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In the past few weeks, investors have seen several ups and downs due to stock markets all over the world shifting wildly, as a result of the fast-spreading coronavirus. As the number of cases continues to rise, the fear is developing in the stock market. In spite of the best efforts from health and regulatory authorities all over the globe, there are chances that the COVID-19 epidemic might get worse in the upcoming time.
Also read: How to Prepare for Coronavirus: Protective Measures and Myths
Although it has been reported that the growth rate of confirmed cases in mainland China has slowed down, other countries, such as South Korea, Italy and Iran have seen an explosion of incidents. As the financial markets across the globe have responded negatively to this outbreak, investors are finding a few good prospects in the midst of the condition.
In this article, we are highlighting three ASX-listed stocks with promising outlook- PME, CIM and COL.
Pro Medicus Limited (ASX:PME)
ASX-listed one of the major health care sector players, Pro Medicus Limited was founded in 1983 and is a leader in offering medical imaging IT solutions and services. The Company provides broad variety of radiology IT software to imaging centres, various health care groups, along with hospitals across the globe.
On 13 February 2020, the Company updated the market with its half-yearly (ended 31 December 2019) presentation on ASX, highlighting the financial updates.
- PME generated revenue of approximately $29.3 million, increased by 15.7% on previous corresponding period (pcp).
- The Company recorded a net profit after tax of nearly $12.1 million, up by 32.7% on pcp;
- Pro Medicus has a strong balance sheet with approximately $38.8 million in cash reserves, representing a year on year increase of 20.2%.
Outlook-
- During the financial year 2019, the Company announced several new partnerships and contracts- in North America, including Carle Foundation Hospital in Illinois (July 2018); Partners Healthcare (November 2018); Duke Health in North Carolina (April 2019) and lately The Ohio State University Wexler Medical Center, as well as Nines Inc.
- The Company anticipates that all the contracts and partnerships made in the previous year will contribute to future revenues.
- Pro Medicus informed that it remains in an excellent position to continue to capitalise on the increasing global as well as local opportunities. Moreover, the management team is working on a significant number of new opportunities.
- Further, the product pipeline of PME remains robust and continues to grow.
- PME revealed that it had received positive feedback on both new Visage 7 Worklist and the AI Accelerator platform, hence, the Company predicts that there are chances that it would get profit from an increasing network effect.
- It is noteworthy that the income of PME in the first half of the financial year 2020 was all recurring transaction-based revenue that establishes the base for development in the subsequent half as well as for upcoming periods.
Stock Performance
On 13 March 2020, the stock of PME closed the day’s trade at $16.620, down by 0.240%, with a market capitalisation of nearly $1.75 billion. PME has approximately 103.95 million shares outstanding, and its fifty-two-weeks high and low price was observed at $38.390 and $14.600, respectively. The stock has delivered a positive return of 11.58% in the previous year.
Industrials sector player, CIMIC Group Limited is working across the lifecycle of infrastructure, assets as well as resources projects. The Company, which is an international contractor and contract miner, is into providing engineering mining, mineral processing, construction, operation and maintenance services. It operates in more than 20 countries and employs approximately 40,000 people.
CIMIC’s UGL Secures $180 Million in Rail Contracts
On 11 March 2020, CIMIC Group unveiled that its UGL company has been awarded two rail sector contracts, generating total revenue of over $180 million.
Moreover, UGL has procured a contract for developing new locomotives in Newcastle, NSW, for Qube Logistics, over a time of ~18 months.
CIMIC Group CEO Juan Santamaria commented that UGL’s long history of manufacturing is vital to the Company’s success in Newcastle and CIM is proud that UGL had a presence in New South Wales for over 120 years, with its presence in Newcastle.
Outlook-
- The Company mentioned that the team won approximately $18.0 billion of new work in 2019, building a robust pipeline of opportunities for the upcoming year.
- Further, the Company has nearly $37.5 billion of work in hand, indicating more than two years of work and offering a strong outlook for future.
- The Group expects NPAT to be in the range of $810 to $850 million for the financial year 2020, which is subject to market conditions.
- The Company would have a disciplined focus on sustaining a strong balance sheet, generating cash, and a rigorous approach to tendering and project delivery.
Stock Information-
On 13 March 2020, the stock of CIM settled at $21.450, up by 6.136%, with a market capitalisation of nearly $6.54 billion. CIM has approximately 323.73 million shares outstanding, and its fifty-two-weeks high and low price was observed at $51.500 and $18.130, respectively.
ASX-listed supermarket giant, Coles Group Limited is a leading Australian retailer, with more than 2,500 retail outlets across the country. The Company is into the consumer products distribution, which includes household goods, groceries, fresh food and liquor, in addition to fuel and financial services, through online platforms and its store network.
COL, during mid-February 2020, updated the market with its half year presentation for the period ended 31 December 2019, disclosing the financials and the outlook.
- The Company’s own brand achieved more than $1 billion of sales in December 2019, up by 7% as compared to the previous corresponding period;
- More than 3,000 new products introduced as part of tailored range review in supermarkets;
- Online sales of the Company increased by 24%, ‘Delivery Plus’ introduced;
- >1,000 stores now connected to high-speed broadband improving productivity
Outlook-
- Due to strong supermarket property conditions, a net property capex inflow is expected to be between $130 million and $180 million;
- Incremental costs associated with the removal of plastic bags and increased flybuys promotions which were a benefit to supermarkets’ EBIT growth in the first half of the financial year 2020 will not occur in the second half of the fiscal year 2020;
- Supermarkets EBIT growth in the second half of the financial year 2020 will benefit from a Smarter Selling provision of $19 million.
Stock Performance
On 13 March 2020, COL stock ended the day at $16.050, up by 8.74%, with a market capitalisation of nearly $19.69 billion. COL has approximately 1.33 billion shares outstanding, and its fifty-two-weeks high and low price was observed at $17.250 and $11.036, respectively. The stock has delivered positive return of 32.56% in the last one year.
To know more, Do Read: Opportunities to be Tapped in the Healthcare Sector Amid Coronavirus
