Tag Archives: Agriculture

article 3 months old

The Short Report

By Chris Shaw

The largest changes in short positions for the week from July 10 involved companies both in and out of the top 20 largest short positions, with a fairly even spread between significant increases and decreases in total positions.

Among the increases the two largest were in Henderson Group ((HGG) and Yancoal new shares ((YALN)). Shorts for Henderson rose to 3.61% from 0.83% the week prior, which followed at least one cut to earnings forecasts in the market as lower performance fees are being factored into the outlook for the company.

In Yancoal, short positions in the new shares increased to 3.62% from 0.85%, this as the market positions itself in the newly-listed coal play that was created by the merger of Yancoal of China and Australia's Gloucester Coal. While growth options appear reasonable, the major issue for the market appears to be high debt levels and a small free float of shares.

While the ramp-up of the Boseto project continues, earnings forecasts for Discovery Metals ((DML)) were cut modestly after the group's June quarter production report. For the week from July 10 short positions in the stock rose to 5.25% from 3.63%, likely reflecting some concerns with respect to the ramp-up process.

With respect to falls in short positions, the largest was in Mesoblast ((MSB)) where total positions declined to 3.65% from 6.46%. The latest news of note was some positives from a competitor's stem cell tests for heart attack victims, which is thought to be a positive for Mesoblast's own cardiac therapy.

In Iluka ((ILU)), which is one of the top 20 short positions in the market, the week from July 10 saw total shorts fall to 7.96% from 9.94%. The change in positions came after the company's quarterly production report, which was seen as broadly in line with expectations given it came just a few days after sales guidance for the year had been lowered.

Companies making up the top 20 short positions continue to be centred on certain sectors, with consumer discretionary plays leading the way. Among the largest positions are JB Hi-Fi ((JBH)), Harvey Norman ((HVN)), Flight Centre ((FLT)), Billabong ((BBG)), Carsales.com ((CRZ)) and Myer ((MYR)).

Building materials and associated stocks are also well represented given CSR ((CSR)), Boral ((BLD)) and GWA ((GWA)) all make the top 20, while resource stocks in the list include Paladin ((PDN)), Iluka and Alumina Ltd ((AWC)).

Shorts in St Barbara ((SBM)) fell to 2.51% from 3.75% leading into the company's quarterly production report, which was helped by better volumes and gold grades. Operational improvements at the Allied Gold assets remain an key variable for investors in St Barbara.

Dexus ((DXS)) enjoyed a fall in shorts to 0.27% from 1.27% the week before, this leading into next month's profit result where any strategic review announcements are likely to be of interest to the market.

In terms of monthly changes in positions for the period from June 15, it was Henderson Group and Discovery Metals that again led the way with increases of just over three percentage points and two percentage points respectively.

The next largest increases were in Alumina Ltd, where positions rose to 6.31% from 4.49% in the month and in Flight Centre, where positions have increased to 13.68% from 11.93% in the same period.

The discretionary retailers are among those where short positions have fallen the most for the month from June 15, with Myer's positions declining by more than four percentage points, David Jones ((DJS)) seeing a better than three percentage point decline and JB Hi-Fi's positions declining by just over 2.5 percentage points.

Shorts in Mesoblast and in Echo Entertainment ((EGP)) also declined by more than 2.5 percentage points over the month.

One increase in short positions over the past month of interest to RBS Australia has been in Nufarm ((NUF)), where positions have increased from less than 2.2% to more than 2.5%. In the view of RBS the stock needs earnings upgrades to deliver further share price gains, something considered unlikely given a tough operational environment at present. RBS Australia rates Nufarm a Hold at present, while the FNArena database shows one Buy rating, three Hold recommendations and three Sell ratings.

 

Top 20 Largest Short Positions

Rank Symbol Short Position Total Product %Short
1 JBH 20487424 98850643 20.73
2 FLT 13684263 100047288 13.68
3 FXJ 296687617 2351955725 12.61
4 CRZ 26390913 233689223 11.29
5 LYC 183100463 1715029131 10.68
6 COH 5693525 56929432 10.00
7 BBG 39755323 410969573 9.67
8 HVN 100515552 1062316784 9.46
9 GNS 75429555 848401559 8.89
10 CSR 44148544 506000315 8.73
11 PDN 71314995 835645290 8.53
12 ILU 33334008 418700517 7.96
13 MYR 46393558 583384551 7.95
14 LNC 39399260 504487631 7.81
15 WTF 15613320 211736244 7.37
16 TRS 1876854 26071170 7.20
17 DJS 36703400 528655600 6.94
18 AWC 153868681 2440196187 6.31
19 BLD 45219326 758572140 5.96
20 GWA 17781381 302005514 5.89

To see the full Short Report, please go to this link

IMPORTANT INFORMATION ABOUT THIS REPORT

The above information is sourced from daily reports published by the Australian Investment & Securities Commission (ASIC) and is provided by FNArena unqualified as a service to subscribers. FNArena would like to make it very clear that immediate assumptions cannot be drawn from the numbers alone.

It is wrong to assume that short percentages published by ASIC simply imply negative market positions held by fund managers or others looking to profit from a fall in respective share prices. While all or part of certain short percentages may indeed imply such, there are also a myriad of other reasons why a short position might be held which does not render that position “naked” given offsetting positions held elsewhere. Whatever balance of percentages truly is a “short” position would suggest there are negative views on a stock held by some in the market and also would suggest that were the news flow on that stock to turn suddenly positive, “short covering” may spark a short, sharp rally in that share price. However short positions held as an offset against another position may prove merely benign.

Often large short positions can be attributable to a listed hybrid security on the same stock where traders look to “strip out” the option value of the hybrid with offsetting listed option and stock positions. Short positions may form part of a short stock portfolio offsetting a long share price index (SPI) futures portfolio – a popular trade which seeks to exploit windows of opportunity when the SPI price trades at an overextended discount to fair value. Short positions may be held as a hedge by a broking house providing dividend reinvestment plan (DRP) underwriting services or other similar services. Short positions will occasionally need to be adopted by market makers in listed equity exchange traded fund products (EFT). All of the above are just some of the reasons why a short position may be held in a stock but can be considered benign in share price direction terms due to offsets.

Market makers in stock and stock index options will also hedge their portfolios using short positions where necessary. These delta hedges often form the other side of a client's long stock-long put option protection trade, or perhaps long stock-short call option (“buy-write”) position. In a clear example of how published short percentages can be misleading, an options market maker may hold a short position below the implied delta hedge level and that actually implies a “long” position in that stock.

