RESEARCH & MARKET COMMENTARY

REPORTING SEASON ROUND-UP.

To keep you up to date, our research team will summarise and analyse key company reports as they are released.

Please find below:
> One page snapshot reports
> Video reviews
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CodeNameDateSummary ReportVideo
NVTNavitas Limited03 FebDownload
EGPEcho Entertainment Group 04 FebDownload
TAHTabcorp Holdings05 FebDownload
REAREA Group05 FebDownload
DOWDowner Edi Limited 05 FebDownload
ANNAnsell Limited 09 FebDownload
COHCochlear Limited 10 FebDownload
SCPShopping Centres Australasia Property Group10 FebDownload
GFFGoodman Fielder Limited11 FebDownload
SGPStockland 11 FebDownload
CSLCSL Limited 11 FebDownload
BLDBoral Limited11 FebDownload
CBACommonwealth Bank of Australia11 FebDownload
LEILeighton Holdings11 FebDownload
TLSTelstra Corporation12 FebDownload
TCLTransurban Group12 FebDownload
GMGGoodman Group 12 FebDownload
MGRMirvac Group12 FebDownload
ASXASX12 FebDownload
SGMSims Metal Management13 FebDownload
NCMNewcrest Mining13 FebDownload
AZJAurizon Holdings Limited 16 FebDownload
BENBendigo and Adelaide Bank Limited16 FebDownload
AMCAmcor Limited17 FebDownload
SEKSeek Limited17 FebDownload
CCLCoca-Cola Amatil Limited17 FebDownload
CGFChallenger Limited17 FebDownload
ILUIluka Resources Limited17 FebDownload
FMGFortescue Metals Group Limited17 FebDownload
AIOAsciano Limited17 FebDownload
SHLSonic Healthcare Limited17 FebDownload
PRYPrimary Healthcare Limited 18 FebDownload
TOLToll Holdings Limited 18 FebDownload
IGAInsurance Australia Group Limited 18 FebDownload
WPLWoodside Petroleum Limited 18 FebDownload
DXSDexus Property Group18 FebDownload
CRZCarsales.com Limited18 FebDownload
ORGOrigin Energy Limited19 FebDownload
FXJFairfax Media Limited19 FebDownload
AMPAMP Limited19 FebDownload
WESWesfarmers Limited19 FebDownload
TTSTatts Group Limited19 FebDownload
FDCFederation Centres Limited19 FebDownload
CWNCrown Resorts Limited19 FebDownload
SWMSeven West Media Limited18 FebDownload
MPLMedibank Private Limited 20 FebDownload
STOSantos Limited20 FebDownload
GPTGPT Group Limited23 FebDownload
BXBBrambles Limited23 FebDownload
CTXCaltex Australia Limited23 FebDownload
LLCLend LeaseGroup Limited23 FebDownload
BPTBeach Energy Limited23 FebDownload
QBEQBE Insurance Group Limited24 FebDownload
OSHOil Search Limited24 FebDownload
FLTFlight Centre Travel Group Limited 24 FebDownload
BHPBHP Billiton Limited24 FebDownload
APAAPA Group Limited25 FebDownload
WORWorley Parsons Limited25 FebDownload
AWEAwe Limited25 FebDownload
SVWSeven Group Limited25 FebDownload
PPTPerpetual Limited26 FebDownload
IFLIOOF Holdings Limited26 FebDownload
ABCAdelaide Brighton Limited26 FebDownload
RHCRamsay Healthcare Limited26 FebDownload
QANQantas Airways Limited 26 FebDownload
NECNine Entertainment Co. Holdings Limited26 FebDownload
TWETreasury Wine Estates Limited27 FebDownload
WOWWoolworths Limited27 FebDownload
HVNHarvey Norman Holdings Ltd27 FebDownload
Fixed Interest Weekly - Exchange Traded Corporate Bonds - pending ASX listing 

NAB Capital Notes upscaled to $1.25bn

The completion of the NAB Capital Notes (NABPC) bookbuild has seen the issue upscaled from $750m to at least $1,250m.  The margin was set at 3.50% above 90BBSW, at the bottom end of the 3.50-3.70% bookbuild range.  NABPC follows on from the ANZ Capital Notes 3 (ANZPF) which allocated $850m at the completion of its bookbuild, at a margin of 3.60% above 180BBSW.

The ASX listing of ANZPF is scheduled for 6 March 2015, with NABPC listing on 23 March 2015. Given the absorption of new supply has been a major factor to the trading margins on major bank prefs remaining elevated over the past six months, we see the potential for some recovery once this $2.1bn of new supply is fully digested.

View the full report here.

