Fat Prophets > Australasian Equities
October 27, 2020 •

Building profits Shares of James Hardie Industries have continued to advance year-to-date, extending the strong rebound after last March’s pandemic induced sell off and hitting fresh new highs. We view the rise as justified as the core US housing market continues to look robust and James Hardie has continued to pick up market share, with more likely to come. Under CEO Jack Truong, the operational and financial performance has continued to impress, with cost-out manufacturing initiatives combined with strong sales…

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Speculative
high

3Q21; gold production off for the quarter Evolution Mining has released its March quarter 2021 activities update, revealing a weak operational performance for the quarter. Evolution reported lower headline gold production for the quarter, but silver and copper production rose. Operating costs came in on the high side for the March quarter. A fall in the gold price delivered lower cash flow numbers, but the balance sheet remained in good shape. Production guidance for 2021 remained unchanged, while Evolution expects…

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Speculative
high

On track to hit the top end of 2021 guidance Sandfire Resources has released its third quarter operational results, reporting a fall in its headline production numbers for the quarter and a rise in costs. Production guidance for 2021 was maintained, with Sandfire’s expectation of reporting toward the top-end of the range and it did provide an upgrade on cost guidance numbers for 2021. A snapshot of the balance sheet revealed no debt and a swag of cash. The following…

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Core
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A good package for the times Amcor, the world’s biggest consumer packaging firm, recently reported solid numbers for its nine months update, surprising to the upside and lifting its EPS guidance range for the fiscal year. Amcor also increased its quarterly dividend a tad compared to a year ago and we like its considerable pricing power, with company generally able to pass on raw material cost increases to customers with only a modest delay. We believe this position it well…

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Speculative
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1Q21; six now under one roof Northern Star has reported its activities for the March 2021 quarter, and in doing so has brought together six operating mines, with Thunderbox, Carosue Dam and the Super Pit joining its stable of four mines. Northern Star has indicated that it remains on track to hit 2021 guidance. Gold production for the March 2021 quarter came in at 366,000 ounces, with the following chart showing quarterly gold production: Source: Northern Star Due to the…

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Recovery firmly underway  ANZ shares have staged a strong recovery since March 2020 lows and have continued to advance year-to-date. The solid rally continues to be justified in our view given the positive economic momentum of the economic recovery in Australia and the strength of the housing market. ANZ, like the other banks is benefiting from much ‘better than feared’ outcomes and made a substantial net provisions release in the first half ended March 2021. We expect there to be…

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Twenty years in the making Global equities mostly advanced further in the first quarter of 2021, marking the fourth straight quarter. The gains came on the back an accelerating vaccine rollout, a strong outlook for a global economic rebound this year and continued accommodative measures from governments and central banks. Most of the pain was felt in the bond market, with yields rising on the rapid vaccine rollout in the US and UK and expectations of further US stimulus, which…

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Core
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Raising the stakes Another week, another upwardly revised takeover bid for Mainstream. A week after global fund administrator Apex lifted its bid to $2.55 a share in cash, previous bidder SS&C Technologies exercised its matching right, and increased its offer, albeit very slightly, to $2.56 a share. The dust had barely settled on the latest revised bid when Apex came straight back, offering $2.60 per share. Management at Mainstream have confirmed Apex as providing the superior proposal, and it is…

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Core
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A bumper start Agribusiness, Elders (ASX.ELD) has seen its shares continue to climb and virtually deflecting the headwinds caused by COVID-19. The fact that people still need to eat despite being holed up in their homes due to the pandemic has been a boon for Elders along with its peers but improving weather conditions and a bumper season gave the sector a solid boost. Today, we take a look at the latest round of results and update our view. What’s…

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Core
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Another Record Set! Financial services platform, HUB24 (ASX.HUB) has done it again having broke another record with the latest quarter report highlighting an impressive run with Funds Under Administration making a massive year-on-year surge. Today, we take a look at how it has tracked since the last quarterly update as well as some key business deals. What’s new? At the end of March (FAT-AUS-1014), we covered some concerning developments for HUB24 as one of its rivals, Netwealth (and biggest listed player in…

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Fed up with the lockdown With much of the world still in varying stages of their lockdowns, ‘stay at home’ stocks continue to do well. This includes many of the well branded ‘quick service restaurant’ operators, who are enjoying strong take-away and delivery demand as many people literally get ‘fed up’ with cooking. This has also provided a strong earnings offset in most cases to dine-in operations which largely remain shuttered. This has certainly remained the case for our two…

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In the nick of time Nickel has not been spared from the ravages of the COVID-19 pandemic. The measures taken globally by governments to combat the spread of the virus were blunt; halt person to person contact. Populations went into “lockdowns” as 2020 rolled out and economic activity went into a nose-dive. The following chart shows real global Gross Domestic Product (GPD) growth highlighted is the Global Financial Crisis: Source: International Monetary Fund [emaillocker] As Members can see from the…

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Speculative
high

An early peek St Barbara has released an early update on its June quarter and 2020 full year operational results. The announcement revealed a rise in June quarter and 2020 gold production that came within guidance for the year, but toward the bottom end of the range. On the individual mine performances against 2020 guidance, one came in ahead, one within and one below. While a glimpse of the balance sheet to end June 2020 shows that it remains in…

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Core
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2Q20; iron ore to the fore Rio Tinto has reported its operational results for the second quarter to 30 June, and despite what has been a challenging, COVID-19 driven global environment, we consider the overall result as reasonable Rio Tinto’s key operational segment in iron ore was the standout for the quarter, as was bauxite and mid-stream alumina. Copper and aluminium were again thorns for the quarter, on lower production numbers, with a majority of Rio Tinto’s minor product offerings…

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A fist full of dollars Since our March look at the iron ore market, the price has marched onward and is now trading around US$111 a tonne and up from the US$90 a tonne at the time of our last review. Over the past 12-months, iron ore has endured a US/China trade war and the ravages of COVID-19, with its beginnings in China, on the global economy and populace. We wrote at the time that “the iron ore price appears…

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Gold hits a new record It was only a month ago that we upgraded our end of year price target for gold to a price range of US$1,925 to US$2,000 an ounce from our previous target range of US$1,625 to US$1,675 an ounce. The gold price at the time of writing in June was trading around US$1,780 an ounce. The gold price in recent trading hit a new record at circa US$1,970 an ounce to compress six months of price…

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