The Australian stock exchange has been established to economically assist the investors by bring to together in one market the investors who have the capital and the companies in need of capital in a highly liquid and well regulated market. In this case the companies are assisted to raise capital while the investors are given the chance to create and accumulate their wealth. Investors have a pool of more than 2000 listed companies to invest in. Amcor ltd, APA ltd, amp ltd, ASX ltd, Asciano ltd and Suncorp ltd are some of the companies listed in the ASX; each operates in different market segments. Below are the details of the financial and non financial analysis.
ASX limited (ASX) is listed to help listed companies raise capital. This provides opportunity for investors to create wealth and build it in a transparent and confident manner. Its vital role is to maintain a health Australian economy. It was officially listed at the Australian Securities Exchange on 14 October, 1998 with its industry group as the Diversified Financials. Its securities are identified as ASX, ordinary Fully Paid. The company provides securities exchange services, services on derivatives among other services.
Currently the ASX Ltd shares are trading at $37.60 per share. The volume of the listed shares traded is 370,056 on the last day. This is higher than the volume of shares traded at the period during the last financial year which traded a total of 290,401 at a cost of $36.89 per share. There is an increase in earnings per share (EPS) from 14.9065 to 17.300. However the dividend yield reduced from 5.9400% to 5.200%. It is therefore not advisable that one invest in it. The share price returns for the last three months further reveals that ASX was not performing well as the return which was -0.500 % was low that of the sector and market. Which were 1.2707% and 2.400% respectively. The P/E ratio of the company stood at 17.5 while those of the sector and market 10.9 and 10.2 respectively showed that the stock was not performing hence not a suitable for one to invest. The yield further showed that the company was not doing well. Its yield for the year was 5.1% while that of the sector was 7.2%.this means that the stock was performing below the performance of the sector hence not good for investment.
Asciano Limited (AIO) is a transport infrastructure business focusing on the rail. Pacific Nationals and the Patrick’s are its two portfolios. The two operate and container terminals, export facilities, stevedoring equipment among other related services which they own. The business came to existence in 1888 when Albert Toll founded it. On 1 June 2007, the company got approval by the Supreme Court to be restructured leading to formation of ASX-listed entities Toll and Asciano.
Currently, the company trades at the Australian Securities Exchange (ASX) in the industrials sector. It commands a sizeable amount of the sector having 8.905 percent of the. Its market capitalization is $ 4,696 M an equivalent of 2,926 M shares. Its current share price is $ 1.605 and an average volume of 8,132,106 is traded daily. This share price is below the targeted average share price for the next 12 month that is expected to be $1.929 according to the survey of seven brokers.
According to last year’s financial report the company earnings per share (EPS) was $3.9 up from $ 1.2. This is 225.0 percent increase. Return on earnings (ROE) was up $4.2 to $ 4.6 as compared to the previous year’s $ 0.4. The share performance of the company is good. Its dividend yield is 1.2 % up when compared with the previous year. The shares of the company performed better compared to those of the sector and the market in general. That is, in the last 3 months, the share price returns was up 1.6 % compared to the sector’s -0.2327 %. The P / E ratio for the company was 30.9 while those of the sector and market were 12.7 and 10.2 respectively. This showed that the 9.7 and market’s 11.2. It is worth investing in the company as is performing above the market and sector’s performance. This is seen as its performance compared to the sectors and market’s performance is higher. The EV/EBIT is lower showing that the company was making profit. The company is therefore good for investment.
Amcor Limited (AMC) is a packing company that operates globally in five major divisions in Australia, North America, Latin America, Europe and Asia. The company offers a wide range of plastics, metal, glass and fiber products along with other related services. Amcor Ltd came into existence in 1986 following the restructuring of its mother company APM-Australian Paper Manufacturers. It was until April 2000 that Amcor Ltd was listed at the Australian Securities Exchange and traded under the name PaperlinX limited (PPX). AMC is differentiated from the other companies because of its defensiveness. It sales more than 80% of its products to the pharmaceuticals, food and beverage industries. The other distinguishing factor is its clear strategy to be a top 5 specialty packing company. Its major customers are Nestle, Cadbury, Unilever among other multinational food and beverage companies. These customers normally enter a long term contract of more than three years.
