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Stocks to watch: KMD, KIP, NPX, RYM, SKC, WDT

Wednesday 23rd June 2010

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Kathmandu has been rated a 'buy' by Goldman Sachs as it moves into its key winter season sale, Kiwi Income announces its property portfolio is valued at $1.85 billion, Nuplex shifts its focus to higher-margin specialist products, while Ryman shares fall 2.4%.

Kathmandu Holdings (KMD): The outdoor equipment retailer is rated a ‘buy’ by Buffy Gill, an analyst at Goldman Sachs JB Were, according to the ShareChat website. The currently depressed share price doesn’t reflect the company’s true value as it moves into its key winter sales season and Gill said it should benefit from the colder weather. The shares last traded on June 21 at $2.12.

Kiwi Income Property Trust (KIP): The commercial property investor announced a final cash distribution of 3.75 for the year ended March 2010. In releasing its annual report, the Trust said its property portfolio’s value is $1.85 billion. Its shares remained steady yesterday at $0.96.

Nuplex Industries (NPX): The resins maker is refocusing its product mix on higher-margin specialist products, said Forsyth Barr analyst John Cairns in ShareChat. “Nuplex is continuing to move its product mix to higher specification resins, driven in part by regulations limiting toxicity and the ongoing commitment to develop new technologies in-house,” Cairns said. “The transition to new technologies and the reduction in low-margin resin sales is driving higher average margins.” He values the stock at $3.63. Yesterday the stock lifted a cent to $3.06.  

Ryman Healthcare (RYM): The rest-home operator fell 2.4% to $2.07 yesterday, the lowest since May 7, after about 6.5% of the company changed hands in what may have been a departure of a Canadian investor.

Sky City Entertainment Group (SKC): The casino and hotel company yesterday said that the impact of tax changes will be a one-time deferred tax liability adjustment of $60 million and a $2 million increase in income tax payments starting in 2011. The shares rose 0.4% to $2.87 yesterday. 

Wellington Drive Technologies (WDT): The maker of energy-efficient motors denied a report on BusinessWire that it was set to return to profit in the second half. The company will have “substantial reductions in our EBITDA loss over the course of the year,” it said. “Our cash burn is forecast to reduce significantly in the second half of the year as losses diminish and working capital investment slows.” The shares traded unchanged at 97 cents yesterday.

Themes of the day: The balance of payments data out today is expected to show the current account deficit shrank to 2.7% of GDP in the first three months of the year, according to a Reuters survey, from 2.9% in the December quarter. Britain's new government delivered promised austerity measures, with fiscal cuts that will amount to 40 billion pounds a year by 2015, made up to 80% spending cuts and 20% tax increases. The UK's FTSE 100 shed 0.98%. The move to end stimulus spending in Europe, combined with an unexpected drop in US home sales put investors on edge, the Dow Jones Industrial down 1% and Standard & Poor's 500 Index fell 1.13%. Overnight the kiwi fell to 70.45 US from 70.55.

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