Another popular trading strategy is that of “pairs trading” in which one stock is held short against a long position in another stock. Such positions look to exploit perceived imbalances in the valuations of two stocks and imply a “net neutral” market position.

Aside from all the above reasons as to why it would be a potential misconception to draw simply conclusions on short percentages, there are even wider issues to consider. ASIC itself will admit that short position data is not an exact science given the onus on market participants to declare to their broker when positions truly are “short”. Without any suggestion of deceit, there are always participants who are ignorant of the regulations. Discrepancies can also arise when short positions are held by a large investment banking operation offering multiple stock market services as well as proprietary trading activities. Such activity can introduce the possibility of either non-counting or double-counting when custodians are involved and beneficial ownership issues become unclear.

Finally, a simple fact is that the Australian Securities Exchange also keeps its own register of short positions. The figures provided by ASIC and by the ASX at any point do not necessarily correlate.

FNArena has offered this qualified explanation of the vagaries of short stock positions as a warning to subscribers not to jump to any conclusions or to make investment decisions based solely on these unqualified numbers. FNArena strongly suggests investors seek advice from their stock broker or financial adviser before acting upon any of the information provided herein.

Technical limitations

If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.

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article 3 months old

Weekly Broker Wrap: Oz Equities And Scarce Global Grain

By Andrew Nelson

Last week a few more Australian analysts switched their focus to the intensifying drought situation in the US and its impact on global grain crop supplies.  Global mining capex was also examined as well as domestic pharmaceutical distributors, with a few strategic ideas for an investor's portfolio.

The continuation of extreme drought conditions in America’s grain belt is beginning to devastate US agricultural production prospects, with crops now withering in the field. In response, global grain prices have soared by more than 50% since June as global supplies contract.

The situation has now seen the Commonwealth Bank sharply raise its global grain price forecasts, with the bank noting higher prices are needed in order to ration demand.  CBA Agri Commodities analyst Luke Mathews notes US corn prices have spiked 60% since June, posting record highs along with US oilseed prices late last week.

CBA notes production estimates for this year’s US corn crop have already been cut to 12.97bn bushels by the USDA, below the previous record low estimate of a 14.8bn bushel crop. Matthews believes yield estimates will be cut even further given the ongoing drought and expects US corn output of 12.22bn bushels, which is 6% below current USDA estimates.

Thus, the US corn crop has become a global issue, as the nation contributes 38% to world output, with the US also responsible for nearly half of global corn exports. As evidence, Matthews cites NSW wheat futures on the ASX, which have jumped $70/t to $310/t over the past month, with Matthews noting that soaring grain prices have begun to stir up some serious concerns about global food price inflation. Simply put, a US corn shortage means a global grain shortage.

Making matters worse are production issues in other parts of the world. CBA notes South American corn and soybean crop production has been cut due to poor conditions early this year , while global wheat  production for 2012/13 has fallen by 37 million tonnes year-on-year, mostly because of adverse growing conditions.

Because of the crop shortages, CBA reckons another 6.4 million tonnes of US corn is going to have to be rationed in the US livestock, ethanol and export markets. Matthews points out this is on top of the 26.6 million tonnes of rationing that the USDA has already forecast in its July report. Yet even with significant demand rationing, CBA expects US grain supplies will fall to record low levels in 2012/13. The run in corn prices has in turn pushed US wheat prices 50% higher over the same period.

As a result of all of this, CBA has raised its global grain price forecasts. ASX NSW wheat futures are now forecast to average $290/t in H1 2012 and $270/t in H2 2013, before falling below $250/t by December 2013 on an expected improvement in global grain supplies in H2 2013.

Analysts at UBS have taken a look at the US drought from another perspective, the impact it is having and will likely continue to have on crop insurers.  The broker notes that things are about as bad now as they were in 1988, when 50% of US corn was classified as poor.  Right now, only 38% of corn is classified in poor or very poor condition, but this is expected to get worse.

While UBS sees a pretty good chance for some very big crop losses in the US, given the structure of the US crop insurance program, which includes government reinsurance, it doesn’t expects to see the losses stemming from the drought as being significant for US crop insurers, of which Australia's QBE ((QBE)) is the third largest.

Under the broker’s worst case scenario, the ongoing US drought would reduce QBE’s FY12 EPS by up to 5% on a stand-alone basis. However, the broker believes the company possesses adequate headroom within its current large loss allowances to absorb this. Thus at this point, there is no impact on UBS’s forecasts.

That’s all on the US drought, for now.

Deutsche Bank sees some signs of a possible rebound rally for Australian equities building towards the end of 2012. The broker notes a few factors to support its view:

It believes economic surprise indices are close to a trough, meaning the possibility of less drag on risk assets; leading indicators for China and the US are turning more positive, which could support faster growth towards year end.

However, the broker also sees a few things that could stymie this late year upswing like the fact equities have held up fairly well so far given the circumstances mean they are vulnerable to negative data flow. European issues could also remain a drag, depressing markets that otherwise may have begun to reverse.

As far as industrial stocks go, the broker thinks EPS growth forecasts are probably still too high, although it still sees scope for modest earnings growth as the rate of writedowns slows. Deutsche notes cyclical stocks are around 14% cheaper than defensives, but with reporting season likely to disappoint and to see FY13 numbers trimmed, the broker predicts cyclicals may stay cheap a little while longer.

Falling commodity prices have kept a lid on the share prices of miners for the most part, but with China’s two most-forward looking lead indicators pointing to a solid pick-up in growth by year-end, the broker sees an improving chance of a substantial rally in resource stocks.  This is especially so given domestic investors are very overweight banks right now, which could see a run to cheaper resource stocks later in 2012.

The local equities outlook from Citi is similarly positive, with the current spate of policy easing underway in China likely to assist FY13 earnings growth in Australia, providing at least the potential for the ASX/200 to move up to Citi’s revised forecast of 4450 by end year. Citi’s previous forecast was at 4750, but the broker expects troubles in Europe to flare up again this year, so market volatility will probably continue.

Here’s the rub. If China doesn’t soon change course and the landing is much harder than expected, Citi thinks there’s a chance that we’ll see a major recession in Australia. The broker envisions a dominos scenario, where a falling China asks questions about some vulnerable areas like housing, the banking sector, etc.

Another issue facing Australian markets is that it is seen by many as being ex growth, given healthy employments levels and the benefits from high commodity prices. And while the broker agrees to some extent, it sees good chance for at least some moderate levels of growth.

Citi has also conducted a survey among global mining and construction firms and this has raised some red flags. The broker notes that around 25% of participants are considering lowering future capex budgets. Citi is now forecasting a 10% decline in mining capex in 2013, with construction capex to remain flat for the next 12 months.

