Stocks to watch: Pike River Coal, A2 Corp, Air NZ, ABA, Briscoe, GFF, MHI

Monday 12th April 2010

Pike River Coal shares continue to surge and A2 Corporation is in talks for 'merger of equals' with Australia's Freedom Nutritional. Air New Zealand rises to a two-year high amid Rugby World Cup optimism and there's still gold in Michael Hill's Australasian sales performance.

Pike River Coal (NZX: PRC ): The shares surged 6.4% to $1.16 on Friday, when the miner received a share price inquiry from the NZX. Chief executive Gordon Ward pointed to the outlook for coal prices. The shares have also benefited from corporate activity in the sector in Australia.

A2 Corp. (NZX: ATM ): The promoter of milk with a protein variant claimed to have health benefits is in talks for a “merger of equals” with ASX-listed Freedom Nutritional Products Ltd. Under the all-scrip proposal, the merged entity would remain listed on the Australian stock exchange. The two companies on Friday said they have signed a three-week exclusivity accord for the talks. The shares fell to 7.9 cents from 8.5 cents.

Abano Healthcare Group (NZX: ABA ): The specialist health-care clinic investor is rated a ‘buy’ by Michelle Perkins, an analyst at Craigs Investment Partners, according to the ShareChat website. She cut her EBITDA forecast from $23.8 million to $21.9 million on the impact of more stringent ACC funding criteria but said the recent weak share price means the stock is attractive at current levels. The shares were unchanged at $5.50 on Friday.

Air New Zealand (NZX: AIR ): The national carrier rose to a two-year high on Friday amid optimism next year’s Rugby World Cup will stoke demand for fares. The stock climbed 2.1% to $1.45 on Friday.

Briscoe Group (NZX: BGR ): Economic indicators are still “difficult to read and we are cautious about the year ahead but hopeful that conditions will start to improve, managing director Rod Duke wrote in the retailer’s annual report. “With an uncertain economic outlook it remains important that the group continues to focus on maximising the return from every resource employed within the business,” he said. On Friday, the stock was unchanged at $1.28 and has fallen more than 6% in the past month.

Goodman Fielder (NZX: GFF ): Raw material costs are becoming less volatile, chairman Max Ould wrote in an update for shareholders. “We are maintaining our margins and management continues to generate strong cash flows which will drive our debt down further in the next six months,” he said. “The business is now performing well and we will have a solid year. The NZX-listed shares were unchanged at $1.88 on Friday.

Michael Hill International (NZX: MHI ): The jewellery chain reported Australian same-store sales grew 7.4% to $212.5 million in the first nine months, while New Zealand sales rose 6.4% to $73.2 million. “With the impacts of the global financial crisis receding, the company has also experienced some margin growth over the nine months to date,” said chairman Michael Hill. The stock jumped 5.7% to 74 cents on Friday.

Economic themes of the day: China posted its first trade deficit in six years last month as imports surged at almost three times the pace of exports, according to a report posted on the customs bureau’s Web site.

Shares advanced on Wall Street on Friday, with the Dow Jones Industrial Average gaining 0.6% and briefly pushing above 11,000 after Chevron gave an upbeat assessment of the outlook and data showed US wholesale inventories were stronger than expected.

Germany has signaled that it will stop opposing a European proposal to provide Greece with loans at below market interest rates. Greece would be charged an interest rate higher than that charged by the International Monetary Fund, which would participate in an EU-led rescue, Bloomberg reported.

The kiwi dollar bought 71.83 US cents from 71.21 cents in New York on Friday.

Businesswire.co.nz

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