydney Airport Raised to Buy at Goldman; PT A$7
- Atlas Arteria Raised to Buy at Goldman; PT A$6.84
- Saracen Mineral Cut to Hold at Jefferies; PT A$4.85
- nib Raised to Neutral at Credit Suisse; PT A$4.90
- Westpac Raised to Buy at Bell Potter; PT A$17.30
OUR CALLS
No changes today
Major Movers Today
Have a great night
James, Harry & the Market Matters Team
Disclosure
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