Our last topic concerns Australian pharmaceutical distributors. In Goldman Sach’s view they could be in for a bit of trouble given the Pharmaceutical Benefits Scheme for statin drugs could be cut by up to 25% from December 2012. If it were to occur, the broker estimates PBS outlays could decline by about 2.5%, with the price cuts likely to reduce pharmacist profits.

For Australian Pharmaceutical Industries ((AP)) and Sigma Pharmaceuticals ((SIP)) a reduction in the value of Crestor and the generic alternatives to Lipitor would be negative, although cuts to Lipitor would have no impact given Pfizer distributes it directly to pharmacists. Small EPS cuts ensure for both stocks.

Deutsche also weighed in on the topic, agreeing a cut to Lipitor pricing will have limited impact on the wholesalers, while Crestor was already expected to face generic competition later in the year, thus a cut in some ways was already figured into the broker’s expectations. Yet while the broker sees limited direct impact on Sigma and API, it does note the pressure on other parts of the value chain will eventually feed through to more pressure on wholesalers.

 

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article 3 months old

Grains: Weather Or Not

By Jonathan Barratt
 
We continue to monitor the dry weather in the US. The main reason for this is the US is now the main purveyor of surplus exports of grain to the world. Any concerns here will have an important impact on the prices for grains and generally for food inflation around the world. Its not a pretty sight as the drought is now the worst seen since 1956.
 
Corn prices since 1st June are up 44%, wheat up 45% and soybean prices are at record contract highs. The market remains focused on the potential for rain in the mid west US, however as time marches on the chances of a recovery in yield also diminishes exponentially. The USDA has revised world coarse grain-ending stocks for 2012/13 to 12% lower than the predications at the beginning of the year.
 
Corn      
 
Corn looks to be treading water trading just 20 cents off its most recent highs. The fact that the market has absorbed any profit taking suggests we have an overly anxious market. According to recent USDA quality reports, new season quality has dropped the most in 10 years and only 31% is rated as good to excellent. Technically, after a rally close to 44% since the beginning of June the market is consolidating.
 
We expect to see a push to the topside to either confirm a high or see it march on to new highs. Momentum indicators look toppy, however have not confirmed an extension to any consolidation. 
 
 

Wheat
 
A similar story for wheat unfolds. It is hoped that current weather cycles are showing more favorable results however this needs to be consolidated with some decent falls. One of the emerging issues is that since the 2011 drought in China, the world’s largest producer has curbed supply and ending stocks. Keep an ear out for any wheat import orders coming to China, as this this will be a sign of diminishing supplies.
 
Technically, we are trading at highs not seen since Feb 2011. Expect some resistance here before prices trade higher; we still have a way to go before prices reach the all time high of Feb 2008 at US1334.
 
 
 

Soybean
 
Remains on contract highs. The high in Jul 2008 was US1730; we are currently trading at US1630 having been as high as US1680. It’s very hard to trade these markets at the moment. You need very wide stops. We do not have any positions. 
 
 
 
Produced by Jonathan Barratt direct from the trading desks of Commodity Broking Services, Barratt's Bulletin provides expert analysis of commodity markets, global indices and foreign exchange movements. Click here to take a no obligation 21-day trial to Barratt's or to learn more visit www.barrattsbulletin.com. Content included in this article is not by association necessarily the view of FNArena (see our disclaimer).

This report is not, and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, products, securities or investments. This report does not, and should not be construed as acting to, sponsor, advocate, endorse or promote products or any other products, securities or investments. This report does not purport to make any recommendations or provide any investment or other advice with respect to the purchase, sale or other disposition of products, securities or investments, including, without limitation, any advice to the effect that any related transaction is appropriate for any investment objective or financial situation of a prospective investor. A decision to invest in securities or investments should not be made in reliance on any of the statements in this report. Before making any investment decision, prospective investors should seek advice from their financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision.

 

article 3 months old

Weekly Broker Wrap: Retail, China And A US Drought

By Andrew Nelson

It is again time for us to take our pick of a few important topics that local broker’s covered last week, but with a slight departure this time. Along with a skim of domestic sectors and economic trends, this week we also look at what could be an increasingly important topic, the onset of drought in the US.

Canadian industry newsletter Agriweek reports the proportion of the US experiencing what are deemed exceptional drought conditions by the US Drought Monitor system have reached the highest level in the history of the program.  The report notes that almost 20% of the entire land area of the lower 48 states has now been classified as being under extreme or exceptional drought. What’s worse is that 12% is in the exceptional category. 

Given the backdrop, last week’s monthly supply-demand report from the US Department of Agriculture was highly anticipated, especially given the deterioration in corn and soybean conditions in the high-production states that were previously holding their own. The report showed that American crops are now far into crop failure territory, with markets sitting on top of a new price plateau.

Corn yield and crop forecasts were cut by more than 10%, although cuts to demand and use forecasts means there will still be a crop carry-over in a season of a major crop disaster. 2012-13 price estimates were also lifted to a level that is hoped will adequately ration demand. Agriweek notes the projected 2012-13 prices add up to corn futures prices pushing past US$7 a bushel.

All up, the latest reports point to increasing supply tightness to near-shortage conditions for 2012-13. Agriweek points out that there is a strong tendency for successive USDA monthly yield estimates to continue to decline for the remainder of the growing season when an early trend to lower figures is established. Thus, prices will have to stay high or rise even higher to bring about the type of demand rationing that now seems required, especially given the chance of even worse conditions.

Back to closer shores, analysts at Morgan Stanley have lowered their outlook for Australian retailers on the back of signs of accelerating deflation last quarter. The broker expects both Woolworths ((WOW)) and Coles ((WES)) to report weaker 4Q like for like sales growth.

Woolworths boasted prices that were around 11% higher than Coles in the previous period. However, Morgan Stanley notes Woolworths prices were actually 5% lower than Coles across the 4Q11, so higher price deflation for Woolworths is expected to be seen in 4Q12.

The good news is the broker expects deflation to ease over the course of this year, with supermarkets to begin cycling over more normalised fresh food prices from next quarter onwards.

Citi also sees some issues for retailers' floor space issues. The broker notes that while retail share prices have in many cases halved, retailers are as yet to begin rationalising floor space. Citi expects a shakeout is likely over the next three years as cost growth continues to outpace sales growth.

What’s worse, the broker doesn’t expect to see stronger retail demand as being likely to fuel margin recovery any time soon, leaving Citi to think price deflation and online sales will continue to limit bricks and mortar growth. On the broker numbers, non-food retailers will need to cut floor space by 10% or more before margins can begin to recover. The broker thinks such a move would take 3-5 years to play out given lease terms. However, a backdrop of store rationalisation and margin pressure will continue to weigh on share prices amongst retailers.

