Three Diversified Stocks with Major Updates – ALL, PRN, CCL

A wise investor generally prefers to invest in diversified stocks as different stocks react differently to the same economic event, minimizing the unsystematic risks is associated with a particular company or industry. In order to have a well-diversified portfolio, investors need to keep a close watch on the recent updates of different types of stocks.

The below mentioned three stocks, which belong to different sectors, have come up significant updates which investors should know about. Let us take a quick look at these stocks and their updates.

Aristocrat Leisure Limited (ASX: ALL)

Gaming company, Aristocrat Leisure Limited (ASX:ALL) held its 2020 Annual General Meeting (AGM) today. At the AGM, the company passed all the 8 resolutions including the special resolution regarding the renewal of proportional takeover approval provisions.

In terms of outlook, the company has reiterated the guidance provided in November 2019 as per which it expects continued growth over the 2020 fiscal full year driven by the following:

• Land-based Outright Sales which is expected to result in further incremental gains in attractive North American adjacencies. The company expects to maintain market-leading share positions across key for sale segments globally;
• Land-based Gaming Operations which is expected to expand the company’s total Gaming Operations installed base, leveraging its broadening portfolio, while maintaining market-leading average fee per day performance across the overall combined installed base;
• Anticipated growth in Digital bookings supported by scaling of recently released new games
• Expected cash tax savings which is expected enhance the Group’s ability to invest to sustain its growth momentum and create value for shareholders;

With regards to the Covid 19 virus issue, the company has assured its stakeholders that it has no direct operations in mainland China, and relatively small exposure to the Asian region generally. The company is proactively monitoring and managing potential supply chain impacts. At this stage, the company do not foresee any material adverse impacts on its business.

At the AGM, the management also provided an overview of fiscal year 2019. As per the management, the FY19 was another year of high-quality profit growth at Aristocrat consistent with its long term growth strategy. The company’s operating performance drove strong free cash flow generation, which was in turn invested to pay progressive dividend increases and to fund further growth of the company’s business.

Notably, in the past six months, ALL stock has provided a return of 26.68% to its shareholders. At market close on 20 February 2020, the stock was trading at $37.690 with a market cap of $23.86 billion.

Perenti Global Limited (ASX: PRN)

Diversified global mining service group, Perenti Global Limited recently announced that its Surface Mining Industry Sector Group (ISG) has been awarded $155.5 million in new and extended contracts, reflecting the company’s ability to deliver value for its clients by performing quality work across the Group’s diverse Surface portfolio.

The new work, extensions, and expansion of scope is across ten projects, with highlights including:

• A 3-year contract (with options to extend) for production drilling services with Boggabri Coal Operations (a part of Idemitsu Australia Resources Group) at its Boggabri Mine in New South Wales;
• A 3-year contract extension with a major iron ore producer for reverse circulation (RC) and grade control (GC) drilling at its Western Australian operations;
• A 12-month contract extension with Consolidated Minerals to support current mining operations and regional expansion projects;
• Expansion of services for a major mining contractor in Queensland which will double the contract value across the current three-year contract duration;
• A 12-month extension to existing works at Gold Fields’ St Ives and Granny Smith projects, which involves land and lake rigs for air core, RC and diamond drilling;
• An equipment hire agreement with E&P at Gold Fields’ Damang Mine in Ghana.

At market close on 20 February 2020, PRN stock was trading at a price of $1.465 with a market cap of $1 billion. In the last six months, PRN stock price has declined by 18.44% on ASX.

Coca-Cola Amatil Limited (ASX: CCL)

Coca-Cola Amatil Limited has released its 2019 full year results today. During the year, the company witnessed 6.7% rise in Group trading revenue for continuing operations, reflecting the impact of the company’s business initiatives across each market. The company has declared a final dividend of 26.0 cents per share, unfranked, representing a full year ongoing payout ratio of 86.4 per cent.

Following the release of the results, the stock witnessed an increase of 8.5% in its price.

Major Business Highlights

• Australian Beverages achieved pleasing progress across multiple areas of the business with an improved EBIT growth trajectory. The business achieved revenue growth for the first time in seven years.
• Excellent all-round performance in New Zealand & Fiji, continuing the strong momentum from previous years.
• The Indonesia & Papua New Guinea segment delivered double-digit revenue and volume growth and strong EBIT growth.
• Indonesia achieved strong revenue and volume growth from excellent execution and investments in marketing and PNG delivered strong double-digit revenue, volume and EBIT growth with the rectification of previous operational issues;
• Momentum in Alcohol & Coffee continued with another year of double-digit EBIT growth

In terms of outlook, the company has informed that it expects to deliver mid-single digit earnings per share growth in 2020 and over the medium term and remain on watch for flow-on effects on the economy of the bushfires in Australia and coronavirus (COVID-19). Further, the company expects its capex to be approximately $300 million in 2020 with dividend payout ratio of over 80 per cent over the medium term.

Notably in the past six months, CCL stock has provided a return of 15.42% to its shareholders. The stock is trading at a PE multiple of 29.330x with an annual dividend yield of 3.9%. At market close on 20 February 2020, CCL stock was trading at $13.070 with a market cap of $8.72 billion.

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