US Tanks and NZ Follows Suit- A Look at Some Outliers

  • Jun 15, 2020 NZST
  • Team Kalkine
US Tanks and NZ Follows Suit- A Look at Some Outliers

Summary

  • AFC becomes the biggest gainer of the day as the stock rose by 100%
  • NZM focuses on building shareholder value and highlighted some points in this regard
  • Tower decides to refund $7.2 million to customers

US stock market declined on Thursday as the investors got worried about the cautious commentary from the Federal Reserve. Market players were also worried about the second wave of coronavirus. All three major indexes witnessed a significant correction.

Tremors of the US stocks were also felt in NZ stock market. S&P/NZ50 plunged by 2.23% to 10,906. On June 12, 2020, the share price of New Talisman Gold Mines Limited (NZX: NTL) declined by 12.50% to NZ$0.007 per share. However, the stock of New Zealand Oil & Gas Ltd (NZX: NZO) fell by 11.30% to NZ$0.510 per share.  

However, there were some outliers which defied the market and were major gainers of the day. Let us have a look at them.

 

Top Gainers (Source: NZX)

Top Gainers (Source: NZX)

AFC Group Holdings Limited (NZX: AFC)

The share price of AFC was up by 100% on June 12, 2020 and was the top gainer, closing the day’s trading at NZ$0.002 per share.

The company has a market capitalisation of around $7.329 million. In the release dated March 23, 2020, AFC stated that, effective April 1, 2020, all the Directors have volunteered to take 30% decrease in the remuneration. Additionally, the management of the company has volunteered to take a 20% cut in remuneration until June 30, 2020.

Blackwell Global Holdings Limited (NZX: BGI)

The stock of BGI closed the day’s trading at $0.015 per share on 12th June 2020, up by 50% on an intraday basis. The company has a market capitalisation of around $7.535 million. The company has given a total return of 87.50% in the time period of one month.

NZME Limited (NZX: NZM)

NZM was the third biggest mover of the day and the stock up by 3.23% on June 12, 2020. On 11th June 2020, the company released 2020 annual shareholders’ meeting presentation and addresses. With respect to building shareholder value, there were few points which were highlighted.

Let us look at them in brief:

  • NZME plans to participate in market consolidation;
  • The company has taken various cost reduction measures to tackle the pandemic;
  • Building top-line revenue performance and growth;
  • Prudent capital management and dividend policy;
  • Reviewing Board as well as Management expertise;
  • Improving the communications with shareholders;
  • Effectively managing the impacts of covid-19 and Government support

 

Reduced Outlook for FY20

As per the release dated April 14, 2020, the company is expecting that April 2020 advertising revenues would be around 50% lower than that of April 2019.  The company’s revenue is expected to be significantly down on the corresponding period in 2019. The cost saving initiatives will partially offset the expected revenue declines.

Stock Performance

The stock of NZM closed the day’s trading at NZ$0.320 per share on 12th June 2020. The company has a market capitalisation of around $62.898 million, and the stock’s 52-week low and high is $0.18 and $0.58, respectively. The company has given a total return of 28.00% in the time period of one month.

Marlborough Wine Estates Group Limited (NZX: MWE)

MWE was the fourth biggest mover of the day and the share price was up by 2.22% on June 12, 2020.

In the interim report for the six months ended December 31, 2019, the company stated that its core strategy is to continue growing sales of bottled wines as well as gradually allocating more of its grape production to bottled wine processing.  The report also states that the global market has been challenging for NZ wines overall, with declining FOB prices and significant amounts of low price and low-quality bulk wine flooding major international markets like the US and UK.

Stock Performance

The stock of MWE closed the day’s trading at NZ$0.184 per share on 12th June 2020. The company has a market capitalisation of around $53.664 million, and the stock’s 52-week low and high is $0.18 and $0.24, respectively. The stock price has corrected -7.99% in the time period of one month.

Tower Limited (NZX: TWR)

TWR was the fifth biggest mover of the day and the stock up by 1.67% on June 12, 2020. It is mainly involved in the provision of general insurance. The company mainly operates in New Zealand with some of its operations based in the Pacific Islands region.

The company has decided to refund $7.2 million to customers due to the lesser cost of car claims throughout the period of COVID-19 lockdown. Richard Harding, CEO of the company, is of the view that every client will be refunded part of car insurance premiums which they have paid during level 3 and 4 lockdowns.

Details of refund:

  • Refunds will be paid to all customers who held car insurance with Tower from 24 March 2020 to 13 May 2020, inclusive;
  • Refunds will be calculated based on individual customers’ premiums paid, excluding taxes, fees, and levies;
  • Refunds will be prorated for customers who cancelled or joined Tower during the lockdown period;
  • Tower will communicate directly with customers advising on how the refund will be paid, with refunds starting to be paid in late June;
  • The total cost of the refund is offset by the reduced claims cost and will result in a neutral financial impact to Tower.

 

Stock Performance

The stock of TWR closed the day’s trading at NZ$0.610 per share on 12th June 2020. The company has a market capitalisation of around $257.205 million, and the stock’s 52-week low and high is $0.54 and $0.77, respectively. The stock price has corrected 3.17% in the time period of one month.

 


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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