Citi believes the stocks that are most vulnerable are Harvey Norman ((HVN)) and JB Hi-Fi ((JBH)) and thus downgraded them both to Sell last week. Few retailers escape the negative prognosis, although the broker points out that some value plays like Billabong ((BBG)) and Specialty Fashion ((SFH)) are already reflecting store rationalisation in their share price. 

Macquarie notes the Chinese government has started to take action to head off weakening conditions, but it wonders will it be enough to reinvigorate commodities demand?

The short answer is yes. The broker does think the demand for commodities from infrastructure will be stronger in the second half. Although, Macquarie cautions a broader based recovery will take time given confidence levels are low.

Thus Macquarie sees current issues as being about confidence as much as they are about GDP levels. In fact, the broker thinks forecasted GDP growth of  7.5% for this year will be easily achieved, even without a substantial improvement in economic activity. The broker notes that GDP growth is not an end in itself and that while some data are admittedly weak, there are others that have remained stable.

According to Macquarie, data on employment levels and wage growth actually indicate an economy in good health. Thus, stimulus from Beijing isn’t as urgent as many of us have begun to believe. The broker thinks policy will to continue to be aimed at addressing slowing growth rather than trying to bring about some sort of rapid turnaround in economic activity.

In such an environment, the broker likes copper better than iron ore over the next few months given copper is more leveraged to an increase in infrastructure spending, while there is also a distinct lack of copper scrap. That’s not to say Macquarie is turning bearish on iron ore, it simply sees few near term catalysts that could lead to a price breakout. At least not until confidence returns and a broader based recovery takes off.

Last week saw UBS reaffirm its preference a little towards risk in the materials sector given yield is emerging as a sector share price driver.

CSR ((CSR)) estimates were cut last week on soft aluminium spot price and weak Australian housing numbers, yet current estimates for Boral ((BLD)) and Fletcher Building ((FBU)) assume an unlikely improvement in end markets with a positive impact from cost cutting over the next two years.

Given an Australian housing recovery over the next two years is far from a given and the prospect of both US and NZ recoveries are at best debatable, the broker believes there is less earnings risk in the latter two stocks than in CSR. In fact, even allowing for a decline in the CSR dividend the broker expects a yield of 7.3%.

Otherwise, only Adelaide Brighton ((ABC)), Fletcher Building and James Hardie ((JHX)) are expected to boast FY14 yields of better than 5%. Boral is below, seeing the broker apply a 20% valuation discount, although keeping it at Buy. CSR and Fletcher are also at Buy, while James Hardie and Adelaide Brighton are at Hold. As you can see, this is far from a negative stance on the sector.

All in all, UBS’s notes its recommendations have tended to run opposite to share price performance over the past few years and reflect a bias towards leverage over safety. The sector stance remains risky, however, with Australian and US housing starts needing to improve.

RBS took a look at major healthcare stocks last week noting that while global uncertainties and FX tailwinds have  underpinned outperformance in the sector and will likely continue to lend support going forward, the broker expects to see moderating growth rates, increasing earnings pressure and underwhelming valuations sector wide.

The broker last week downgraded Sonic Healthcare ((SHL)) and Ansell ((ANN)) to Hold, given the above along with the risks associated with austerity measures in Europe and lacklustre valuations. However, Ramsay Healthcare ((RHC)) was upgraded to Hold given the belief current trading levels are discounting earnings risk from private health insurance means-testing by far too much.

RBS sees the most upside in Primary Healthcare ((PRY)) evidence of improving operational metrics and GP productivity, which it notes should help to allay concerns about GP acquisition costs and churn rates. Otherwise, given the risks of unstable global economic conditions, volatile FX and ongoing worldwide regulatory changes, the broker thinks it might be a good idea to opportunistically take profits on any sign of market stabilisation in stocks that have outperformed of late. Ramsay, Resmed ((RMD)) and CSL ((CSL)) are the first stocks that come to the broker’s mind.

 
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article 3 months old

Global Food Price Inflation Risks Rising Again

 - CBA notes global food price inflation appears to be picking up
 - Increases imply additional downside risks for growth
 - Australia better placed than some given role as major exporter
 - Domestic economy unlikely to avoid some impact

By Chris Shaw

Global food price inflation was a major theme in the first half of 2011 but an improvement in supply conditions and the emergence of other issues saw the problem fade from the headlines in the second half of last year.

But as Commonwealth Bank notes, the inflationary pressures that emerged last year saw policy tightening in a number of economies and this impacted on economic activity levels. Given this impact, the bank's chief economist, Michael Blythe, suggests the recent lift in key food prices is a concern.

Prices for both grains and oilseeds spiked higher in June and have moved even higher in July given some weather-induced supply issues. Drought is the main issue in most key exporting regions, with growing risks to US crop production a particular concern in the view of Blythe.

For major crops most of the demand growth is coming from China and other emerging and developing economies, which Blythe points out means they will bear the brunt of any sustained lift in prices for staple products.

Any shortage of corn and soybeans could impact on global trade flows, while Blythe notes input cost pressures would likely rise for livestock producers and food and beverage manufacturers would face some margin pressures under such a scenario. Consumption patterns would also change on the back of relative price shifts.

Europe remains the main point of focus for policymakers around the world and Blythe suggests central banks tend to look through supply-driven price spikes when setting policy. But given the importance of food in CPIs around the world, Blythe cautions there may be limited scope for monetary stimulus if required. This means higher food prices would offer some downside risk to global economic growth.

There are other impacts from higher food prices, as Blythe notes spikes in prices are often followed by periods of above average civil conflict. Such instability is likely to further weigh on already depressed financial market sentiment in the view of Blythe.

The Australian economy would not be immune, as any restraints on Asian economic activity would be a negative for Australia's growth outlook. As well, any global financial market impact would be reflected in the Australian market. 

But Blythe sees some key differences as well, stemming in part from the fact Australia is a major agricultural producer. This means domestic supply should remain solid, so limiting the inflation impact of any global production shortfalls.

Higher food prices would also benefit Australia as a major exporter, though Blythe notes the impact would be much less than for higher resources prices. As an example, Blythe estimates a repeat of the 20% per annum rise in food prices in 2010/11 would be worth around $6 billion in additional export income annually.

On the negative side, Blythe suggests higher food prices would likely lift consumer inflation expectations. Cost of living remains a major issue for households, so higher fuel prices could also weigh on sentiment and spending appetite.
 

