2 ASX Listed Stocks Under Watch Zone - CSL, SWM

If you want to invest in the stocks, you must be aware of the positive and negative aspects of investment. Investing throughout multiple asset classes, sectors, and locations aid the investor to handle his/her risks efficiently. It also aids in narrowing down an array of results amid anticipated and best return. Further, it would aid in cutting down the dependency on just one investment.

Why Diversified stocks?

Diversification is a risk managing method that combines a wide variety of investments within a portfolio. It helps to reduce the risk taken by an investor with the distribution of the capital into various sectors. Sometimes, investment does accomplish what the investor has been expecting from it; however, there are times, when an investment does not give the return as per the anticipation.

Diversification of the stocks assist the investor to not count on a sole source of income, thus producing more returns from the other investments. It aids the investor to attain a positive return on his/her investment in the scenario, when one investment is giving a negative return, but the other investments might provide positive returns. Also, some investors conserve money for additional investment, and diversification of the stocks assist them to keep the capital to solve the purpose.

In this article, we would be discussing CSL from the Health Care sector and SWM from Communication services sector as follows:

CSL Limited (ASX: CSL)

Formed in 1916, CSL Limited (ASX: CSL) is into manufacturing, research and development of the products across regions like Switzerland, United States, Australia, and other countries. CSL’s businesses comprise of CSL Behring, CSL Plasma and Seqirus.

CSL’s AGM results

On 16 October 2019, CSL released the outcome of the business that was conducted at the Annual General Meeting. As per the poll report, the total votes casted to re-elect Ms Marie McDonald as a Director were 272,563,403. Further, in order to re-elect Dr Megan Clark AC as a Director, the total number of votes casted were 272,563,183.

Further, CSL updated the market with CSL’s Chairman, Brian McNamee speech, wherein he mentioned that the company’s solid performance last year, reflected its goal towards the people all over the world. CSL has an aim protect public health and patients suffering from various ailments. He added that the company directly deals with the government and via active membership in industry. It offers its share of contribution to public policy by getting involved with establishments concerning patients and so forth.

Change in Director’s Interest

On 4 October 2019, the company notified the market with regards to a change in the director- Paul Perreault’s interest in the entity. Post the change in interest of the director effective 3 October 2019, wherein the director disposed 650 ordinary shares. As per the release, he now has 127,381 ordinary shares. The value of the transferred ordinary shares was $148,869.50 (being 650 ordinary shares at a price of $229.03 being the closing price on date of transfer).

Revenue increased by 11 per cent in FY 2019

On 14 August 2019, the company announced the annual result for FY 2019, for the duration ended 30 June 2019, and below are a few pointers of the report:

• CSL’s total revenue soared by 11 %, standing at US$8,539 million versus pcp or previous corresponding year.
• CSL has declared a dividend/distribution of US$1.45, with regards to the six months timeframe closed 30 June this year. The dividend amount was paid on 11 October this year.
• During the period, the company was consistent with solid growth rate in its albumin and immunoglobulin therapies.
• NPAT or Net profit after tax grew by 17% and was recorded at US$1,919 million from pcp.
• EBIT rose by 8 per cent to US$2504 million.
• The company’s cashflow from operations stood at US$1,644 million.
• Also, thirty new centres with plasma collection centres in the US region came up.

Source: Company’s Report

Outlook

The company expects FY20 NPAT to range between US$2,050 – US$ 2,110 million at the rate CC or constant currency, which would be a growth of ~ 7 per cent – 10 per cent over FY19 period. The company’s Sequirus business would deliver in accordance with previous guidance, deriving benefit from process improvement and product differentiation.

Stock Performance

The stock of CSL last traded at $253.000 on ASX on 16 October 2019, moving up by 1.856 percent from its previous closing price. CSL stock’s market cap stood at $112.73 billion and ~453.86 million outstanding shares. The 52-week high and low value of the stock has been noted at $253.83 and $173.00, respectively. The stock has generated a positive return of 22.88 per cent in the last six months and a positive return of 31.91 per cent on a year-to-date basis.

Seven West Media Limited (ASX:SWM)

SWM is a diversified media company and has a prominent presence in broadcast television, along with print mediums like magazine and newspaper. SWM was officially listed on Australian Securities Exchange in 1992.

Recently, the company has notified the date for Annual General Meeting to be held on 13 November 2019.

Response to ASX query

On 14 October 2019, the company provided its response to the query raised by the ASX, which came up amid media speculation with respect to its magazine stakes. SWM mentioned that no binding agreement had been concluded and would be subject to regulatory approval and obtaining further consents on it.

Retirements

On 10 October 2019, the company released a notice for the retirement of Mr Peter Gammell and The Hon. Jeff Kennett AC who would be retiring from the Board at the end of this year’s AGM, to be held on 13 November 2019.

Mr Gammell has been a Director of the company since September 2008 and has been a long-term member of the Audit & Risk Committee. Mr Kenneth has been the director of the company since June 2015 and has made significant contribution to the company’s tremendous achievement.

Quarterly Rebalance of S&P/ASX Indices

On 6 September 2019, the company updated that S&P Dow Jones indices has removed the company was removed from S&P/ASX All Australian 200, effective from 23 September this year.

Revenue and other income decreased by 4 percent for the period ending 29 June 2019

On 20 August 2019, the company notified on the financial results and below are the highlights of the results;

• The company’s revenue and other income decreased by 4.0 per cent to $1,556.5 million compared to the previous year corresponding period.
• Loss before tax of the company stood at $433.6 million.
• Underlying net profit after tax (excluding significant items) has been decreased by 7.9 per cent to $129.3 million.

Attained Milestones

• SWM’s revenue share increased to 38.8 per cent in FY 2019.
• The company’s sports portfolio outperformed with AFL audiences, which grew by 10 per cent.
• Seven Studios’ EBIT grew by 5.3 per cent to $59.1 million.
• New & lifestyle media segment’s total revenue stood at $315.2 million.

Outlook

• In FY20 period, the company expects the Group’s EBIT to remain from $190-$200 million and BVOD market to grow by more than 25 per cent.
• SWM further anticipates delivering eighth consecutive year of EBIT Growth.
• It would focus on improving the balance sheet and make an effort to reduce debt.
• The company expects Metro TV advertising market to decline by single digits.

Stock Performance

The stock of SWM last traded on 16 October 2019 at a price of $0.37, slipping by 1.333 per cent from its previous closing price. The company has a market cap of $565.51 million with ~1.51 billion outstanding shares. The 52-week high and low value of the stock is at $0.927 and $0.350, respectively. The stock has generated a negative return of 26.47 per cent in the last six months period. However, in the last five days it has given 1.35 percent return.

Disclaimer

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