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Defensive Stocks
The entities whose earnings growth and performance have a very low association to the economy are known as defensive stocks. The revenue, cash flow etc of defensive stocks continue to be steady irrespective of the economy.
Personal care, healthcare and other consumer staples are categorised under defensive stocks. Healthcare stocks also come under defensive stock since people tend to fall sick irrespective of the economy and need for medicinal treatment are not sensitive to the economy.
The entities with solid recognised brands are able to control their brands to retain higher levels of ROE and thus, sustain higher valuations as compared to other sectors.
While picking stocks, the investors should be aware about their objectives, their risk capacity and possess good knowledge about the entities they opt to make an investment in. Selecting quality stocks which fits the goal of investment is very important.
The speciality of defensive stocks is that they are able to increase their profits and ROEâs, which makes them defensive in the first place.
Below discussed are seven stocks from the different sectors, let us have a look at their stock performance on the ASX and recent updates.
Ramsay Health Care Limited (ASX: RHC)
The company is a leading hospital group offering healthcare services. The company operates in around 500 locations throughout Australia, United Kingdom, France, Sweden, Norway, Germany, Indonesia, Hong Kong and Italy.
Change of Directorâs Interest
On 3 December 2019, the company notified on the changed interest in one of its directors- James Malcolm McMurdo, with effect from 29 November 2019 wherein, the director had acquired 542 share rights.
Results of Annual General Meeting
On 14 November 2019, the company declared the Annual General Meeting results. Below are the resolutions which were passed during the AGM:
- Resolution 1 - Adoption of the Remuneration Report.
- Resolution 2 - Ms Catriona a Alison Deans was elected as a Non-Executive Director of the company.
- Resolution 3 - Mr James Malcolm McMurdo was elected as a Non-Executive Director.
- Resolution 4 - Approval for the grant of 50,483 FY2020 Performance Rights to the MD.
- Resolution 5 - Approval for the corrective grant of 1,301 FY2019 Performance Rights to the MD.
Stock Performance
On 16 December 2019, the stock of RHC last traded at $73.620, moving up by 2.907 per cent from its previous close. The company has ~202.08 million shares outstanding and a market cap of $14.46 billion. The stock has generated positive returns of 0.41 per cent in the last six months, while its YTD return stands positive at 23.86 per cent.
ResMed Inc. founded in 1989, is a global leader in manufacturing, distribution, development and marketing of medical devices and cloud-based applications. The company employs ~7,200 people and sell its products in ~120 nations.
YOY revenue rose by 16%, non-GAAP operating profit up by 22%
On 25 October 2019, RMD notified the market with the first quarter for FY 2020 closed 30 September 2019, dated 24 October 2019. A few pointers from the same are as mentioned below:
- During the period, the revenue rose by 16 percent standing at $681.1 million, growing by 17 percent on the basis of constant currency.
- Gross margin increased to 120 bps, recorded at 59.5 percent.
- Net operating profit rose by 19 percent. While non- GAAP operating profit rose by 22 percent.
- During the period GAAP diluted EPS was noted at $0.83, while non-GAAP diluted EPS was recorded at $0.93.
Stock Performance
On 16 December 2019, the stock of RMD settled at $22.450, rising by 2.371 per cent from its last close. The company has ~1.43 billion shares outstanding and a market cap of $31.44 billion. The stock has generated positive returns of 27.20 per cent in the last six months, while its YTD return stands positive at 36.72 per cent.
WAM Capital Limited (ASX: WAM)
WAM Leaders Limited, established in 1997, is an investment company. On behalf of over 80,000 shareholders, the company invests more than $3 billion in undervalued Australian and global growth companies. Recently on 4 December 2019, the company announced that Wilson Asset Management Group has ceased to be a substantial holder of City Chic Collective Ltd (ASX: CCX)
Results of Annual General Meeting
On 19 November 2019, the company has declared the Annual General Meeting results. Below are the resolutions which are passed during the AGM:
- Resolution 1 â Adoption of Remuneration Report.
- Resolution 2 - Re-election of Director â Geoff Wilson AO.
