What To Look At During Santa Rally – WOW, BIN, WEB

  • Nov 05, 2019 AEDT
  • Team Kalkine
What To Look At During Santa Rally – WOW, BIN, WEB

The “Santa Rally” explains the tendency of stocks to increase during Christmas. Maybe the investors are in a decent mood around the holidays. According to Dow Jones Market Data, the Dow Jones Industrial Average gains an average of 0.15 per cent, and the S&P 500 rises an average of 0.19 per cent on Halloween. The market remains supportive, and there may be a number of strong catalysts as well. Before the end of this year, some of the Australian Stock Exchange (ASX) shares may be set for the Santa rally. There is a great possibility that some of the stocks exit 2019 with a powerful rally.

Let’s discuss the three stocks that may be part of a Santa Rally, i.e. Woolworths Group Limited from consumer staple sector, Webjet Limited from the consumer discretionary sector and Bingo Industries Limited from industrials sector.

Woolworths Group Limited (ASX: WOW)

Woolworths Group Limited is an Australia-based company engaged in the retail operations. The company serves 29 million customers with the help of 201,000 team members across brands every week.

Endeavour group Transformation Update

On 4 November 2019, the company has announced that the Federal Court has approved the dispatch of Restructure Booklet for a Restructure Scheme meeting (EGM) to be held on 16 December 2019. Restructuring is the first stage of the Endeavour Group Transformation. Following the Restructure, the company will attempt to conclude the merger of ALH as the next step. The merger does not require the approval from shareholders. Endeavour Group will be 14.6 per cent owned by Bruce Mathieson Group and 85.4 per cent owned by the company. Following this, The Endeavour Group will be demerged from Woolworths Group. Stage 1 of the process is described below;

Stage 1

Restructure to form Endeavour Group

Following the Restructuring, the Endeavour Group will hold the Woolworths drinks business and 75 per cent ownership in ALH. The Endeavour group also holds a minority interest in the other entities and businesses. The Endeavour group has generated $10,312 million of Pro-forma revenue, $774 million Pro-forma EBIT and $1,002 million of Pro-forma EBITDA in FY 19.

Annual General Meeting Notice for 2019

On 4 November 2019, the company has announced the date of Annual General Meeting to be held on 16 December 2019 at international Convention Centre Sydney The items mentioned below will be considered during the meeting:

  • Election of Directors
  • Adoption of Remuneration Report
  • Approval of Managing Director and CEO F20 LTI grant
  • Approval of US-nonexecutive Director Equity Plan
  • Approval of amendment to the constitution
Group online Sales increased by 37.4 per cent in Q1 2020

On 30 October 2019, the company reported that its Group online Sales increased by 37.4 per cent to $802 million in the first quarter compared to the corresponding year-prior period. Few highlights of the quarter ending 6th October 2019, are as below:

  • Group sales of the company increased by 7.1 per cent to $15.9 billion compared to the corresponding prior-year period.
  • The Australian food segment sales grew 7.8 per cent to $10,663 million was driven by Lion King Ooshies and Woolworths Discovery Garden Campaign and online.
  • New Zealand food sales grew by 4.6 per cent to NZD$1,756 million, while customer metrics continued to improve.
  • The Endeavour drinks sales increased by 4.9 per cent over the year-ago quarter with both BWS and Dan Murphy’s reporting solid Growth.
  • Group online sales grew by 37.4 per cent over the prior corresponding period, driven by WooliesX and CountdownX.

Stock Performance

The stock of WOW was last traded at $37.690 on ASX on 05 November 2019, down by 0.053 per cent from its previous close. The company has approximately. 1.26 billion outstanding shares and a market cap of $47.56 billion. The stock has generated a positive return of 16 per cent in the last six months and a positive return of 29.37 per cent on year to date basis.

BINGO Industries Limited (ASX: BIN)

BINGO Industries Limited is a waste management and recycling company. The company provides environmental and waste management solutions across the waste management supply chain. The company’s recycling centres are in NSW and Victoria and the company is a member of green Building Council of Australia.

Change in Substantial Holding

On 25 October 2019, the company has announced the change the substantial holding of Schroder Investment Management Australia Limited in the company with 51,222,094 votes and 7.83 per cent voting power against 59,230,586 votes and 8.96 per cent voting power held previously.

Notice of Annual General Meeting for 2019

The company has released a notice for Annual General Meeting of shareholders to be held on 13 November 2019. The business items mentioned below will be considered during the meeting;

  • Remuneration Report to be adopted
  • Re-election of Director - Maria Atkinson
  • Election of Director - Ian Malouf
  • Election of Director - Elizabeth Crouch
  • Approval to grant Long Term Incentive Performance Rights to Daniel Tartak

The Financial performance of the company for FY 2019 can be read Here

Stock Performance

The stock of BIN was last traded at $2.410 on ASX on 05 November 2019. The company has approximately. 653.78 million outstanding shares and a market cap of $1.57 billion. The stock has generated a positive return of 36.36 per cent in the last six months and a positive return of 31.51 per cent on year to date basis.

Webjet Limited (ASX: WEB)

Webjet Limited was established in 1998 and is engaged in the digital travel business. The company caters both Business to Consumer (B2C) Travel and Business to Business Travel (B2B). The company’s B2C business operates the leading OTA consumer brands of Webjet and B2B business provides a wide range of hotel inventory at the lowest price. Recently the company has announced its Annual General Meeting of shareholders to be held on 20 November 2019.

Impact of Thomas Cook Liquation

On 23 September 2019, the company released a notice that shows the impact of Thomas cook liquation process on the Webjet FY20 results, which are as follows;

  • Loss of Total Transaction Value (TTV); the company previously indicated that it is expected to earn $150 to $200 million TTV from Thomas Cook in FY20.
  • Thomas cook owns Webjet approximately €27 million in outstanding receivables; any unpaid amount will be treated as a one-time expense.
  • There is no impact on 3,000 hotel contracts acquired from Thomas Cook by the company
  • FY20 guidance for EBITDA will be provided by the company in the AGM on 20 November 2019.

The Financial performance of the company for FY 2019 can be read Here

Stock Performance

The stock of WEB closed at $11.550 on ASX on 05 November 2019 down by 0.173 per cent from its previous close. The company has approximately. 135.6 million outstanding shares and a market cap of $1.57 billion. The stock has generated a negative return of 29.54 per cent in the last six months and a positive return of 9.25 per cent on year to date basis.


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