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article 3 months old

The Overnight Report: Off And Running

By Greg Peel

The Dow closed down 36 points or 0.3% while the S&P lost 0.2% to 1352 and the Nasdaq fell 0.2%.

Alcoa reported after the NYSE close last night and in so doing unofficially marked the beginning of the US June quarter earnings report season. In reality while Alcoa is the first Dow stock to report, 25 of the S&P 500 companies have already reported for a net 9% earnings growth. Those same companies reported 15% growth for the March quarter and 72% of the 25 have downgraded September quarter guidance.

It's not a particularly good omen but it's a long way to go. Alcoa posted a slight beat that sees its share price up 0.1% in the after-market, although Alcoa is by no means considered a market bellwether. Heading into the season we've seen a lot of guidance and analyst forecast downgrades as an adjustment to Europe in recession, China slowing and US economic data revealing less inspiring results than were prevalent in the March quarter. The question is have expectations become too pessimistic? If so, we might see lots of “upside surprise”. March quarter expectations had been lowered substantially in comparison to December, and by too much at the end of the day.

The big problem for US companies in the June quarter has been the strength of the US dollar, which has gained a lot of ground on the weakened euro, largely commencing when the first Greek election came in as a stalemate. In past quarters it has been those companies with a significant proportion of offshore revenues, particularly from emerging markets, which have outperformed. The stronger dollar acted as a revenue dampener over June. However, on the flipside we've seen much lower oil prices, which should have provided broad market cost relief.

We can but now wait and see, and with Alcoa in the bag we have to wait to the end of the week before the big banks take centre stage.

In the meantime, we've pain in Spain again. Last night the Spanish ten-year bond yield rose another 20bps to reach 7.03% – above the line in the sand considered the point of no return, and of sticking one's hand out for bail-out funds. It's not the first time the yield has hit 7% recently, but with everything Europe has thrown at its problems in the interim, we're still here. The EU finance ministers will meet tonight to yet again address the issue, with expectations Spain will be granted a time extension on its budget deficit reduction requirement.

If the money's still leaving Spain where's it going? Well that's not hard to figure out. The US ten-year yield was down another 3bps to 1.51% but back on the continent history was made when both France and Germany auctioned six-month bills last night and both settled at a slightly negative yield. These are nominal rates, not real rates adjusted for inflation. Investors are so concerned about losing their wealth they will lend short-term money to France and Germany and pay for the privilege.

At the very least we can look forward to the US earnings season as providing a welcome distraction from the broken record that is Europe.

Yesterday we learnt that China's CPI inflation rate eased to a lower than expected 2.2% in June from 3.0% in May. While this should provide room for Beijing to ease policy further, we already had a surprise PBoC rate cut last week. It was a surprise because it came so quickly after the June rate cut, and yesterday's data provides the first clue as to why Beijing decided to move so quickly. Friday's GDP release may provide another.

Inflation may be easing rapidly in China but there will be some consternation as global benchmark soft commodity prices continue to go through the roof as the US midwest descends into apparent drought. It's great news for Australian farmers as the wheat price soars, assuming the local harvest meets no hurdles. It's not, however, good news for central banks looking to further devalue currencies in another global stimulus push as such devaluation by default will raise commodity prices further, albeit many central banks choose to ignore food and energy prices for policy purposes.

Speaking of energy, Norwegian offshore oil workers have now been on strike for three weeks over pay and pension demands. Negotiations on Sunday failed to reach a compromise and so Norway will begin to shut down oil production as of tonight. The news had Brent jumping US$2.39 to US$100.32/bbl last night, dragging up West Texas by US$1.30 to US$85.75/bbl.

The US dollar index was down 0.2% to 83.13 last night which also assisted commodity prices, sending base metals all up around a percent. Gold rose US$4.20 to US$1588.00/oz and the Aussie is steady around US$1.0206.

The SPI Overnight gained 5 points.

Local traders will be keeping an eye out today for the release of China's June trade balance, while NAB will release the results of its latest monthly business sentiment survey. US results will roll in again tonight, but things don't really start hotting up till next week.

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article 3 months old

Grain Prices Skyrocket

By Jonathan Barratt
 
The dry weather over two-thirds of the growing areas in the US looks set to continue and with this the prospect of changed crops conditions will see prices paid continue to trade higher. The expected rainfall from last week failed to materialize into substantial falls and with this we saw wheat and corn trade to a 9-month high and the front month for Soybeans trade to 4.5-year highs. This is relatively critical not only for the US but also for those countries that import food stuffs from the US. 

The US is the world's largest corn exporter and outside the EU is the largest wheat exporter. In soybeans it has just pipped Brazil as the number one exporter due to recent weather events in South America. The market will be closely focusing on the Food and Agricultural Organization's  (FAO)  “Food Index” for signs that prices are on the march higher. In June, the index fell a few points to 204, however the concern is that with the dry spell in the US continuing that prices paid for Corn, Wheat and Soybeans will have inflationary aspects that we will need to deal with. The index peaked 235 in February 2011 and the next reading is on the 5th July.   The market has been complacent throughout the year as the forecasts for the size and quality of crops in the US have been extraordinary good.
 
Corn      
 
The dry weather for corn continues in the mid west and the USDA has just released its forecast on the current corn crop conditions. The index has dropped a further 8% from last week and so far it is 29% off the forecasts from the beginning of the year. In addition, Cropcast has reduced the corn yields down 3.3 bushels per acre. As it stands we are not going to have a bumper crop as anticipated in fact quiet the opposite. Technically, we have reached the target of US645,  if you are not long it is hard to get in at these levels . Look for a dip back to the US615-25 support level. Remember to place a stop as all it takes is a few rain events to see trader’s cash in. 

 
 
 

Wheat 
 
As we mentioned last week, potential downgrades in in China and lower yields in the US will keep prices well bid. This rhetoric remains intact this week. In addition to this we continue hear reports that supply targets will not be meet in the Black Sea region. In addition to this, as corn prices continue to surge, we expect demand in the use of wheat for feed to increase. This would also be supportive the complex. The technicals are building up for a big move, which ultimately could see US800. The only safe place for a stop is US625. If this is too far then it will have to come down to preferred money management techniques.

 
 

 
 
Soybean
 
“We anticipate that the highs of US1500 will be tested again”. This has occurred and with the USDA downgrading soybean conditions again the dry spell will affect yields. Cropcast has also reduced its production forecast per acre by 0.6%.  Technical as long as we can stay above US1500 then further gains can be had. Keep an eye on US1470 as this is the current bifurcation point.

