Viewpoint: Bullish
KMD +1.06%: 1H results for the recreational apparel company came in largely as expected given most numbers were pre-released. Sales jumped +19% in their largest segment of surf, while Kathmandu saw 51% growth on pcp and Oboz (which is their hiking boots brand) was up 124% to a new record.
There has been considerable focus on the Hybrid market in recent days given the move by Swiss regulators to completely wipe out the value of ~$US17bn of risker Credit Suisse notes, which are referred to as CoCos (Contingent Convertibles). Today we’ll revisit what this means for our hybrid holdings in the Market Matters Income Portfolio. NB: Legal action is now underway focussed on the regulator for taking this action.
NHC +8.57%: Rallied today after reporting 1H net profit of $668m vs. $330m this time last year while they announced an interim dividend of 30c fully franked plus a special dividend of 10c fully franked, putting it on a 7.5% yield for the half (15% annualised) plus franking. This equates to a ~10% grossed-up return for the half, which is the reason we hold a (4%) position in the Market Matters Income Portfolio.
US stocks experienced another volatile session overnight but they finally closed with a flourish, the S&P500 advanced 0.9% helped by a rare positive session for the regional banks while the NASDAQ closed up +0.3%. It might surprise many purely local investors to know that the broad-based S&P500 rallied last week and it’s compounding these gains at the start of this week .
HLS +8.27%: Healius jumped today after a takeover bid from competitor Australian Clinical labs was announced pre-market. The deal would see Healius shareholders receive 0.74 ACL shares for each HLS owned, which represents no premium to Friday’s close price, but Healius shareholders would end up with 68% of the combined group.
Hearing aid company Cochlear has tread water for the last few years which in comparison to many of its growth peers is a great result when interest rates soared higher. We particularly liked their 1H23 result with revenue of $892m, above the $850m expected while Net Profit After Tax (NPAT) of $142m was 8% ahead of consensus.
RHC has experienced a tough few years firstly with COVID putting elective surgeries on ice, not good news for private hospitals. Then last year KKR walked away from a $88 bid, while we understand why they walked with the messy ownership in France it does illustrate that the investment manager values the stock significantly higher i.e. if it was prepared to pay $88 it saw a value closer to $100 after it weaved its magic.
