3 Underperforming Stocks - BOQ, DMP And ALL

  • Jan 10, 2019 AEDT
  • Team Kalkine
3 Underperforming Stocks - BOQ, DMP And ALL

Bank of Queensland Limited (ASX: BOQ)

The shares of Bank of Queensland, Australia’s one of the leading retail banks, ended the trading session in green on 10 January 2019. The shares closed at A$10.240, up by 0.59% as compared to the previous close of A$10.180. The company’s stock has offered a negative return of 3.96% in the last six months. However, the shares have soared by 7.95% over last month.

The bank declared cash earnings after tax of $372 million for FY18, representing a decline of 2% from FY17. Statutory Net Profit After Tax for the year declined by 5% at $336 million. The final dividend payout stood at 38 cents per share resulting in a full-year dividend of 76 cents per share. The group maintained a strong balance sheet as reflected in $1.5 billion lending growth, contributed by commercial lending segment and housing loan growth in Virgin Money Australia and BOQ Specialist. Net Interest Margin increased by 5bps from FY17 at 1.98%. The bank offered a new web experience platform to the clients and began work to facilitate participation in the New Payments Platform. Impaired assets were down by 15% to $164 million and loan impairment expense also declined by 15% to $41 million.

The bank anticipates some pressure on earnings growth by regulatory changes, slowing credit growth and higher funding costs. In a challenging future, the fundamentals with prevailing low levels of stock should still support the bank and investors may have a balanced approach from equity investment standpoint.

Domino’s Pizza Enterprises Limited (ASX: DMP)

The shares of Australia’s largest pizza chain, Domino’s Pizza Enterprises Limited ended the day’s session in red today. The share price was smashed by 1.8%, closing at A$41.22 as compared to the previous close of A$41.97. With Earnings per share of A$ 1.394, the Price Earnings ratio stand at 30.11x.

As per the group’s financial statements for the year ending 1 July 2018, 18.1% growth of statutory Net Profit After Tax at $121.5 million was declared. The improvement was driven by a 4.5% increase in Same Store Sales (SSS) in Australia and New Zealand, 5.7% in Europe and 0.9% in Japan. The group reported 145 news stores addition, 163 stores from the acquisition of Hallo Pizza in Europe (January 2018) but 50 store closures including 36 Hallo Pizza conflict stores. ANZ EBITDA increased by 12% at $127.5 million, Europe EBITDA increased by 80% with Japan EBITDA decreasing by 8%. On the balance sheet front, the group recorded $1.3 million Net Assets higher than the previous year’s $1.1 million. Total Liabilities decreased from $514k in FY17 to $307.7k in FY18.

DMP stock reflects a performance change of 1602% since its inception. However, the last three months saw Domino’s share falling by around 16%.

This fast food stock now seems to be trading at low levels, but the growth prospects are yet to be ascertained in order to say that the group can witness upside momentum going forward. This stock would be an interesting one to watch.

Aristocrat Leisure Limited (ASX: ALL)

Aristocrat Leisure is into the business of developing gambling machines and cabinets. The company’s portfolio also includes Global Class III, Class II and digital games. With the close of the trading session today, the company’s stock price stands at A$23.090, down by 0.73% as compared to the previous close of A$23.260. With Earnings per share of A$ 0.850, the shares are trading at Earnings Multiple of 27.360. The share price has soared by 6.15% over last month, despite offering a negative return of 25.62% over the previous six months.

The gaming company declared a strong performance for the fiscal year 2018 with a 48% increase in annual revenue to over A$3.6 billion. The organic growth is attributable to expansions in Australian and American market and reliable results of recently acquired Plarium Global and Big Fish Games. The group declared a Net Profit after Tax of $542.6 million in FY18 as compared to $495.1 million in FY17.

Mid of last year, ALL was up to a level of $ 32.9 but has been down since then and looks at a low point considering the series of events. Investors thus, have this stock under their radar.


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