Radar on 3 Growth Stocks on NZX

  • Jul 04, 2020 NZST
  • Team Kalkine
Radar on 3 Growth Stocks on NZX

Summary

  • For spotting growth stocks, it is important to ascertain future potential.
  • FPH is well-placed and resilient to respond to coronavirus pandemic and adapt to a ‘new normal’. Expansion of previous dividend policy might attract the investors’ attention.   
  • KMD’s robust balance sheet and liquidity position might help in driving growth moving forward.
  • For FY 2021, AFT targets positive cashflow along with an operating profit in the range of $14.0 million - $18.0 million.

The investors need to follow measures in order to spot growth stocks for the long-term. Generally, it is said that the broader understanding of the industry and the company is critical for the identification of the growth stocks. However, it needs to be noted that there are certain investment risks.

Let us look at three growth stocks in our radar.

AFT Pharmaceuticals Limited (NZX: AFT)

AFT Pharmaceuticals Limited is a rising multinational pharmaceutical company that markets, develops and distributes a broad portfolio of pharmaceutical products across an extensive range of therapeutic categories which are spread across all major pharmaceutical distribution channels: prescription, over the counter (OTC) and hospital.

AFT’S Share Purchase Plan Oversubscribed

The company’s NZ$2 million share purchase plan (SPP) has closed oversubscribed. It received a strong shareholder support with total application of about NZ$9.8 million. SPP was the part of the company’s capital raising which was announced on June 10, 2020, whereby it also undertook fully underwritten NZ$10 Mn placement of the new shares to select investors in offshore as well as local markets and certain major shareholders sold down NZ$63.8 Mn of existing shares.

Nathan Hukill Resigns from the Company’s Board

On 22nd June 2020, the company announced that Nathan Hukill, president of the company’s former major shareholder CRG, has resigned as a non-executive director. The move follows the company’s $74 million capital restructure, which has seen CRG, a specialist healthcare investor, sell the 16 million shares it held in the company. CRG sold its stake because its fund that made the investment is now returning capital to investors.

Stock Performance

On July 3, 2020, the stock of AFT closed the day’s trading at NZ$4.140 per share, which implies a rise of 2.22% on an intraday basis. The company is having a market capitalisation of around $429.32 million.

Kathmandu Holdings Limited (NZX: KMD)

Kathmandu Holdings Limited is a marketer, designer, wholesaler and retailer of footwear, clothing, and equipment for adventure and travel.

KMD Reports Strong Recovery in Sales

As the lockdown restrictions are eased now, majority of the Kathmandu Holdings Limited’s store network reopened with notable exceptions being airport stores. Some key highlights of same store sales for the last six full weeks from 18 May to 28 June 2020, as well as adjusted for stores still closed, are:

  • Rip Curl same store sales were up by 21.0 per cent, indicating retail stores up by 5.1 per cent and online up by 151 per cent;
  • Kathmandu same store sales were up by 12.5 per cent, indicating retail stores up by 2.2 percent, and online up by 78 percent.

Stock Performance

The stock of KMD closed the day’s trading at NZ$1.200 per share, reflecting a fall of 5.51% on an intraday basis. The market capitalisation of Kathmandu Holdings Limited stood at around $850.80 million.

Fisher & Paykel Healthcare Corporation Limited

Fisher & Paykel Healthcare Corporation Limited (NZX: FPH) is a primary marketer, manufacturer and designer of systems and products for usage in surgery, acute care, respiratory care, and the treatment of obstructive sleep apnea.

FPH Announces Its Full Year Results; Profit Up by 37%

For the 12 months ended 31st March 2020, the company reported operating revenue of $1.26 billion, up by 18 per cent over last year, or 14 per cent in constant currency. Net profit after tax stood at $287.3 million, up 37% over the previous year, or 30% in constant currency.

The rise in revenue was mainly driven by growth in usage of OptiflowTM nasal high flow therapy, demand for products to treat coronavirus patients, as well as robust hospital hardware sales across the course of the year.

As per the release, with new processes, new procedures as well as new ways of working safely, the company has managed to double and in some instances triple, output for some of the hospital hardware products over just a few months at the end of the year.

The company has also expanded its previous dividend policy into a broader capital management policy. It has maintained a target debt-to-debt-plus equity ratio in the range of +5 per cent to -5 per cent, and the company anticipates increasing dividends as earnings grow, while considering the target gearing ratio.

The company has also agreed to pay a final dividend of 15.5 cps, an increase of 15 per cent as compared to the final dividend last year. This brings the total dividend for the year to 27.5 cps, an increase of 18 per cent on last year.

Key Full Year Financial Results (Source: Company Reports)

Stock Performance

The stock of FPH closed the day’s trading at NZ$34.500 per share, reflecting a fall of 0.46% on an intraday basis. The market capitalisation of FPH stood at around $19.83 billion.

 


Disclaimer
The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. The above article is NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) under discussion. Kalkine does not in any way endorse or recommend individuals, products or services that may be discussed on this site.

 

   
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