3 High Flying Stocks With Strong YTD Returns – QBE, FMG And WEB

3 High Flying Stocks With Strong YTD Returns - QBE, FMG And WEB

QBE Insurance Group Ltd (ASX: QBE)

QBE Insurance Group Ltd (ASX: QBE) stock has risen 17.59% in the last three months as on March 7, 2019, after the company posted a better than expected results for the FY 18, on the back of higher premiums, and also due to decline in catastrophe claims.

The company for FY 18 had reported the cash profit after tax of $715 million compared to a loss of $262 million in the previous year. For FY 18, the company had posted the combined operating ratio of 95.7%, which is in line with the expected target range of 95.0%-97.0%. This has significantly increased from 103.9% as posted by the company in 2017. The strong Performance during first half FY 19 was driven by higher iron- ore price.

Moreover, for FY 19, QBE projects combined operating ratio to be in the range of 94.5% – 96.5%, and net investment return is expected to be in the range of 3.0% – 3.5%. Meanwhile, QBE stock last traded at the price of level A$12.350 (as at 8 March 2019), down by 1.75% on its previous close.

The stock has offered strong YTD return of 27.61%.

Fortescue Metals Group Limited (ASX: FMG)

Fortescue Metals Group Limited (ASX: FMG) stock surged 6.856% on March 4th, 2019 after some market analysts had upgraded the company’s stock rating as a buy, and raised the price target on the stock to be A$7.30. This is on back of expectations of further rise in ore prices driven by about three-year disrupted Vale’s production.

On the other hand, for the first half of FY 19, the company’s revenue grew 10% higher, than the second half of FY 19 to US$3,540 million, on the back of higher average realized iron ore price to US$47/dmt versus US$40/dmt in 2H18. As a result, in 1H FY 19 the company delivered 24 per cent higher underlying EBITDA margin than 2H18 to US$21/dmt.

As at 31 December 2018, the company had Cash on hand of US$962 million. During the half of FY 19, the company, had increased the Revolving Credit Facility (RCF) by US$500 million to US$1,025 million, and extended it by one year to July 2021. Moreover, for FY 19, FMG projects the shipments to be in the range of 165-173mt and expects the second half shipments, to be more than the first half of FY 19. This is projected comprising of the production from West Pilbara Fines, expected to be of 8-10 million tonnes. Further, the company for the second half anticipates higher volumes which will lead to a lower C1 costs.

Therefore, the full year 2019 costs forecasted to be at the upper end of the range US$12-$13/wmt. For FY 19, the company expects the total capital expenditure to be of US$1.2 billion, and Depreciation and Amortization to be of US$7.10/wmt.

The company will maintain the dividend payout ratio for FY 19 to be in the range 50 to 80 per cent of net profit after tax of FY 19 earnings. As a result, FMG stock has risen 65.00% in the three months as on March 7th, 2019 and traded at a P/E of 16.69x. The stock closed at the price of level A$6.50, down by 1.515% from its prior close on March 8th, 2019.

The stock has provided strong YTD return of 61.82%.

Webjet Limited (ASX: WEB)

Webjet Limited (ASX: WEB) stock has risen 33.91% in the last three months as on March 8th, 2019 after the company, for the first half of FY 19 had reported 33% growth, in the revenue to $175.3 million and 61% rise in the net profit after tax (NPAT) to $38.3 million.

The EBITDA during 1H FY 19 has increased by 42%. This is on back of its largest business unit, WebBeds, whose EBITDA had more than doubled to $30.1 million in 1H19 on a year-on-year basis, from $12.8 million in 1H18. This was majorly due to the strong performance in the key European and Middle East markets, and due to significant EBITDA posted from the Americas. Moreover, for FY 19, the company has reconfirmed the FY19 forecast and expect to post EBITDA of at least $120 million. This is after (excluding the one-off cost related to the acquisition of DOTW).

Meanwhile, the stock of the company last traded at the price of level A$15.290 (as on 8 March 2019), down by 0.972% from its previous close. The stock has provided a strong YTD return of 45.80%.


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