Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Few bargains fairly valued NZ market: Morningstar

Stock selection important in fairly valued NZ market, Morningstar says

By Pam Graham

July 9 (BusinessDesk) – Bargains are hard to find in the New Zealand share market as it is fairly valued overall and the electricity sector has recovered to be trading close to fair value, according to Morningstar.

The research company has ‘hold’ recommendations on 76 percent of the stocks it covers and has no ‘buy’ or ‘sell’ recommendations, though it has seven ‘reduce’ recommendations.

Morningstar sees Telecom is its “best idea”, and says the market may be underestimating the value of the company’s turnaround strategy. The shares rose 0.2 percent to $2.695 today.

“We think the strategy will work and initial signs are promising,” Morningstar said.

It expects the company to maintain momentum in the mobile market with an aggressive pricing strategy, which is important as mobile contributes 33 percent of retail revenue and is a key for future growth. The sale of AAPT has cleaned up the group structure and reduced risk.

“A strong balance sheet provides scope for the company to consider new capital management initiatives during the next 12 to 24 months, assuming delivery of operational and cost savings target,” Morningstar said.

Fletcher Building is the most expensive stock Morningstar covers, trading at 1.36 times fair value.

Energy is the most expensive sector, with Z Energy and New Zealand Oil & Gas trading well above Morningstar’s fair value estimates.

The health sector has good long-term fundamentals due to the ageing population but Ryman Healthcare and Ebos Group are expensive. Fisher & Paykel Healthcare looks to be reasonable value because it is trading at 0.94 of Morningstar’s fair value estimate.

Stock selection is important in a share market that is currently fairly valued, the research company said.

The consumer discretionary sector is a mixed bag with SkyCity Entertainment Group, The Warehouse Group and Trade Me Group looking to be reasonable value.

SkyCity looks to be the best value but is not rated as a best idea by Morningstar.

“We still believe the market is underestimating the benefits of the Adelaide and Auckland casino expansions,” Morningstar said.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Budget Policy Statement: Spending Wins Over Tax Cuts; Big Ticket Items Get Boost

Income tax cuts are on hold as the government says “responding to the earthquakes and reducing debt are currently of higher priority”, although election year tax sweeteners remain possible. More>>

ALSO:

Fishy: Is Whitebaiting Sustainable?

The whitebait fry - considered a delicacy by many - are the juveniles of five species of galaxiid, four of which are considered threatened or declining. The SMC asked freshwater experts for their views on the sustainability of the whitebait fishery and whether we're doing enough to monitor the five species of galaxiid that make up whitebait. More>>

ALSO:

Crown Accounts: Smaller-Than-Expected Four-Month Deficit

The New Zealand government's accounts recorded a smaller-than-forecast deficit in the first four months of the fiscal year on a higher-than-expected inflow of corporate and goods and services tax. More>>

ALSO:

On For Christmas: KiwiRail Ferries Back In Full Operation After Quake

KiwiRail’s Interislander ferries are back in full operation for the first time since the Kaikoura earthquake, with the railspan that allows rail wagons to be loaded on the Aratere now restored. More>>

ALSO:

Comerce Commission Investigation: Prosecutions Over Steel Mesh Labelling

Steel & Tube Holdings, along with two other companies, will be prosecuted by the Commerce Commission following the regulator's investigation into seismic steel mesh, while Fletcher Building's steel division has been given a warning. More>>

ALSO:

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news