AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Stock markets across the globe have been tumbling as the pandemic fear persists among the investors. Due to the escalating number of coronavirus cases, market volatility is most likely to remain uncertain. Besides, the oil price war between Russia and Saudi Arabia has affected the currency market and commodities, worsening market sentiments.
Australia, just like the rest of the world, has had to face the music and is facing recessionary fears. Amid the current situation where the financial markets are reeling under the pressure of oil price war and coronavirus pandemic, some stocks have performed well so far in 2020 and have been the outliers on the index. Stocks that have a relatively lower impact from these threats include customer discretionary, consumer staples, and healthcare among a few others. On the other hand, hotel, travel, tourism, airports, airlines, airport, and education are some of the industries adversely affected by the prevailing situation.
Let’s have a look at five stocks from varied sectors that have maintained a positive year-to-date (YTD) returns (as on 18 March 2020), and their business operations & key updates.
NEXTDC Limited (ASX:NXT)
ASX-listed NEXTDC Limited is a Data Centre-as-a-Service provider. The Company has nine data centres across five cities.
NXT ‘ stock has performed reasonably well this year and has delivered a positive return of 15.32 per cent in the last six months and 9.49 per cent on YTD basis (as on 18 March 2020). On 05 March 2020, the stock had attained its highest price of $8.65 since its inception of trading on ASX.
New Contracted Commitments at Victoria and Outlook FY 2020:
On 04 March 2020, the Company notified the market about the development of its operations at Victorian data centre facilities which was increased from 15 MW (as at 31 December 2019) to nearly 21 MW. NEXTDC also mentioned that after including options for contracted expansion, it would be over 28 MW.
Further, NXT intends to step up the next stage of construction, which would give an incremental capacity of up to 12 MW.
As an outcome of these developments, the Company upgraded its FY 2020 guidance. The capital expenditure for FY 2020 is likely to fall in the range of $320 million to $340 million as compared to the previous range of $280 million to $300 million.
The FY 2020 guidance for other parameters, as mentioned in the first half FY 2020 results for the period ended 31 December 2019, are as follows.
- Revenue to expected in between $200 million and $206 million
- Underlying EBITDA is projected at $100 million to $105 million
The snippet of key performance from 1H20 results which was released on 28 February 2020:
- An upsurge in revenue by 8 per cent on the prior year to $97.7 million.
- Underlying EBITDA grew by 21 per cent on compared to pcp, from $42.2 million to $50.9 million.
- Operating cash flow was $20.1 million, an increase of 34 per cent compared to pcp.
- At 31 December 2019, liquidity entailing cash and undrawn senior debt facilities stood at $497 million.
ResMed Inc (ASX:RMD)
A digital health player, ResMed Inc provides solutions to cure people and enables them to lead a healthier life. The Company had improved the lives of more than 100 million in the year 2019. ResMed has mentioned that it foresees strong growth in coming years.
On 31 January 2020, RMD announced its second-quarter FY 2020 results for the period ended 31 December 2019. There was double-digit growth in top line and bottom line numbers which stood at $736.2 million (+13 per cent) and $160.6 million (+29 per cent), respectively. Other highlights include:
- Net operating profit grew by 26 per cent compared to pcp to $197.8 million and non-GAAP operating profit increased by 21 per cent.
- GAAP and non-GAAP diluted earnings per share were $1.1 and $1.21, respectively.
- RMD paid a dividend of $56.1 million (unfranked).
- Cash flow from operations for the second quarter was $69.9 million, which included legal settlement payments of $40.6 million and tax payments of $111.0 million.
For the six-month period, the revenue and net income of the Company witnessed a double-digit growth of 14 per cent and 22 per cent respectively.
On 18 March 2020, RMD delivered a positive return of 21.19 per cent and 5.45 per cent in the last six months and on YTD basis, respectively.
The a2 Milk Company Limited (ASX:A2M)
Consumer staples player The a2 Milk Company Limited is engaged in the sales of milk-based products containing the A2 protein type.
Agreement with Agrifoods to expand into the Canadian market:
On 12 March 2020, The a2 Milk Company Limited and Agrifoods Cooperative signed an agreement to produce, market, distribute and sell the a2 Milk™ branded liquid milk in the Canadian market. Under the terms of the agreement, Agrifoods will get access to A2M’s marketing assets, proprietary systems, IP and know-how concerning the processing and sourcing of A2M products.
Positive Results for HY20:
On 27 February 2020, the Company announced half-year FY 2020 results for the period ended 31 December 2019. Highlights of the results are as follows:
- Total revenue grew 31.6 per cent on the prior year, to $806.7 million.
- EBITDA was $263.2 million, an increase of 20.5 per cent compared pcp.
- EBITDA to sales margin performed better than expected at 32.6 per cent.
- An upsurge of 21.1 per cent in the bottom line compared to pcp to reach $184.9 million.
- Basic earnings per share were 25.15 cents, an increase of 20.6 per cent pcp.
- Closing cash balance was $618.4 million, and the operating cash flow was $160.6 million.
- Marketing investments worth $84.1 million to target the opportunities in the USA and China.
As on 18 March 2020, stock of A2M has delivered a positive return of 4.05 per cent and 8.06 per cent in the last three month and on YTD basis, respectively.
Coles Group Limited (ASX:COL)
ASX-listed company Coles Group Limited is a consumer Staples retailer with more than 2,500 retail outlets.
COL’s performance on the ASX has been phenomenal, marked by a significant return of 16.51 per cent and 14.65 per cent in the last months and on YTD basis, respectively (as on 18 March 2020).
Recently, Wesfarmers Limited announced that it had signed an underwriting agreement with two lead managers to sell 4.9 per cent of the issued capital of COL. The total pre-tax proceeds were $1,050 million with a price of $16.08 per share.
On 18 February 2020, the Company released its first-half FY 2020 results for the period ended 05 January 2020.
The highlights of the performance are mentioned below:
- Fully franked dividend of 30 cents per share was declared, in line with demerger guidance.
- Sales revenue increased by 3.3 per cent compared to pcp to stand at $18,846 million (the figure excludes fuel sales and hotels).
- Segmental sales revenue was also up with a 3.3 per cent growth in Supermarkets and Liquor segments, and 4.6 per cent growth in the Express segment.
- Earnings before interest and tax increased by 0.4 per cent compared to pcp, partially because of the strong demand in property disposal.
Elders Limited (ASX:ELD)
Elders Limited, founded in 1839, is an agribusiness offering specialised services and products to primary producers in Australia. ELD’s businesses include rural services, real estate, home loans, financial planning, and insurance.
ELD delivered a positive return of 20.32 per cent in the last six months and 26.47 per cent on a YTD basis (as on 18 March 2020).
ELD’s Annual report FY2019 for the period ended 30 September 2019 mentions about the positive outlook for the year ahead. The Company has an aim to maintain its capital management. Elders predicts that considering a 3-year average, the ROC exceeded the set target at 22.8 per cent.
Also, the Company expects a significant contribution from its recent acquisition of AIRR in the coming year.
Recently, the Company had updated the impact of bushfire on its financial and operational activities, highlighting that there was no significant damage to property and all the branches of ELD were operational. The Company had also confirmed that there would not be any impact on 1Q FY2020 trading.