Currently the company trades at the ASX with a market capitalization of $ 8, 43. This is equivalent to 1,225 M shares. The current price per share is $ 6.880 and its report price is $ 16.50. Its dividend yield is 4.900 %. While its earnings per share (EPS) change is 21.800% which is higher than other peer companies. The current broker recommendation is that the price per share is expected to rise to $7.426 in the next 12 months. This means therefore that one can invest in the stock as the future prospects of the company’s shares are high. When compared with peer companies. Its share returns s for the last 12 months is 20.500 while that of the industry (market) is 6.7594 and that of the sector is 19.8362. Due to its dominance in the market, AMC has a market capitalization of $8,370.
The company is worth investing as its yield, 4.6 % is higher than the sector’s 3.4 % and that of the market which is 3.7%. This means is performing fairly higher than the sector and the market. Its EV/EBITDA ratio for financial year 2010 is 8.8 while that of the sector is 21.7 and that of the market is 11.3. This means that earnings of the enterprise are higher and worth compared with the enterprise value. One is advised to invest company performed well. The share yield was 28.9% while those of the sector and market 5.9 and 5.0% respectively. The EV/EBIT for the company is relatively lower at 10.0 compared to that of the sector which is 12.0 and the market one which is 14.2. The EV/ EBITDA on the other hand is also relatively low at 6.2 compared to the sector and market’s which stand at 8.3 and 66.9 respectively. The group is therefore advised to invest in the stock.
AMP Limited is the other company to research on. The company is one of the wealth manager and life insurers in Australia. It is made up of AMP Financial Services, company owning the largest financial planning network in Australia with the leading market shares in a several products and platforms. The company has a stake in AMP Capital Investors a subsidiary of the company and manages funds. Amp acquired Pearl Assurance one of the insurance and financial companies in UK. The company was listed at the ASX in 2001 after it underwent demutualization. Its differentiating factor is the strong brand it enjoys in Australia. It is also the market leader in most of the products it specializes in. Its well-regarded distribution network makes it strong. The company works with financial planners, policymakers as well investors. It also works with companies which choose to work with it in investing in its products.
Currently, the company trades at the ASX with a market capitalization of $11,310 M which is equivalent to $ 2,072 M shares. The current price of the share is $ 5.350 and an average volume of 8,842,433. According to the current broker consensus, it is recommended that an investor should hold the shares as it targeted that the 12 month average price by share is $6.059. The price is expected to fall hence not advisable for investors to invest on the stock. The price is current trading low compared to the other peer company stocks and is speculated that it might further fall due to raising demand for the alternatives stocks.
According to its financial report, it is not recommended that an investor buys the stock. This sis because of the share price returns for the last 3 months is -1.4599%. This value is lower than that of the sector in which the company falls and that of the entire stock market which stand at 0.7889% and 2.5191% respectively. This means the company is performing below the performance of the sector and market. The EPS change of the company stands at 18.7500%. This is relatively low compared to those of the peer companies. It is therefore not recommended that one invests in the stock. Insurance Australia Group (IAG) for instance posted as impressive 80.87% EPS change hence more lucrative to invest in its stock.
The company’s ratio analysis showed further revealed that the company’s stocks were not doing well. For example, the P/E ratio for the financial year 2010 was 18.2. This value was high compared to the sector’s 10.9 and that of the market which stood at 14.6 which means investors were paying higher than expected like the other market stocks. It is therefore not recommend for one invest in the stocks as they are expensive. The yield of the company’s stock for financial year 2009 was 5.0%. This value is lower than what the market was earning in the same year which was 7.5%. The sector’s yield was 7.2% this therefore means the stocks are not performing well at the market and it is not recommended that an investor buys. The EV/EBITDA of the company is lower than that of both the sector and the market in general. It is 0.0 while that of the sector and market is 6.2 and 11.9 respectively. It is therefore not recommended that one buys the stocks are earning less than is suppose to.
APA Group (APA) is petroleum distributing company that comprises of the Australian Pipeline Trust and APT Investment Trust. The company owns the largest gas distribution and storage infrastructure network. Its business is mainly gas transmission and distribution to it main customers the power generating company, industrial and commercial customers. After acquiring AGL’s gas transmission assets the company was listed on the ASX on 13 June 2000. A major differentiating factor is that the company has an effective monopoly in the transportation of natural gas. Though it has no pricing power, it can leverage the volume growth. It major customers are the various mines in Western Australia, AGL and smaller customers in Queensland. Its transmission assets are an essential monopoly though it faces clear and direct competition from Bass Strait Pipeline which terminates in Sydney.
