Aussie Companies With Global Ambition – RMD, ALL And JHX

  • May 11, 2019 AEST
  • Team Kalkine
Aussie Companies With Global Ambition – RMD, ALL And JHX

Many Australian companies have expanded their footprints in the global markets either organically or via joint ventures. Investors who wish to either diversify their portfolios or are interested to invest in stocks with international businesses have some very good options at ASX. Companies which either exports or operates at offshore, have the potential to gain from currency fluctuation as well, which can be seen from weakness in AUD against USD. Few such important companies with decent upside potentials are ResMed Inc (ASX: RMD), Aristocrat Leisure Limited (ASX: ALL) and James Hardie Industries Plc (ASX: JHX). Let’s focus on the performance of these stocks based on their operational activities and financial highlights.

ResMed Inc. (ASX: RMD)

Health care sector company, ResMed Inc. (ASX: RMD) predominantly operates in the sleep and respiratory disorders sector of the medical device and health care industry. After the acquisition of Brightree LLC, the company became the supplier of business management software & services to medical equipment and home health providers. The company recently announced an increase in revenue by ~12% pcp to $662.2 million in Q3 FY19, which was majorly due to an increase in revenue across all segments of its business (incl. recently acquired Software as a Service (SaaS) organizations) and a good growth in device sales globally. Revenues in Latin America, Canada, and the United States, excluding Software-as-a-Service (SaaS), increased by 10% as compared to previous corresponding period, driven by strong sales across its mask and device products.

Device sales in Japan and France, as per the expectation, were impacted due to device upgrade programs by the customers, whereas device sales outside these countries grew well. The Group’s gross margin rose by 100 basis points to 59.2%, predominantly due to higher margin contribution from MatrixCare, benefits from procurement and manufacturing efficiencies and product mix changes despite declines in average selling prices. RMD’s net operating profit increased by 15% pcp to $157 million. The Board of Directors proposed a quarterly cash dividend of $0.37 per share with payment date on June 13, 2019 and record date on May 9, 2019.

The company’s expanding mask portfolio is driving share growth across all geographical region and has a robust product pipeline to deliver sustainable growth. It believes that it is on a right path to improve more than 250 Mn lives in out-of-hospital healthcare by 2025.

At market close on 9 May 2019, the stock of ResMed was trading at $15.90, with a market capitalisation of $22.87 billion. Its current P.E. multiple is at 36.130x, and its last EPS was noted at AUD0.442. Its annual dividend yield has been noted at 0.91%. Its 52 weeks high and low stands at $16.57 and $12.65 respectively. Its absolute returns for the past one year, three months and one month are 21.74%, 16.16%, and 11.69%, respectively (9 May 2019 AEST: 04:00 PM).

Aristocrat Leisure Limited (ASX: ALL)

A technology sector company, Aristocrat Leisure Limited (ASX: ALL) is engaged in designing, development and distribution of gaming content, platforms and systems, including electronic gaming machines, casino management systems and digital social games. In the past few years, ALL has made important acquisitions such as 100% interest in Plarium Global Limited (a free to play, social and web-based game developer); and 100% interest in Big Fish Games Inc. which is global publisher of free-to-games that is focused on specific game segments, including social casino, social gaming, and premium paid games. The company recently published sector information for Aristocrat Digital. The group’s operating model consists of superior talent, commitment to innovation, market-leading product and content, strong infrastructure, processes, systems, robust financial capacity, and good governance.

One of its expansion segment product RAID: Shadow Legends is a battle collection role playing game comprising visually appealing mobile free-to-play (F2P) fantasy with an exhilarating thematic style that appeals to mid-core players worldwide. Its target demographic is comprised of 70% male and 30% female and the age group of between 18-44. The group’s launch strategy focuses on Tier 1 western countries, such as the USA 50%, Asia 20%, and others at 30%.

At market close on 9th May 2019, the stock of Aristocrat Leisure was trading at $25.74, with a market capitalisation of ~$16.28 billion. Its current P.E. multiple is at 30.0x, and its last EPS was noted at AUD0.850. Its annual dividend yield has been noted at 1.80%. Its 52 weeks high and low price stands at $33.06 and $20.66 respectively. The absolute return for the past one year, six months and three months are -6.01%, -7.17%, and 3.66%, respectively (9 May 2019 AEST: 04:00 PM).

James Hardie Industries plc (ASX: JHX)

A materials sector company, James Hardie Industries plc (ASX: JHX) is an important fibre cement backerboard and siding manufacturer. Its products are used in important markets such as new residential construction; manufactured housing; repair & remodelling; and a variety of commercial & industrial applications. In Q3 FY19 results, JHX announced group’s adjusted net operating profit of US$65.9 million for the quarter, down 10% as compared to the previous corresponding period. Its adjusted EBIT decreased by 10% pcp to US$90.6 million. The net sales for the company increased by 18% pcp to US$586.2 million. It's North America fibre cement segment volumes increased by 1% in the third quarter, and EBIT margin, excluding product line discontinuation expenses was reported at 22.3%. The Asia Pacific Fiber Cement Segment EBIT margin was reported at 21.3% for the same period. The Europe Building Products segment’s adjusted EBIT margin (excl. acquisition costs) was reported at 9.2% for the same period.

At market close on 9th May 2019, the stock of James Hardie was trading at $18.530 with a market capitalisation of $8.31 billion. Its current P.E. multiple is at 32.550x, and its last EPS was noted at AUD0.572. The 52 weeks high and low price stands at $23.91 and $14.38.


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