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

 

Scoop Business: Alex Swney Pleads Guilty To $2.5M Fraud Charge

Alex Swney, former chief executive of the Auckland city centre business association Heart of the City, has pleaded guilty to dishonestly using documents to obtain $2.5 million. More>>

ALSO:

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Scoop Business: NZ Broadcasters Launch Battle Against Global Mode ISPs

New Zealand broadcasters have confirmed they’ve launched legal proceedings against internet service providers who give customers’ access to “global mode”, which allows customers access to offshore online content, claiming it breaches the local content providers’ copyright. More>>

ALSO:

Sanford: Closure Of Christchurch Mussel Processing Plant Confirmed

The decision comes after a period of consultation with the 232 staff employed at the Riccarton site, who were told on 9 April that Sanford was considering the future of mussel processing in Christchurch. Recent weather patterns had impacted on natural spat (offspring) supply... More>>

ALSO:

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Scoop Business: Reserve Bank’s Spencer Calls On Govt To Rethink Housing Tax

The Reserve Bank has urged the government to take another look at a capital gains tax on investment in housing, allow increased high-density development and cut red tape for planning consents to address an over-heated Auckland property market. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news