Reporting Season Final Week
The last reporting week once again proved a hiding ground for companies reporting some poor results. Serial disappointer QBE once again delivered a poor result after an annus horribilis, cutting its final dividend to 4 cents from 33 cents a year ago. QBE management is moving to simplify the business starting with the sale of its Latin America unit, though there is still plenty of work to do for the new CEO (was the CFO). While QBE benefits fron rising interest rates, the question remains whether there are more changes/write offs to come. Harvey Norman confirmed retail goods sellers continue to do it tough, and some market darling growth stocks like Bega and Hub24 also failed to impress investors.
Thematically Service stocks had earnings downgrades post results while Miner and Mining services continue to see earnings strength and intrinsic value upgrades. However, buyer beware the late reporting technology stock (GTN, Superloop) that were punished for poor results. .
Overall the earnings results revealed revenue growth exceeding cost growth (with mining stocks the exception) which points to broad based performance against an improving macro backdrop. Stocks with more exposure to global markets have provided the most consistent earnings growth.
|Sector||Name||Code||Pre-reporting Rating||Post-reporting Rating||Intrinsic Valuaiton Change|
|Financial Services||QBE Insurance Group||QBE||A2||B4||6%|
|Food||Costa Group Holdings||CGC||B2||No Change||12%|
|Healtcare||Ramsay Health Care||RHC||B2||No Change||1%|
|Japara Healthcare||JHC||C5||No Change||0%|
|Building Materials||Adelaide Brighton||ABC||B3||B2||-4%|
|Mining/Services||Iluka Resources||ILU||C3||No Change||27%|
|Emeco Holdings||EHL||C2||No Change||100%|
|Real Estate||Viva Energy Reit||VVR||C4||B3||1%|
|Retail||Harvey Norman Holdings||HVN||A2||A3||-7%|
|Accent Group Ltd||AX1||A3||A4||8%|
|Ardent Leisure Group||AAD||B4||B3||-5%|
|Virgin Australia Holdings||VAH||C4||C3||0%|
|Clean TeQ Holdings||CLQ||A3||A4||0%|
|Casinos & Gaming||Ainsworth Game Technology||AGI||B3||No Change||-9%|
|Vista Group International||VGL||A3||No Change||82%|
|Utilities||Spark Infrastructure Group||SKI||C4||No Change||8%|
|Macquarie Atlas Roads||MQA||A2||A3||-16%|