Weekly Report
Here’s your weekly update of news, analysis and research from . The full reports can be read on the
stock pages.
New Stock Reports
PUSHPAY (PPH:NZ / PPH:AX) Buy (High-Risk): Corporate Jargon Roulette
Our report on PPH provides a critical analysis of the cutting of ties by co-founder Eliot
Crowther, abandonment of the US listing, the subsequent stock price reaction as well as open
advice to all management of public companies in relation to insider selling and discussions
of liquidity. You can find the full report on the Pushpay Stock report page.
BHP Billiton (BHP:AX) BUY: Late Cycle Play
We have been positive on mining giant BHP Billiton for some time now and it has performed
very well, more than doubling since commodity prices crashed at the start off 2016. The most
recent share price move has come on the back of an announcement that BHP is looking to
unload its US shale assets with bids received from several oil majors in the range of US$7
billion to US $9 billion. We see BHP as our preferred portfolio holding to gain exposure to the
commodity space given it is highly diversified by region and commodity type, particularly late
in the economic cycle when commodity prices usually rise with inflation.
AIR NEW ZEALAND (AIR:NZ/AIZ:AX) BUY (High-Risk): Price Setter
Shares in AIR were higher as the airline announced to investors at a briefing that it still
expects annual earnings to beat last year’s result despite the squeeze from rising fuel costs,
which it sees as an ongoing headwind into 2019. Air NZ has already responded to the higher
cost of fuel with increased prices on domestic and international routes. We still believe Air
NZ is attractively priced and offers an attractive 6.7% dividend yield for the year ahead.
However, we would caution investors need to have an appetite for risk considering the highly
competitive airline industry and the potential impact that rising jet fuel prices can have on
future profits.
WiseTech Global (WTC.AX) HOLD: Wise To HOLD
Shares in logistics software as a service company Wisetech Global have staged a remarkable
comeback since April, with the stock now trading back at all-time highs. WTC shares have surged higher on the back of slightly upgraded revenue guidance, which is now expected to be in the range of +35% to +41% higher than in 2017. WTC also announced it has issued $100m of shares to a single institutional investor and have continued to make a number of acquisitions globally. The extreme moves experienced by WTC shares this year reinforce our concerns around the company’s expensive valuation, which can see even a slight miss (or even beat) compared to the markets expectations result in a sharp share price move. We remain HOLD rated.
Shopify Inc (SHOP.NYSE) BUY: Shutting Down the Doubters
Shopify keeps surging to new highs, up +57% since the start of the year after delivering
another solid first quarter result for the 2018 financial year, beating market expectations.
While the share price has experienced some hiccups along the way, with Adobe acquiring a
small rival of Shopify and Citron Research continuing to bash Shopify’s business model,
Shopify has done well to ignore the noise and continue to grow merchant numbers and
revenue as it looks to head towards a breakeven situation.