 
 
 
 
 
Produced by Jonathan Barratt direct from the trading desks of Commodity Broking Services, Barratt's Bulletin provides expert analysis of commodity markets, global indices and foreign exchange movements. Click here to take a no obligation 21-day trial to Barratt's or to learn more visit www.barrattsbulletin.com. Content included in this article is not by association necessarily the view of FNArena (see our disclaimer).

This report is not, and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, products, securities or investments. This report does not, and should not be construed as acting to, sponsor, advocate, endorse or promote products or any other products, securities or investments. This report does not purport to make any recommendations or provide any investment or other advice with respect to the purchase, sale or other disposition of products, securities or investments, including, without limitation, any advice to the effect that any related transaction is appropriate for any investment objective or financial situation of a prospective investor. A decision to invest in securities or investments should not be made in reliance on any of the statements in this report. Before making any investment decision, prospective investors should seek advice from their financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision.

 

article 3 months old

The Short Report

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By Chris Shaw

Changes in short positions for the week from June 5 showed a clear division, as while no stock saw increases of more than one percentage point there were a number of companies for which total shorts declined by more than two percentage points.

The largest decline was in Nexus ((NXS)), where shorts fell to 0.15% from 9.59% previously. The fall in positions came following news commercial arrangements for the Crux Field have been expanded to include some earlier development concepts.

The next largest decline in shorts was in Tishman Speyer ((TSO)), where positions declined to 0.01% from 5.92% previously. This reflects the upcoming de-listing of the group following the distribution of US asset sale proceeds to shareholders and a winding up of the company.

Shorts in Sundance Resources ((SDL)) fell to 0.6% from 2.6% the week prior as the company completed a placement of $40 million in new shares to further develop the Mbalam project, while shorts in Elders ((ELD)) fell to 3.31% from 5.45% following news Ruralco Holdings ((RHL)) acquired a 10.1% strategic stake in the company. Ruralco has indicated it has no current intention to make a takeover offer for Elders.

With no major increases in short positions the largest short interests among ASX-listed stocks continue to be dominated by companies with exposure to the consumer discretionary sector. This includes the likes of JB Hi-Fi ((JBH)) Billabong ((BBG)), Myer ((MYR)), David Jones ((DJS)) and Harvey Norman ((HVN)).

Others in the top 20 include Lynas Corporation ((LYC)), Iluka ((ILU)) and Paladin ((PDN)) among the resource sector and industrials such as gaming group Echo Entertainment ((EGP)), building materials play CSR ((CSR)) and biotech Mesoblast ((MSB)).

With respect to monthly changes in positions for the period from May 11, the largest increases were in Linc Energy ((LNC)) and Myer ((MYR)) at just over two percentage points each. Linc has seen little in the way of news since replying to an ASX price query that targets for FY12 were expected to be met, while a recent investor day from Myer left brokers with the view sales growth remains an issue for the company.

Among the largest falls in short positions for the month were Spark Infrastructure ((SKI)), where AGM commentary included news of some management changes and some strategic changes designed to simplify the group's structure.

Bradken ((BKN)) enjoyed a fall in shorts to 1.73% from 4.94% as the market completed the adjustment to earlier news of some issues in the group's rail division, while shorts in Echo fell to 6.36% from 8.93% as the market adjusted expectations to reflect a trading update in the period.

Shorts in Mirabela Nickel ((MBN)) fell for the month to 3.11% from 5.13%, this as the market factored in a $120 million capital raising that should help put to rest investor fears with respect to the state of the group's balance sheet.

As noted by RBS Australia, shorts in Coca-Cola Amatil ((CCL)) have risen over the past month by more than 0.5 percentage points to more than 1.6%. In the broker's view this reflects the fact the stock is fully valued at current levels, even allowing for what is regarded as a strong medium-term growth profile.

 

Top 20 Largest Short Positions

Rank Symbol Short Position Total Product %Short
1 JBH 23973358 98850643 24.26
2 MYR 72378948 583384551 12.39
3 CRZ 28135705 233689223 12.03
4 FLT 11716554 100039833 11.71
5 COH 6508795 56929432 11.40
6 FXJ 257845008 2351955725 10.97
7 DJS 57428510 528655600 10.83
8 LYC 182432879 1714846913 10.61
9 HVN 102459626 1062316784 9.62
10 BBG 24772467 257888239 9.60
11 ILU 38033593 418700517 9.07
12 PDN 75531506 835645290 9.03
13 GNS 74495950 848401559 8.77
14 CSR 38615647 506000315 7.63
15 WTF 15548636 211736244 7.34
16 ISO 413769 5703165 7.26
17 LNC 35079085 504487631 6.94
18 EGP 43684076 688019737 6.36
19 MSB 17992548 284478361 6.32
20 TRS 1570006 26071170 6.01

To see the full Short Report, please go to this link

IMPORTANT INFORMATION ABOUT THIS REPORT

The above information is sourced from daily reports published by the Australian Investment & Securities Commission (ASIC) and is provided by FNArena unqualified as a service to subscribers. FNArena would like to make it very clear that immediate assumptions cannot be drawn from the numbers alone.

It is wrong to assume that short percentages published by ASIC simply imply negative market positions held by fund managers or others looking to profit from a fall in respective share prices. While all or part of certain short percentages may indeed imply such, there are also a myriad of other reasons why a short position might be held which does not render that position “naked” given offsetting positions held elsewhere. Whatever balance of percentages truly is a “short” position would suggest there are negative views on a stock held by some in the market and also would suggest that were the news flow on that stock to turn suddenly positive, “short covering” may spark a short, sharp rally in that share price. However short positions held as an offset against another position may prove merely benign.

Often large short positions can be attributable to a listed hybrid security on the same stock where traders look to “strip out” the option value of the hybrid with offsetting listed option and stock positions. Short positions may form part of a short stock portfolio offsetting a long share price index (SPI) futures portfolio – a popular trade which seeks to exploit windows of opportunity when the SPI price trades at an overextended discount to fair value. Short positions may be held as a hedge by a broking house providing dividend reinvestment plan (DRP) underwriting services or other similar services. Short positions will occasionally need to be adopted by market makers in listed equity exchange traded fund products (EFT). All of the above are just some of the reasons why a short position may be held in a stock but can be considered benign in share price direction terms due to offsets.

Market makers in stock and stock index options will also hedge their portfolios using short positions where necessary. These delta hedges often form the other side of a client's long stock-long put option protection trade, or perhaps long stock-short call option (“buy-write”) position. In a clear example of how published short percentages can be misleading, an options market maker may hold a short position below the implied delta hedge level and that actually implies a “long” position in that stock.

Another popular trading strategy is that of “pairs trading” in which one stock is held short against a long position in another stock. Such positions look to exploit perceived imbalances in the valuations of two stocks and imply a “net neutral” market position.

