Stocks to watch: FPH, Heritage Gold, NPT

Monday 2nd August 2010

Fisher & Paykel Healthcare's rating was raised to 'buy' by Morningstar, Heritage Gold is to be part of a new float to mine cobalt in New South Wales and National Property Trust has approved a plan to buy out its management contract.

Fisher & Paykel Healthcare (FPH): The breathing mask and respirator device maker was raised to ‘buy’ from ‘accumulate’ by Morningstar analyst Nachi Moghe, according to the ShareChat website. He said the introduction of competitive bidding, including for obstructive sleep apnea products in nine or 10 major US cities is unlikely to have a major impact on manufacturers. The move by the Centre for Medicare and Medicaid has resulted in significant reductions in reimbursement rates for OSA treatment though most of this would be felt by home care dealers, not producers. The stock was unchanged on Friday at $3.02.

Heritage Gold (HGD): Heritage Gold will be part of a new float to mine cobalt at Pyrites Hill, Thackaringa, near Broken Hill in outback New South Wales, the ASX and NZX-listed Australasian mining company said today. The mine is owned 33% by Heritage and 66% by global mining giant BHP Billiton, and is in the last stages of raising A$1 million in pre-IPO funding ahead of a separate listing for the cobalt prospect. The shares traded at 2.4 cents on July 29.

National Property Trust (NAP): The property investor’s unit holders approved a plan to buy out of its management contract and convert to a regular company. The contract is currently held by a unit of the St Laurence group, which will be paid $2.5 million for the contract and the trust will also buy back $16.6 million units held by the manager. The units rose 1.9% to 54 cents on Friday.

New Zealand Oil & Gas (NZO): Crude oil fell in New York on Friday after Oil extended losses in New York after a government report showed the world’s biggest economy slowed to a 2.4% annual pace in the second quarter, missing some estimates. Crude oil for September delivery traded at US$77.43 a barrel on the New York Mercantile Exchange. The shares rose 0.8% to $1.24 on Friday.

Pacific Edge Biotechnology (PEB): The cancer diagnosis firm has a “pipeline of new products coming through” after winning New Zealand patents for gastric cancer detection and melanoma prognostic technology, chief scientist, Parry Guilford told BusinessDesk. The shares last traded at 22 cents on July 26.

PGG Wrightson (PGW): The nation’s largest rural services company has halted negotiations with Olam International over relinquishing the management contract for NZ Farming Systems Uruguay. Olam is offering to takeover Farming Systems at 55 cents a share. Wrightson fell 1.9% to 53 cents on Friday. Farming Systems (NZS) traded at 56 cents, 1 cent above the offer price.

Telecom (TEL): The phone company is divesting its troubled AAPT unit, with Australia’s iiNet agreeing to buy the retail part of the business for A$60 million. Telecom also sold its 18.2% stake in iiNet for A$70 million, about A$11 million below the carrying value as at June 30. The shares ended unchanged on Friday at $1.99.

Telstra (TLS): The Australian phone company on Friday announced a A$170 million impairment charge against its CSL New World unit in Hong Kong, which may wipe out profit growth over the past 12 months. The company said its previous forecast for "low single digit" EBITDA growth didn’t include the impairment and earnings may now weaken on that measure. The shares fell 0.3% to A$3.22 on the ASX on Friday.

Themes of the day: Key indicators of the health of the domestic economy out this week include Fonterra’s online milk powder auction and the ANZ Commodity Price Index. Employment data due on Thursday is expected to show the jobless rate climbed back up to 6.4% in the second quarter, having tumbled to 6% three months earlier. Stocks on Wall Street ended little changed on Friday in New York, rounding out the best month in a year, with the Dow Jones Industrial Average rising about 7%.

Businesswire.co.nz

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