Few Surprises with ASX Material Sector Stocks – ORI, AMC, JHX, BLD, IPL

  • Nov 05, 2019 AEDT
  • Team Kalkine
Few Surprises with ASX Material Sector Stocks – ORI, AMC, JHX, BLD, IPL
The material sector comprises of stocks for companies that are involved in the discovery, processing and development of raw materials. The sector includes companies which are involved in dealing with chemical, metal and mining, refining and forestry products. These companies normally supply materials to construction companies and thus are sensitive to business cycles and generally thrive when the economy rises. On 5th November 2019, S&P/ASX200 Materials index ended the session in green, as the index witnessed a rise of 41 points (0.31%) to end the session at 13,360. We would now have a look at some of the ASX listed Material Sector Stocks.
Orica Limited (ASX: ORI)
Orica Limited is the global leader in the provision of ground support in tunnelling and mining, largest provider of blasting systems and commercial explosives to the infrastructure and mining markets, and the leading supplier of sodium cyanide for gold extraction. The market capitalisation of the company stood at $8.99 billion as on 5th November 2019. Financial Highlights for FY19 Ending on 30th September 2019: Orica announced statutory Net Profit After Tax for the 12 months ended 30th September 2019 of $245 million, which was up from the levels of $48 million loss in FY18. Company’s underlying EPS increased by 14% to 97.9 cents per share.
  • Company’s growth drivers are starting to deliver as its manufacturing and cost performance is improving across the board;
  • Volumes are growing and company’s market leading technology solutions are gaining traction with customers;
  • All the company’s regions are performing strongly with Europe, Middle East & Africa reporting a particularly pleasing result in FY19 following focused efforts to improve their businesses;
  • Increased penetration of technology-based blasting solutions and contract wins have driven sales revenue 9% higher for the period;
  • The increase in Australia, Pacific & Asia volumes was led by 6% growth in Australia, with market share in the region continuing to increase;
  • The company has declared a final ordinary dividend of 33 cents per share (5 cents franked), bringing the full year dividend to 55 cents per share.
Orica Limited Increase Market Share Continues to Drive Growth (Source: Company Reports) Stock Performance The stock of ORI closed the day’s trading at $23.710 per share on 5th November 2019, down by 0.339% from its previous closing price. The company has a market capitalisation of $8.99 billion as on 5th November 2019. The total outstanding shares of the company stood at 380.58 million. The stock has given a total return of 8.79% and 27.59% in the time period of 3 months and 6 months, respectively.
Amcor PLC (ASX: AMC)
Amcor PLC is engaged in the business of development and production of rigid and flexible packaging for a variety of food, beverage, pharmaceutical, medical device, home and personal care and other fast-moving consumer end markets. Financial Highlights for FY19 The company performed well during the year with momentum building in several key metrics. Adjusted, non-GAAP Net sales increased by 5.5% and adjusted net income was up by 9% - both in constant currency terms and compared with last year on the back of marked improvements in working capital The company reported adjusted cash flow after dividends of US$193 million. Both Rigid Packaging and Flexibles reporting segments delivered good results, driven by a combination of higher sales and strong rigor on operating costs.
  • The company reported GAAP net income of US$430.2 million and cash flow from operating activities stood at US$776.1 million;
  • Adjusted EBIT stood at US$1,075.4 million, up 5.7% in constant currency terms;
  • The company declared total dividend of 45.5 US cents per share for FY19.
Financial Highlights (Source: Company Reports) Stock Performance The stock of AMC closed the day’s trading at $14.290 per share on 5th November 2019, up by 1.132% from its previous closing price. The company has a market capitalisation of $22.89 billion as on 5th November 2019. The total outstanding shares of the company stood at 1.62 billion. The stock has given a total return of -9.25% and -13.84% in the time period of 3 months and 6 months, respectively.
James Hardie Industries Plc (ASX: JHX)
James Hardie Industries Plc is engaged in the business of research, development, manufacture, sale and marketing of fibre cement building materials. Announcement of Q2FY20 Results The company has announced that it will conduct a management briefing on 7th November 2019 to give a brief about its 2nd Quarter FY20 results. Resignation of CFO The company has announced that Mr Mathew Marsh, the CFO and Executive Vice President-Corporate, has resigned from the company. For his replacement, the company has appointed Ms Anne Lloyd as the interim CFO of the company which is an experienced corporate and finance executive. Stock Performance The stock of JHX closed the day’s trading at $25.180 per share on 5th November 2019, down 0.317% from its previous closing price. The company has a market capitalisation of $11.3 billion as on 5th November 2019. The total outstanding shares of the company stood at 447.52 million. The company has given a total return of 31.5% and 33.58% in the time period of 3 months and 6 months, respectively.
Boral Limited (ASX: BLD)
Boral Limited is a company that supply and manufactures construction and building and materials in Australia, Asia and the USA. Update of Agreement Between Boral And Wagners Wagners Holding Company Limited (ASX: WGN) has now restarted supplying cement to Boral. Earlier, the company elected to suspend supply of cement products to Boral in reply to Boral delivering a pricing notice under the Cement Supply Agreement. The issue is still the subject of argument between the parties and has been set for trial in the Supreme Court of Queensland starting from 28th November 2019. Outlook for FY20 The trading conditions that the company has seen in the months of July and August, the company expects net profit after tax before significant items to be around 5% to 15% lower in FY20 relative to FY19. But, further benefits from improvement initiatives and higher than average property earnings will help the result. Income Statement (Source: Company Reports) Stock Performance The stock of BLD closed the day’s trading at $5.090 per share on 5th November 2019, up by 1.394% from its previous closing price. The company has a market capitalisation of $5.89 billion as on 5th November 2019. The total outstanding shares of the company stood at 1.17 billion. The company has given a total return of -2.52% and 1.01% in the time period of 3 months and 6 months, respectively.
Incitec Pivot Limited (ASX: IPL)
Incitec Pivot Limited is engaged in the business of manufacturing and distribution of fertilisers, industrial chemicals and industrial explosives. Appointment of non-executive Directors Incitec announced that it has appointed Mr Gregory Robinson and Dr Xiaoling Liu as independent non-executive directors of the company. Dr. Xiaoling and Mr. Greg will improve the diversity of experience, skills and perspectives of the IPL Board by their deep operational expertise, extensive senior executive experience and their global perspectives. Incitec Pivot Fertilisers Strategic Review IPL has announced that it is starting a strategic review of its Fertilisers Asia Pacific business segment which is the leading distributor of fertilisers in Australia, as well as the sole manufacturer of phosphate fertilisers and the only producer of nitrogen fertilisers on the East Coast of Australia. The strategic review will consider various options, which may include retaining or demerging the business, potential sale of the business, and continuing to invest for growth and its aim is to increase shareholder value and at the same time also consider the interests of other stakeholders. Stock Performance The stock of IPL closed the day’s trading at $3.610 per share on 5th November 2019, flat compared to its previous closing price. The company has a market capitalisation of $5.8 billion as on 5th November 2019. The total outstanding shares of the company stood at 1.61 billion. The company has given a total return of 6.80% and 5.56% in the time period of 3 months and 6 months, respectively.

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