Aside from all the above reasons as to why it would be a potential misconception to draw simply conclusions on short percentages, there are even wider issues to consider. ASIC itself will admit that short position data is not an exact science given the onus on market participants to declare to their broker when positions truly are “short”. Without any suggestion of deceit, there are always participants who are ignorant of the regulations. Discrepancies can also arise when short positions are held by a large investment banking operation offering multiple stock market services as well as proprietary trading activities. Such activity can introduce the possibility of either non-counting or double-counting when custodians are involved and beneficial ownership issues become unclear.

Finally, a simple fact is that the Australian Securities Exchange also keeps its own register of short positions. The figures provided by ASIC and by the ASX at any point do not necessarily correlate.

FNArena has offered this qualified explanation of the vagaries of short stock positions as a warning to subscribers not to jump to any conclusions or to make investment decisions based solely on these unqualified numbers. FNArena strongly suggests investors seek advice from their stock broker or financial adviser before acting upon any of the information provided herein.

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article 3 months old

Grains And Softs – Perhaps We Are Coming Close To A Low

By Jonathan Barratt
 
The carnage of the last week has been pretty solid with Corn trading back to levels not seen since Dec 2010. The weakness in these markets has spilled over to other parts of the complex however the last few trading sessions has seen a little support creep back into the markets. Traders continue to look to towards weaker commodity prices as a result of lower expectations on the demand as a result of weaker economies. Next week we have the important USDA monthly supply demand statistics, which will provide a little clue as to the current state of play in the complex.

Corn 

As mentioned corn has traded back to levels not seen since Dec 2010, the price action over the last couple of sessions has been supportive. Technically, we need to see a break above US 580 in order to become bullish. This level is important as it suggests a false break to the downside and one to be monitored closely. Momentum indicators on the trade would be positive once this break has been released.
 


Wheat 

It has been a volatile couple of weeks for the wheat complex. After seeing a 12% drop we are coming close to a double bottom. Our decision to close the long was correct and at these levels we will monitor the prices action for a chance to get back in. News that Argentinian Farmers have decided to go on strike over higher taxes will help provide some support to the market. In addition, to this we are hearing that the Russian production and exports are worst than predicted which may see some tightness in supply. Technically, we have good support at US 615 and then at US595. We feel it needs to do an awful lot of work in order to get through these levels and as such have adopted a bullish bias.

 

Soybean 

Our temptation to go long last should have been taken up, as we would have had good profits. The market has bounced of support at US 1325, which we will claim as solid support. On any bullish strategy we are comfortable that just below this area can now be used as a place for stops on long positions. In addition to technical support coming to play we have noted that the Brazilian government has trimmed back its estimates on carry over stocks for the year. This should be supportive, as the production has already been decimated by drought. In trading soybean at the moment suggest you can wait for the market to come to you and if long stops need to be placed at US 1315. 


 
 
Produced by Jonathan Barratt direct from the trading desks of Commodity Broking Services, Barratt's Bulletin provides expert analysis of commodity markets, global indices and foreign exchange movements. Click here to take a no obligation 21-day trial to Barratt's or to learn more visit www.barrattsbulletin.com. Content included in this article is not by association necessarily the view of FNArena (see our disclaimer).

This report is not, and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, products, securities or investments. This report does not, and should not be construed as acting to, sponsor, advocate, endorse or promote products or any other products, securities or investments. This report does not purport to make any recommendations or provide any investment or other advice with respect to the purchase, sale or other disposition of products, securities or investments, including, without limitation, any advice to the effect that any related transaction is appropriate for any investment objective or financial situation of a prospective investor. A decision to invest in securities or investments should not be made in reliance on any of the statements in this report. Before making any investment decision, prospective investors should seek advice from their financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision.

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article 3 months old

Top Ten Weekly Recommendation, Target Price, Earnings Forecast Changes

By Chris Shaw

Over the past week the changes in recommendations by the eight brokers in the FNArena database have been fairly evenly spread between upgrades and downgrades. The changes bring total Buy ratings to 49.13%.

Among the stocks upgraded were three companies in the oil and gas sector, where Citi has reviewed ratings following recent share price underperformance. For both Aurora Oil and Gas ((AUT)) and Beach Energy ((BPT)) Citi has upgraded to Neutral ratings from Sell previously, while Oil Search ((OSH)) has been upgraded to Buy from Neutral. 

In all three cases valuation has improved despite a weakening share price, the analysts assure. They like Oil Search in particular for its low risk growth and the upside from LNG projects being developed.

Elsewhere, Macquarie has upgraded Bendigo and Adelaide Bank ((BEN)) to Outperform from Neutral, as while earnings estimates and price target are unchanged, the broker sees margin concerns for the regional lender as being overplayed by the market at present. This implies value at current levels.

Macquarie has also upgraded a number of other ratings, moving to Outperform from Neutral on Ramsay Health Care ((RHC)) post a review of private health expectations. Revenue growth and margin expansion should continue and given this Macquarie has lifted earnings estimates and price target, which supports the upgrade.

Royal Wolf ((RWH)) has expanded its rental fleet and this has prompted Macquarie to adjust earnings forecasts and price target. The changes have improved the value on offer and sees the broker upgrade to an Outperform rating. On valuation grounds Macquarie has also upgraded QBE Insurance ((QBE)) to Outperform from Neutral.

While still seeing BlueScope ((BSL)) as a high risk play, BA Merrill Lynch has upgraded to a Buy rating from Hold previously. The shift to a more positive view reflects current increases in steel margins, an improved balance sheet and an improvement in downside risk scenarios.

James Hardie ((JHX)) beat Deutsche Bank's forecasts with its full year profit result, by enough so the broker has lifted estimates and its price target for the stock. Growth potential from a recovery in the US economy has prompted Deutsche to upgrade to a Buy rating from Neutral.

JP Morgan has reviewed the Australian media sector and the result is changes to earnings estimates and price targets across the sector. For Prime Media ((PRT)) specifically the stockbroker's price target has increased slightly, which justifies a shift to an Outperform rating from Neutral previously.

Following the sale of its 50% stake in the Port of Portland, Deutsche sees risk Australian Infrastructure ((AIX)) uses the proceeds to internalise management. The asset sale generates an increase in price target but on valuation grounds the broker downgrades to Hold from Buy.

Campbell Brothers ((CPB)) delivered a solid profit result but Macquarie continues to see risk of a pullback in exploration spending by junior resources companies. This has the potential to impact on Campbell's minerals division earnings and this suggests limited scope for outperformance. To reflect this Macquarie downgrades to a Hold rating from Buy previously.

