Yovich & Co. Market Update - 14 July 2020

Jul 14, 2020 | Commentary

14 July 2020

New Zealand Equities

Market update 2020-07-14

In summary, last week the NZ50G saw 24 companies on the downside, 6 remained unchanged and 20 on the upside. The latest Global Dairy Trade auction (GDT) was up 8.3%, the biggest lift since November 2016, and the fourth consecutive gain at the twice-monthly auction, the result surprising most analysts. Whole milk powder (WMP) lead the way up 14%, skim milk powder up (SMP) 3.5%, and butter up 3%. Average price per metric ton (MT) increased to US$3,197 with 25,688 (MT) having been traded. ANZ’s NZ Truckometer, light and heavy traffic index for June, lifted 28% and 14.5% respectively and is almost back to levels of a year ago. Light traffic during the weekend compared to last year is down 2.2% despite calls to embark on domestic tourist adventures. Retail card spending using electronic cards for June 2020 quarter was $18b down $4.5b (20%) on June 2019 quarter.  Consumables was the only retail industry that didn’t experience a fall during the quarter, up 11% ($651m) from the June 2019 quarter. As investors try to navigate the post COVID-19 world, Yovich & Co are advising clients that if their goals and time frames have not changed, to then stay the investment course. If at all concerned please contact your adviser.

Biggest movers 2020-07-14

Investment News

Arvida

Operates 32 retirement villages making it one of the largest operators of retirement villages in NZ. In Arvida’s sales update for first quarter 2021, Arvida CEO Bill McDonald said, “this was a good result in a period where sales and settlement activity was significantly disrupted. Early signs are showing a resumption of sales activity with good levels of demand and increasing enquiry since the easing of Covid-19 restrictions.” Pricing achieved for resales settled in the quarter ended 30 June 2020 was on average 3% ahead of unit values assumed by the independent valuers as at 31 March 2020. Current Share Price: $1.48, Price/NTA: 1.17, EPS: $0.084, PE ratio: 17.66, Gross dividend yield:  4.12%, Target Price: $1.59, Rating: Outperform.

Summerset 1Q meterics 2020-07-14

Pushpay Holdings

The Hulijich family have sold down 14.4m shares a 5.4% stake at a floor price of NZ$8.40. The sale will reduce the family’s holding to 15.7%. Pushpay’s shares are at time of writing trading at a 8.23% discount to yesterdays close price of $9.24. First half results are due out in November 2020. Current Share Price: $8.48, EPS: $0.096, PE ratio: 87.37. 

Summerset

Announced its underlying profit for the 1H2020 ending 30 June is forecasted to be between NZ$40m and NZ$45m, between 6% and 16% lower than 1H2019. Summerset is on track to reach its revised year end build target of 300-350 new retirement units, down from 400 before the pandemic. First half year new builds were 139. (The directors provide an underlying profit measure to assist investors in determining the realised and non-realised components of fair value movement of investment property and tax expense in the Group’s income statement). Current Share Price: $7.20, EPS: $0.77, PE ratio: 9.29, Gross dividend yield: 1.96%, Target Price: $7.68, Rating: Neutral.

 Arvida 1Q metrics 2020-07-14

Pay Sauce

Finishes the first quarter of FY21 with continued strong growth. Relative to the first quarter of FY20, total recurring revenue grew 54% to $449,000. The number of employees in NZ being paid through PaySauce payroll software increased by 42% to 13,952 people, and the total number of employers processing pays through PaySauce increased by 41% to 2,824. Current Share Price: $0.48.

 

Jarden’s research regarding the Gentailers forecasted share price and dividends.

Jardens - Gentailers 2020-07-14

Yovich & Co’s preferred Gentailer is Contact Energy. At current prices Contact is providing a forecasted dividend yield of 6.83%. Contact Energy is the second biggest generator and retailer at 24% and 21% respectively.

Contact: Current Share Price: $5.67, Price/NTA: 1.82, EPS: $0.18, PE ratio: 31.71, Gross dividend yield: 6.83%, Target Price: $7.34, Rating: Outperform.

 

 

Disclaimer: This publication has been prepared for your general information. While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken for any errors or omissions. This publication does not constitute financial or insurance product advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. No part of this publication may be reproduced without prior written permission from our company. Disclosure statements relating to the financial advisers associated with this newsletter are available on request and free of charge.

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Nathanael McDonald



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