Stocks to watch: Pyne Gould, Pumpkin Patch

Monday 5th October 2009

The following stocks may be active on the New Zealand exchange after developments since the close of trading Friday.

Themes of the day: Stocks fell in the US and Europe, metals and crude oil slid and the US dollar weakened after figures showed American employers cut more jobs that expected last month, while the unemployment rate climbed to the highest since 1983. Other figures showed US factory orders unexpectedly fell in August, stoking concern any recovery from recession will be slow. The Quarterly Survey of Business Opinion is released tomorrow, which will provide more clues to the strength of the economy’s recovery, while Fonterra Cooperative Group’s online auction results are out Wednesday morning.

Fisher & Paykel Healthcare (FPH): The manufacturer’s sales in the US, its biggest market, could be hurt by the healthcare reform bill, which may include a tax on medical devices, according to Macquarie Equities Research analyst Stephen Ridgewell, the Dominion Post reported. Macquarie estimates the company’s per-share earnings could fall 21% if it is unable to pass the impost on to customers. The shares fell 2 cents to $3.20 on Friday.

Goodman Fielder (GFF): The food and ingredients company raised A$500 million from a syndicated loan facility, pushing the average maturity of its A$700 million existing loan facility out by about two years, it said. The shares declined 3.8% to $2.04 on Friday.

New Zealand Oil & Gas (NZO): The oil and gas company’s shares could more than double if its four new wells are all a success, said McDouall Stuart head of research John Kidd, according to the Dominion Post. Kidd, who rates the stock a ‘buy,’ said there was “the genuine prospect of very significant exploration-led upside" from the planned wells. The shares fell 1 cent to $1.62 on Friday.

Pumpkin Patch (PPL): The children’s clothing chain is rated a ‘buy’ by Goldman Sachs JB Were analyst Buffy Gill, according to the ShareChat website. The retailer reported better-than-expected sales in Australia and New Zealand though margins were squeezed by discounting and promotions. Gill forecast `normalised’ net profit will rise to $26.2 million in 2010, from $18.5 million in the year through June 30. The shares were unchanged at $1.94 on Friday.

Sky City Entertainment Group (SKC): The casino, hotel and cinema operator is targeting another year of double digit earnings growth, despite soft trading conditions for gaming machines and fears that smoking bans in the Australian Northern Territory will hit Darwin casino earnings, according to its annual report. The shares fell 1.2% to $3.28 on Friday.

Telecom Corp. (TEL): Vodafone and Telecom offered deep discounts to mobile termination rates in a last ditch effort to try to convince the Commerce Commission against regulating prices, according to statements on Friday, the regulator’s deadline for revised undertakings. Both gave more ground in the prices they charge to connect to a rival network. Telecom proposed cutting voice calls to 12 cents per minute from next year, falling to 7 cents by 2014. The shares fell 2.6% to $2.63 on Friday.

Warehouse Group (WHS): The retailer is pushing for changes to labour contracts which remove employees' right to two consecutive days off a week and allows the company to extend shifts at short notice, the Sunday Star-Times reported. Warehouse is currently in talks with the Northern Distribution Union, according to the report. The shares fell 1.2% to $4.20 on Friday.

Businesswire.co.nz

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