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Charlie Aitken: Today I am recommending “taking trading profits” in QAN . 

From a low point of 95c back in December 2013 QAN shares have gained +200%. Airlines are trading stocks: always have been, always will be. They are not long-term investment grade in my opinion due to the fact they control very few of the variables in their business.

Pretty much everything went right for us in this QAN "trading idea". The Oil price collapsed, the AUD collapsed, the domestic capacity war ended and QAN's earnings recovered as confirmed in yesterday's interim earnings result. The QAN share price has tracked the FY15 consensus EPS revisions. That drove a +200% share price appreciation and that's enough for me.

Despite QAN management doing an excellent job, I suspect the next +20% gain in the QAN share price will be much harder and slower than the last +200%, and that is why I am recommending taking trading profits today.

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Fixed Interest Weekly  

Our Fixed Interest Weekly Trading Idea: Buy NABPC

NABPC's bookbuild range appears attractive on account of:

An historically high margin of 3.50% for a security with a 5 year call date paying quarterly income. Impact of RBA Feb 2015 rate cut.  The 0.25% cut in the cash rate to 2.25% has seen NAB reduce its deposit rates, with 1 year term deposits falling 0.40% to 2.70%.  Investors willing to accept the incremental risks moving from a Government guaranteed deposit can still achieve grossed up yields in the "high 5s" (~5.85%). Sentiment shift as investors chase yield. No further hybrid issuance likely from NAB, ANZ and CBA in 2015.

NABPC bookbuild bids due 4pm Monday 23 February 2015

Click here for the full report.

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Fixed Interest Weekly 

Our Fixed Interest Weekly Trading Idea: Buy ORGHA

On a risk / reward basis, ORGHA is another security worthy of consideration, forinvestors seeking a yield of ~6.00%. The trading margin on ORGHA has increasedfrom 2.51% at $101.45 on 24 Nov 2014 to 3.79% at $101.45. The yield uplift requiresinvestor comfort around the incremental risks involved in investing in subordinated debtof Origin Energy, which is an ASX top 20 company.

Click here for the full report.

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AVJennings (AVJ): Good result, better outlook  

Click here to read our report.

Strong start to the year: AVJ reported a +95% uplift in underlying NPAT to $9.3m (BPe $5.6m) and its first interim dividend ($0.01ps fully franked) since 2012. Lot settlements were up +22% YOY and +10% ahead of expectations and this was the main driver of the beat. Lots under development, a key lead indicator of future sales, continued to expand up +22% HOH and +58% YOY and are now at levels almost five times the 2H12 low. We retain our Buy rating with a target price of $0.82ps.

Near term drivers remain sound: Near term demand remains robust with lots under development up +22% HOH (to 1,539) and FY15e contract signings guidance raised from 1,500-1,700 to 1,700-1,900. 1H15 gross margins were strong and impaired inventory continues to exit the system (provisions down 45% since FY13) through a combination of sales and provision releases ($9m in the last 2 years), which should assist margins in FY16-17e.

Changes to forecasts: Following the result we have raised our FY15e NPAT forecast by +19.8%, reflecting an uplift in lot settlements (+100) and development gross margins (+300bp) offset in part by lower price points. The latter two principally reflect changes in mix to land only sales. Changes in FY16-17e NPAT are more modest at +4.3% in FY16e and +3.8% in FY17e. Our target price remains broadly unchanged at $0.82ps with this principally derived from NTA, net working capital and FY16e ROIC methodologies.

Investment view: Buy retained: AVJ enters FY15e with its highest level of lots under development in seven years with the tailwind of a buoyant housing market. Despite this, AVJ continues to trade at an 22% discount to its net working capital backing and a 23% discount to NTA. With a 7 year tail in the development book (based on 1H15 settlements), undemanding valuation metrics and seven year high in projects under development, we retain our Buy rating with our target price unchanged at $0.82ps..

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Fixed Interest Weekly 

Our fixed interest weekly trading idea: Buy major bank prefs and capital notes with ~6% yields

On a risk / reward basis, the major bank prefs still provide attractive grossed up yields ~6.00%. In a low interest rate environment, the incremental risks in moving from Government guaranteed term deposits at ~3.00% to major bank prefs yielding ~6.00%(4.20% fully franked) is worthy of consideration for investors seeking an uplift in yield.

Click here for the full report.

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BHP: An attractive divdend yield play. 

BHP: An attractive divdend yield play.

Watch our latest video by Peter Quinton on BHP. "To put it into very simple terms, in fiscal 2016, the fully franked dividend yield to BHP shareholders is going to be around 6.6% fully franked

BHP_(2)_First_Frame

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