Stocks to watch: FPA, LMP, Life Pharmacy, SKY TV

Monday 7th September 2009

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

Themes of the day: Shares rallied on Wall Street on Friday and the greenback weakened after figures showed the world’s biggest economy shed less jobs than expected last month. The International Monetary Fund raised its forecast for global growth in 2010 to 2.9% from its 2.5% estimate in July, according to a paper to the G-20 finance chiefs meeting.

Fisher & Paykel Appliances (FPA): The Accident Compensation Corp. on Friday disclosed it had become a substantial security holder, with 5.1% of the stock. It paid an average of 71 cents apiece for the shares. F&P Appliances stock gained 1.4% to 75 cents on Friday.

Fletcher Building (FBU): New Zealand property values improved for the fourth month in a row, stoking cautious optimism that the housing market is climbing out of its slump. House values fell 2.8% in the 12 months ended August 31, up from a 5% decline in the period through July, according to QV Valuations. The average sale price climbed 0.7% to $385,426 last month from a month earlier. Fletcher Building, New Zealand’s largest construction company, jumped 17 cents to $7.86 on Friday.

Investment Research Group (IRG): The investment advisory and brokerage firm soared 91% to 2 cents on Friday after completing its capital raising plans by placing 1.1 million shares at 2.25 cents apiece. The stock has tumbled 86% in the past 12 months.

Life Pharmacy (LPL): An independent report by Simmons Corporate Finance concluded Life Pharmacy’s offer for Pharmacybrands is between 3% and 35% above its valuation range. The shares fell 1.9% to 52 cents.

L&M Petroleum (LMP): The company is in a sound financial position and is well placed to continue progressing plans, it said in its interim report. At the end of the period, working capital was $8.9 million and L&P had no debt. The shares last traded unchanged on Friday at 12 cents.

Sky Network Television (SKT) and Sky City Entertainment Group (SKC) “are probably good stocks to own in this environment," said Forsyth Barr head of equity research Rob Mercer, according to the Dominion Post. “They've both got some good earnings growth over the next few years and are trading at reasonable discounts to value." Sky Network fell 0.9% to $4.46 on Friday and Sky City declined 0.6% to fell $3.26.

Taylors Group (TAY): Spotless Group clarified the word of its takeover offer for Taylors, which had implied it wouldn’t proceed without unanimous support from the target’s independent directors. “Spotless advises that it reserves its rights in all respects to make an offer or not make an offer to Taylors shareholders,” it said. Spotless offered $2.08 cash and entitlement to a 7 cent final dividend. The shares last traded at $2.10.

Businesswire.co.nz

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