Viewpoint: Bullish
RDY -0.62%: FY22 results this morning and we had the CEO & CFO in for lunch today. Revenue and underlying EBITDA was ~4% ahead of company guidance while they talked to strong momentum coming out of FY22 into FY23. The key highlight was the FY23 revenue guide that implies mid-teens growth again (off a growing base) and an increase in their FY26 revenue target to over $160m. While we don’t own RDY (yet) this is at the top of our Market Matters Hitlist for our Emerging Companies Portfolio.
With a market capitalization of US$382bn, Walmart has a huge operation with exposure to a broad cross-section of America, its customer base looks very much like the US population. They reported quarterly earnings overnight that were better than expected and the stock rallied, but more importantly, it is another piece of evidence that suggests things are improving in the US, and this has positive ramifications for Australia.
The online beauty products retailer rallied yesterday and shares are now more than double the June lows despite CEO Tennealle O’Shannessy announcing her resignation last week (moving to IDP Education). The stock added to the rally yesterday, jumping 30% on the back of a strong result from eCommerce peer Temple & Webster (TPW). While not playing…
BHP +4.09%: A strong result today from BHP for FY22, in fact, it was the 2nd best ever with a beat on earnings and dividend. Their operational performance was first class, particularly around cost control given they didn’t have the same commodity price tailwind as they did in FY21 with Copper & Iron Ore both lower. While the numbers were fairly complex given the…
CAR +5.77%: a strong end to the year for the auto online classifieds business, buoyed by the tailwind of a tight supply of new cars. Revenue of $509m was above guidance, slightly ahead of consensus while net profit after tax (NPAT) was at the low end of the range at $161m, though still up 23% for the year. Their buying service, Carsales Select, how shown strong…
Overnight, The Trade Desk (TTD US) released a Q2 trading update after market that was stronger than expected on most metrics, while there was also some concern in the market leading into this update about the health of the broader online advertising space.
One obvious characteristic of BHP’s tilt towards OZL was their understanding of OZ Minerals asset base and how complimentary it is to BHPs existing assets. There are very few hard rock Lithium companies producing and selling Lithium globally, and PLS is certainly one of those with a very good ‘de-risked’ operation.
The $A has struggled against the $US since early 2021 but everything’s relative in currency land as can be seen with its performance against the Japanese Yen. Prime Minister Fumio Kishida has inherited an economy struggling to generate any inflation leaving ultra-low interest rates i.e. short-term rates are at -0.1% while the BOJ has pledged to guide the 10-year yield at 0% i.e. free money for a decade, yes, please!
This morning, OZL rejected an unsolicited, conditional and non-binding indicative takeover proposal of $25.00 per share in cash from BHP. The board unanimously determined that the indicative proposal significantly undervalues OZ Minerals and, as such, is not in the best interests of shareholders.
The price represents a 32% premium to the last close for OZL but only a 13% premium to the 6-month volume weighted average price. Based on a 30% premium to NPV for OZL, which is a typical sort of resource premium for a change of control transaction, OZL is worth ~$30 per share.
PNI +12.21%:Released FY22 earnings today were a whisker below consensus expectations at the profit line, printing $76.4m versus $77.4m expected while the 17.5c dividend was a touch above. They talked to a strong 1H in terms of flows and a weak 2H which is understandable, with Funds Under Management (FUM) down overall for the year, the first time since…
