[
B U S I N E S S
&
F I N A N C E
] THE WEEK THAT WAS
INVESTORS, WATCH THIS SPACE
Anthony Ward is from Ord Minnett in Buderim
R
eporting season has come and gone and analysts are now taking a well-earned breather. We have extracted some of the key themes and present a list of our top picks for the next six months. Industrial companies were mostly upbeat in their outlook statements, indicating that growth was on the cards. However, mining service companies erred on the side of caution in light of the uncertainty around global commodity markets. Internet-related names again reported good results, driven by continued secular trends towards online useage. Travel and entertainment stocks
reported reasonable results. Telcos were another bright spot with continued market share gains and robust underlying demand remaining themes for the strong players. Five stocks that reported encouraging results and are well placed to continue growing into 2013 include Domino’s Pizza (DMP), Reckon Limited (RKN), Magellan Financial (MFG), Slater & Gordon (SGH) and Super Retail Group (SUL). Zeroing in on Domino’s Pizza Enterprises (DMP) we can see very encouraging signs after its recent results. DMP has continued to deliver strong earnings growth with FY12 net profit after tax, growing 25 per cent and net cash doubling to $26.3 million. This has been a result of an extension of its market leadership in Australia and NZ, coupled with long-term upside from its European expansion. This provides confidence that the business will continue to deliver our forecast 17 per cent EPS compound annual growth.
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By way of background, Domino’s holds the master franchise rights for the Domino’s Pizza brand and network in Australia, New Zealand, France, Belgium and the Netherlands, with earnings generated from a combination of store sales, royalties and franchise fees. We rate management highly, with a proven track record of consistently delivering earnings growth above expectations. Directors and senior management own around eight per cent of total shares on issue. The majority of the core management team has been in the business for longer than seven years with the CEO and COO more than 15 years. Overall we believe DMP has the correct mix of management with local European experience and operational Australian and NZ experience to drive the business forward. Anthony Ward is a Representative of Ord Minnett Ltd, AFS licence 237121. This article contains general financial advice only and does not consider your personal circumstances; you should determine its suitability to you. Before acquiring a financial product you should consider the relevant product disclosure statement. Past performance is not a reliable indicator of future performance.
TOP BULLS
PRICE
RISE
Intrepid Mines
$0.515
72%
Fortescue Metals
$3.61
21%
Mirabela Nickel
$0.395
20%
Imdex Limited
$1.715
15%
Kingsgate Consolidated
$6.09
14%
WORST BEARS
PRICE
FALL
Macmahon Holdings
$0.305
42%
Ramelius Resources
$0.425
11%
AWE Limited
$1.40
8%
Senex Energy Limited
$0.68
7%
Southern Cross Media
$1.015
7%
WEEKLY
CHANGE
All Ords
4430
0.5%
Dow Jones
13579
0%
FTSE100
5852
-1.1%
NIKKEI
9110
-0.5%
Hang Seng
20734
0.5%
WORLD INDICES
HOT TIP Buy – Reckon Limited (RKN). Provides business management solutions for accounting and bookkeeping professionals. Growth will come via continued efforts to transition towards hosted and online versions of the Reckon Business, Reckon Personal and APS software in preparation for becoming a fully independent developer. Target price $2.73. Source: Ord Minnett Buderim
M Y W EEK LY PREVIEW.C OM .A U
9/25/2012 12:11:53 PM