2 Stocks Looking Good For Investors – RWC and OZL

  • Oct 16, 2018 AEDT
  • Team Kalkine
2 Stocks Looking Good For Investors – RWC and OZL

The two stocks RWC and OZL, both have given strong operational and financial performance this year. A significant growth in the business of both of these stocks is expected in the upcoming years. Which is why there is a high chance that these stocks may witness a growth in their stock prices as investors may find these stocks attractive.

Reliance Worldwide

Reliance Worldwide (ASX: RWC) is a global market leader and manufacturer of water delivery, control, and optimization systems for the modern built environment. RWC continues to pioneer and innovate plumbing products for residential, commercial and industrial plumbing applications. The acquisition of the John Guest group for $1.2 billion, which was completed in June of 2018, has created RWC a single global leader in the manufacture and distribution of both brass and plastic Push-to-Connect (“PTC”) technology and related products. The company holds number 1 market position in several product categories and is the clear market leader in the US with 80 percent market share (on a volume basis) in the residential PTC fittings category. It has a stable earnings growth profile which is focused on the less cyclical residential R&R sector with operations in North America, Asia-Pacific, and Europe. In FY 2018, the net sales of the company increased by 28 percent to $469.4 million in FY 2018. The growth in sales is a result of continued expansion of the SharkBite PTC business in the Americas, the addition of new multi-functional PTC products, the first full year inclusion of Holdrite, strong external sales growth in the APAC and EMEA segments and the inclusion of one month of John Guest sales. RWC currently expects FY2019 EBITDA to be in the range of $280 million to $290 million, including $10 million of actual synergies expected to be realized in FY2019 and excluding $10 million of one-off integration costs expected to be incurred to achieve the synergies. In the past six months, the share price of the company increased by 8.63 percent as on 15 October 2018 and traded at a PE Level of 38.460x.  RWC’s share traded at $4.830 with a market capitalization of circa $3.74 billion as on 16 October 2018 (AEST 4:00 PM). 

OZ Minerals Limited

OZ Minerals Limited (OZL) is involved in the operations of exploration, production, and smelting of mineral properties. Recently, the company completed the earn-in of 51 percent of the West Musgrave project following an investment of $22 million. The company also announced a second significant intersection of nickel and copper mineralization at the Yappsu Prospect within the West Musgrave Project in Western Australia. The Carrapateena development project of the company is on track for first concentrate production in Q4 2019. Due to high copper prices and disciplined operating performance, OZ minerals achieved Strong financial results in the first half of FY 2018. In the first half of FY 2018, the underlying NPAT of the company increased by 66 percent to $134 million as compared to the half-year results of last year. The underlying EBITDA of the company increased by 33 percent to $290 million. The company also maintained a strong cash balance of $493 million in the first half of FY 2018.  On 16 October 2018, the company announced that it is intending to launch a Share Purchase Plan (“SPP”) to raise A$1.75m and it will allow eligible shareholders to purchase up to A$15,000 worth of fully paid shares in the Company (subject to any scale-back), without incurring brokerage and other transaction costs. In the past three months, the share price of the company decreased by 1.57 percent as on 12 October 2018 and traded at a reasonable PE level of 9.41x. It is believed that certain macroeconomic factors could be behind the recent decrease of OZ Shares. OZL’s shares traded at $8.960 with a market capitalization of circa $2.83 billion as on 16 October 2018 (AEST 4:00 PM).

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