RIO report just out – good numbers, as were others today…
What Mattered Today
Another good session locally with the market grinding up throughout the day with a pop higher towards the close. We had a range of +/- 35 points, a high of 5655, a low of 5620 and a close of 5651, up +29pts or +0.52%.
RIO’s report has just dropped – quick overview here– FUTURES markets open and locally there is no real reaction – SPI up +5pts from today close at time of writing so there is not massive optimism obvious in the market for what was a very good result.
NPAT - $5.1bn vs $4.9bn consensus
Dividend – US170c vs $133c consensus
Buy back – UK Plc stock, US$0.5bn … lower than some were expecting
A very good result from RIO although stock price has been very strong leading into it. The divi was a clear standout, well above expectations however the small buyback ($0.5bn in London), lower than some expected may drag. Gearing incredibly low at 17% - almost under geared. A good result but not am absolute cracker!!
Rio Tinto (RIO) Daily Chart
ASX 200 Intra-Day Chart
ASX 200 Daily Chart
Elsewhere today, reports today from Carsales.com (CAR),BWP Trust (BWP) & Cimic (CIM) – all were OK
Carsales.com (CAR) is a stock we’ve been bearish on – a stock we were suggesting to SELL from above $11 as written in our outlook piece targeting $9. It dropped 10% quickly after we penned that note but rallied back +7.76% today or +78c to close at $10.83. The 1H earnings missed consensus marginally but top line growth was strong (better than we thought), largely from their overseas operations. Despite the growth, margins declined in all divisions which is clearly a concern going forward. The stock dropped 12% in the month of January – and has recouped some of that today. Still no interest
Carsales.com (CAR) Daily Chart
Premier Investment (PMV), the owner of Peter Alexander, Smiggles etc upgraded earnings and the stock put on 11.9% after a tough few months for the retail stocks. These guys do things well, have strong brands and is one of the better retailers in this current environment.
Premier Investments (PMV) Daily Chart
Henderson (HGG) had a very good day rallying +3.72% ahead of reporting tomorrow. In simple terms, HGG is cheap, on around 11.7 times FY17 earnings, will pay a 5.8% yield based on 65% payout. They’ve had a tough time, as have all UK based fund managers with recent flow data showing the biggest outflows since the GFC. If you want to buy a company that’s had a v’tough 12 months and is priced accordingly, but importantly is about go through a BIG company transforming transaction then HGG is worth a look. A lot have criticised our positive stance towards HGG in recent times, and it’s one of those ‘hard trades’ that feels a bit uncomfortable, but it’s a stock that offers value in an expensive market + it’s got a legitimate platform for growth in FY17 and beyond. More details in tomorrow’s result around Janus will be key…
Henderson Group (HGG) Daily Chart
On the other side of the ledger today was Genworth (GMA) which is the mortgage insurer – down -14% on a weak set of numbers. This is the canary in the coalmine for the Aussie housing sector and the trends seem to be softening. One chart around delinquencies interesting in their chart pack today – uptick across the board with the most stress in WA. One for the housing BULLS out there!
Sectors
ASX 200 Movers
What Matters Overseas
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