Macquarie has also downgraded to a Hold rating on Westpac ((WBC)) given lower margin expectations for banks in general. The resulting changes in forecasts saw the broker lower its price target for the stock.

Interim earnings for Elders ((ELD)) disappointed relative to Citi's expectations, a major issue being the lack of progress evident in operations in the core rural services business. Cuts to earnings forecasts and price target support the broker's downgrade in rating (to Neutral from Buy, High Risk).

Citi also downgraded Graincorp ((GNC)) to Hold from Buy post interim profit results, though in this case not because of any disappointment with the result. Rather, Citi was impressed and lifted earnings forecasts through the next three years on the back of the result; the downgrade in rating reflects the recent share price increase.

Weak earnings guidance from Ridley Corporation ((RIC)) was enough for RBS Australia to downgrade to Hold from Buy, as revised earnings forecasts suggest the stock is fair value around current levels. Price target was also adjusted lower following the earnings adjustments.

Still weak retail sales and the expected impact on volumes and margins for Myer ((MYR)) saw RBS also downgrade its rating to Hold from Buy. While management are doing a reasonable job in RBS's view, there is little that can counter the weak trading environment at present and this limits any scope for share price outperformance.

In terms of changes to price targets and earnings forecasts, the largest increase in target was for Panoramic Resources ((PAN)), while the largest cut was for Thorn Group ((TGA)) post the company's full year profit result.

With regards to earnings changes, Goodman Group ((GMG)) enjoyed the largest increases to forecasts as Macquarie revised its model, while the major cuts were experienced by Sydney Airport ((SYD)) given concerns over duty free sales and the upcoming expiry of a rental guarantee, and by Australian Infrastructure ((AIX)). 

 

Total Recommendations
 Recommendation Changes

 

Broker Recommendation Breakup

 

Broker Rating

Order Company Old Rating New Rating Broker
Upgrade
1 AURORA OIL AND GAS LIMITED Sell Neutral Citi
2 BEACH ENERGY LIMITED Sell Neutral Citi
3 BENDIGO AND ADELAIDE BANK LIMITED Neutral Buy Macquarie
4 BLUESCOPE STEEL LIMITED Neutral Buy BA-Merrill Lynch
5 JAMES HARDIE INDUSTRIES N.V. Neutral Buy Deutsche Bank
6 OIL SEARCH LIMITED Neutral Buy Citi
7 PRIME MEDIA GROUP LIMITED Neutral Buy JP Morgan
8 QBE INSURANCE GROUP LIMITED Neutral Buy Macquarie
9 RAMSAY HEALTH CARE LIMITED Neutral Buy Macquarie
10 ROYAL WOLF HOLDINGS LIMITED Neutral Buy Macquarie
Downgrade
11 AUSTRALIAN INFRASTRUCTURE FUND Buy Neutral Deutsche Bank
12 Campbell Brothers Limited Buy Neutral Macquarie
13 ELDERS LIMITED Buy Neutral Citi
14 GRAINCORP LIMITED Buy Neutral Citi
15 MYER HOLDINGS LIMITED Buy Neutral RBS Australia
16 RIDLEY CORPORATION LIMITED Buy Neutral RBS Australia
17 WESTPAC BANKING CORPORATION Buy Neutral Macquarie
 

Recommendation

Positive Change Covered by > 2 Brokers

Order Symbol Previous Rating New Rating Change Recs
1 AUT - 40.0% - 20.0% 20.0% 5
2 PRT 50.0% 67.0% 17.0% 6
3 PAN 50.0% 67.0% 17.0% 3
4 BSL 43.0% 57.0% 14.0% 7
5 MND 20.0% 33.0% 13.0% 6
6 WOW 38.0% 50.0% 12.0% 8
7 PRY 38.0% 50.0% 12.0% 8
8 QBE 38.0% 50.0% 12.0% 8
9 OSH 88.0% 100.0% 12.0% 8
10 JHX 13.0% 25.0% 12.0% 8

Negative Change Covered by > 2 Brokers

Order Symbol Previous Rating New Rating Change Recs
1 TGA 100.0% 33.0% - 67.0% 3
2 GNC 50.0% 17.0% - 33.0% 6
3 AIX 83.0% 67.0% - 16.0% 6
4 WBC 25.0% 13.0% - 12.0% 8
5 SGT 50.0% 40.0% - 10.0% 5
 

Target Price

Positive Change Covered by > 2 Brokers

Order Symbol Previous Target New Target Change Recs
1 PAN 2.070 2.300 11.11% 3
2 GNC 8.692 9.350 7.57% 6
3 WOW 27.129 27.450 1.18% 8
4 AIX 2.318 2.338 0.86% 6
5 PRT 0.807 0.813 0.74% 6
6 PRY 3.276 3.285 0.27% 8
7 AUT 3.864 3.870 0.16% 5

Negative Change Covered by > 2 Brokers

Order Symbol Previous Target New Target Change Recs
1 TGA 1.893 1.687 - 10.88% 3
2 RRL 4.548 4.480 - 1.50% 5
3 JHX 7.583 7.520 - 0.83% 8
4 WBC 23.441 23.259 - 0.78% 8
5 BSL 0.603 0.599 - 0.66% 7
6 MND 23.346 23.288 - 0.25% 6
7 QBE 14.661 14.636 - 0.17% 8
 

Earning Forecast

Positive Change Covered by > 2 Brokers

Order Symbol Previous EF New EF Change Recs
1 GMG 6.125 16.975 177.14% 8
2 GNC 92.200 102.600 11.28% 6
3 TWE 19.271 19.986 3.71% 7
4 MND 132.500 135.167 2.01% 6
5 CPU 46.431 47.120 1.48% 8
6 WHC 6.914 6.957 0.62% 7
7 RMD 16.343 16.442 0.61% 8
8 BRG 32.333 32.500 0.52% 3
9 TGA 20.400 20.500 0.49% 3
10 SUL 53.214 53.457 0.46% 7

Negative Change Covered by > 2 Brokers

Order Symbol Previous EF New EF Change Recs
1 SYD 6.450 5.700 - 11.63% 6
2 AIX 18.467 16.767 - 9.21% 6
3 JHX 39.061 37.093 - 5.04% 8
4 DUE 8.725 8.463 - 3.00% 8
5 ROC 4.916 4.781 - 2.75% 5
6 QBE 138.232 135.588 - 1.91% 8
7 RRL 15.875 15.620 - 1.61% 5
8 AUT 28.384 27.932 - 1.59% 5
9 EHL 10.972 10.805 - 1.52% 5
10 FXJ 8.738 8.613 - 1.43% 8
 

Technical limitations

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