- While choosing a stock for investment, focus should be on key fundamental parameters and past performance.
- Fundamental valuation should be incorporated for detailed assessment.
- EBOS is in a robust financial position which could help the company moving forward.
- For the full year to March 31, 2020, net profit after tax stood at $287.3 million, up 37% as compared to the previous year, or 30 percent in constant currency.
Amateur investors find investing a difficult task as they are not aware about the methodologies followed by the professionals. By simply looking at the price of a stock, we cannot judge whether the stock is overvalued or undervalued.
A stock that has declined from $10 per share to $1 per share, does not really mean that it is a cheap stock. It can further go down to $0.10 per share. Also, a stock that has grown from $10 per share to $100 per share, does not mean it is expensive. It can go to $200 per share if it has potential.
While looking at the stock for investment, it is important to look at other fundamental parameters like EPS and P/E ratio.
In this article, we are going to look at five stocks that are trading above NZ$10 on NZX.
Australia and New Zealand Banking Group Limited (NZX: ANZ)
Half Yearly Results of ANZ Shows Early Impacts of Pandemic
For the six months to 31 March 2020, ANZ New Zealand posted statutory NPAT amounting to NZ$789 million, reflecting a 15% fall on the corresponding half in 2019 financial year.
- Cash NPAT stood at NZ$677 million, down 39%, reflecting a significant uplift in credit provision charges due to changes in the economic environment;
- ANZ Bank New Zealand Limited group is well capitalised with total capital ratio of 13.9%, reflecting a rise from 13.6% as at September 30 2019.
The stock of ANZ closed the day’s trading at NZ$19.700 per share on 14th July 2020, down by 0.35% on an intraday basis. The company has a market capitalisation of around $55.87 billion. The stock is trading at a P/E multiple of 12.630x.
The a2 Milk Company Limited (NZX: ATM)
The a2 Milk Company Limited is engaged in the sale of branded products in targeted markets made with milk from cows that produce milk naturally containing only the A2 protein type.
In the release dated April 22, 2020, it was mentioned that because of COVID-19, the company was uncertain about its future. Full-year EBITDA margin is expected to be above that advised in February and in the range of 31% to 32%.
The company’s 2H20 EBITDA margin is expected to be higher than previously expected primarily because of:
- Higher revenue, and hence gross margin, from greater margin nutritional products, in part because of the consumer pantry stocking in 3QFY20 compared to anticipations;
- Positive impact arising from exchange rate movement in USD: NZD impacting on China segment revenue as well as earnings; and
- Lower than anticipated costs for travel, and other costs as a result of a delay in planned recruitment, due to coronavirus restrictions.
The stock of ATM closed the day’s trading at NZ$20.930 per share on 14th July 2020, an increase of 1.11% on an intraday basis. The company has a market capitalisation of around $15.484 billion. The stock is trading at a P/E multiple of 47.560x.
Ebos Group Limited (NZX: EBO)
The company’s distribution, wholesale and retail Healthcare businesses were considered as essential services and were crucial in ensuring a sustained and stable supply of medical, healthcare, and pharmaceutical goods to the community. Its Healthcare division stayed open and operational. The Healthcare division faced unprecedented levels of demand in the 3rd quarter ended 31 March 2020.
The stock of EBO closed the day’s trading at NZ$22.000 per share on 14th July 2020. The company has a market capitalisation of around $3.583 billion. The stock is trading at a P/E multiple of 22.050x.
Fisher & Paykel Healthcare Corporation Limited
For the 12 months ended 31st March 2020, Fisher & Paykel Healthcare Corporation Limited (NZX: FPH) reported operating revenue of $1.26 billion, up 18% over last year, or 14% in constant currency. The company reported Net profit after tax of $287.3 million, up 37 per cent over the last year, or 30 per cent in constant currency.
The rise in revenue was primarily driven by growth in usage of the company’s 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.
The stock of FPH closed the day’s trading at NZ$36.200 per share on 14th July 2020, up by 1.71% on an intraday basis. The company has a market capitalisation of around $20.809 billion. The stock is trading at a P/E multiple of 71.120x.
Mainfreight Limited (NZX: MFT)
Mainfreight has announced the full-year financial results to March 31, 2020 and there has been a satisfactory improvement on the previous year. However, COVID-19 pandemic had a significant impact, and is expected to affect economic conditions for some time. Without NZ IFRS 16, the revenue stood at $3.095 billion, reflecting a rise of 4.8% and Net profit stood at $156.10 million.
The stock of MFT closed the day’s trading at NZ$41.000 per share on 14th July 2020, up by 0.51% on an intraday basis. The company has a market capitalisation of around NZ$4.128 billion. The stock is trading at a P/E multiple of 25.800x.