- Resolution 3 - Re-election of Director â Kate Thorley.
Stock Performance
On 16 December 2019, the stock of WAM settled at $2.240, edging up by 0.448 per cent from its previous close. The company has ~721.26 million shares outstanding and a market cap of $1.61 billion. The stock has generated positive returns of 9.31 per cent in the last six months, while its YTD return stands positive at 3.24 per cent
AGL Energy Limited (ASX: AGL)
AGL Energy Limited, established in 1837, is an Australia based leading integrated energy business. AGL functions Australiaâs biggest private electricity generation portfolio, with
a total capacity of 10,413 MW.
Change in Organisational Structure
On 5 December 2019, the company announced plans to revise its organisational structure, combining Wholesale Markets and Group Operations under a newly created executive role, Chief Operating Officer, effective from April 2020.
Under the new structure, the COO will replace the designation of Executive General Manager Group Operations and General Manager Wholesale Markets which is currently held by Richard Wrightson and Doug Jackson respectively.
Stock Performance
On 16 December 2019, the stock of AGL settled at $21.070, rising by 2.232 per cent from its previous close. The company has ~645.00 million shares outstanding and a market cap of $13.29 billion. The stock has generated positive returns of 5.37 per cent in the last six months, while its YTD return stands positive at 1.53 per cent.
Bod Australia Limited (ASX: BDA)
Bod Australia Limited manufactures, develops and distributes personal care products. The company offers beauty and healthcare products to spa industries, pharmacies and such.
Change in Directorâs Interest
On 10 December 2019, the company announced about the change of one of its directors - Akash Bedi interest with effect from 9 December 2019. The number of securities held by the director after the change was 500,000 unlisted options with an exercise price of $0.47 and an expiry date of 9 December 2022.
Stock Performance
On 16 December 2019, the stock of BDA settled flat at $0.330. The company has ~91.37 million shares outstanding and a market cap of $30.15 million. The stock has generated positive returns of 26.92 per cent in the last six months, while its YTD return stands negative at 15.38 per cent.
Tabcorp Holdings Limited (ASX: TAH)
Tabcorp Holdings Limited is a world-class diversified gambling entertainment group. The company employs approximately 5,000 people and have more than 3 million registered customers.
Recently the company announced the date for releasing its half-yearly results for FY2020 - 19 February 2020 and Dividend Payment Date - 18 March 2020.
Results of Annual General Meeting
On 24 October 2019, the company has declared the Annual General Meeting results. Below are the resolutions which are passed during the AGM:
- Resolution 2(a) - Ms Paula Dwyer was re-elected as a Director of the Company.
- Resolution 2(b) - Justin Milne was re-elected as a Director of the Company.
- Resolution 3 - Adoption of the Remuneration Report.
- Resolution 4 - Grant of Performance Rights to Managing Director and Chief Executive Officer
Stock Performance
On 16 December 2019, the stock of TAH settled at $4.730, up by 0.425 per cent from its previous close. The company has ~2.03 billion shares outstanding and a market cap of $9.54 billion. The stock has generated positive returns of 3.74 per cent in the last six months, while its YTD return stands positive at 11.08 per cent.
Wesfarmers Limited (ASX:WES)
Wesfarmers Limited headquartered in Perth, Australia is involved in diverse businesses such as liquor, supermarkets, hotels, convenience stores etc. The company is one amid the largest private-sector employers with approximately 105,000 team members and is owned by 484,000 shareholders.
Change in Directorâs Interest
On 5 December 2019, the Company announced the change in one of its directors - Robert Geoffrey Scottâs interests. The director acquired 159,990 shares (consisting of 79,995 Performance Shares and 79,995 Restricted Shares) allocated as per the terms of the KEEPP.
Stock Performance
On 16 December 2019, the stock of WES settled at $41.750, up by 1.954 per cent from its previous close. The company has ~1.13 billion shares outstanding and a market cap of $46.43 billion. The stock has generated positive returns of 12.87 per cent in the last six months, while its YTD return stands positive at 33.59 per cent.
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