Currently, the company trades at the ASX with a market capitalization of $ 2, 196 an equivalent of 552 M shares. Its current share price is $ 3.980. An average of 989,171 was traded in the last transaction. The stocks trade in the utilities sector and command a 7.1864% of the sector which translates to 0.16115 of the market. According to the company’s financial report, its shares earned $19.4 per share which translates to a EPS change of -5.8%. This is low as compared to previous financial year. However, the dividend per share and the yield are higher than the previous financial year. Its dividend per share is $32.8 while the yield is 8.2. Its ROE is however lower at 9.5 % as compared with the previous financial year which was 9.5%. It is therefore recommended that an investor invests in the stocks.
When compared with the market and sector performance, the stocks are performing fairly higher. Its share price returns for the past twelve months surpassed the market and sector one to close at 24.77% while that of the sector and market was 3.865% and 5.5064% respectively. This means that can profit from the stocks if he or she buys them.
Its P/E ratio further reveals that stocks performed relatively higher as compared with the sector’s performance. It however performed lower when compared with the rest of the market. Its yield is also higher compared with that of the market. The yield of each share was 7.4% compared with that of the market which was 5.0%.EV/EBITDA of the stock further shows that the stocks are performing well as it is lower than that of the sector and market in general. Its EV/EBITDA is 3.5 while those of the sector are 12.8 and 11.3 respectively. It is therefore recommended that an investor invests on the stock.
Suncorp- Metway ltd (SUN) is a financial services conglomerate offering business and retail banking, general insurance and wealth management wealth services. The group is the second largest general, insurer in Australia based in Queensland where it has large regional banking franchise. The group was formed in 1 December 1996 when three financial institutions came together. Suncorp, Metway bank and QIDC (Queensland industry Development Corporation) came together to give birth to this group that offers diversified financial services. The group was listed on 2 June 2000 at the ASX changing its code from SME to SUN. The SUN’s business model makes it unique from other financial service providers. The group provides diversified services, the services rages from traditional banking businesses, general insurance and wealth management products. This diversification allowed the group to sell its products and services to various customer bases ranging from small retails to small and medium businesses. The group also offers personal products to homes, motor, worker compensation along other commercial lines.
Currently, the group is trading at the ASX in the financials sector, enjoying 0.8700% of the market share. The current share price is $8.360. According to the recent recommendation from the broker, any investor to hold as the share price is expected on average to rise to $ 9.826 from the current low of $8.360. According to the group’s financial report, it’s EPS for financial year 2010, is up to 60.8 from 59.7 of the previous year. This translates to a 0. 9 % growth in EPS change. However the yield went down to 4.1 % from 4.7 % in the previous year. Dividend per share (DPS) was also down to $35.54 from $40.00. A further comparison showed that the company performed relatively low compared with the sector and market performance. In the last 3months, the group’s share price returns was -6.3043% while those of the sector were 1.2707% and 2.4631% respectively.
This further analysis reveals that the shares of the group were not doing well and an investor is advised against buying them. The share price returns for the last one year also that the stocks were not doing well as compared to the performance of the sector and market. Its share price return for the one year is -3.1461% while those of the sector and market is -3.0654% and 5.5064% respectively. It is therefore not prudent to invest in this stock. When compared with other peer companies SUN has the highest P/E ratio among the top leading companies in the financial sector. It also offers the lowest dividend yield of 4.2923% while the other peer companies offer more than 5.0% dividend yield. Its yield is 0.0% while those of the sector and market is 7.2% and 5.0%.this means the stock is under performing and one should not buy it. The EV/EBITDA further shows a dangling stock as it is lower than that of the market and sector.
Based on the earnings per share (EPS) and its percentage change, current price share compared against that of the sector and market, dividend per share (DPS), P/E ratio and EV/EBITDA, the group should invest on the shares of APA ltd, Amcor ltd and Asciano ltd as the prospects of the companies are expected to raise. They stocks’ prices are expected to raise in future hence an investor in can profit from this. However a larger share of the investment should be on APA ltd as it recently announced 150% raise in their end of year profits and has finalized plans to acquire its long time rival Delta Pacific ltd. This means that the company performance is expected to increase tremendously.
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