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Stocks to watch: GPG, Freightways, Nuplex

Friday 27th August 2010

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GPG returned to profit from a year-earlier loss and stocks rose on the news, Freightways shares are currently trading at a discount according to Goldman Sachs, while Nuplex posted a record profit of $64.2 million, up from $16.4 million a year earlier.

Guinness Peat Group (GPG): The investment company posted its half-year results yesterday, showing a return to profit of 12 million British pounds, from a year-earlier loss of 24 million pounds. GPG chairman Ron Brierley said the company will also close its New Zealand office, saying the nation where cut his teeth as a corporate raider holds "little or no opportunities" for the investment company. The stock rose 1.6% to 65 cents yesterday.

Freightways (FRE): Shares in the express package company are trading at a big discount, according to Marcus Curley, an analyst at Goldman Sachs JB Were quoted on the ShareChat website. He puts the company’s discounted cash flow valuation at $3.95. The stock was unchanged yesterday at $2.84.

Nuplex Industries (NPX): The specialty chemicals maker yesterday posted a record profit of $64.2 million, up from $16.7 million a year earlier on the back of a recovery in its Asian and European markets. The company will pay a final dividend of 11 cents a share, up from 5 cents a year earlier. The stocks rose 6.8% to $3.15 yesterday.

Vector (VCT): The lines company is expected to deliver a solid result when it posts its full-year earnings today, according to Andrew Harvey-Green, an analyst with Forsyth Barr. There are however some risks to the company’s gas wholesale businesses now that Liquigas has used its cheap Maui entitlements. Shares were unchanged yesterday at $2.08.

Metlifecare (MET): The retirement village operator announced a profit of $67.5 million from a year-earlier loss, saying an increase in the value of property contributed to the gain. The 2009 loss was $115.7 million. The group's investment properties were valued at $1.27 billion at the end of the latest year, up from $1.13 billion 12 months earlier. The stocks traded unchanged yesterday at $2.

Auckland International Airport (AIA): The nation's busiest gateway reported underlying profit came in ahead of its initial guidance, at $105 million. Revenue was down 1.4% to $363.1 million over the year. The decline was less severe than initially expected given the soft operating environment and the anticipated impact from the reversion to a dual duty free operator model. The stock rose 1% to $1.99 yesterday.

Themes of the day: Investors are awaiting US Federal Reserve Chairman Ben Bernanke's address at the central bank's annual forum in Jackson Hole, Wyoming, where he may give more signals of a return to quantitative easing. Stocks on Wall Street fell, with the Dow Jones Industrial Average dropping 0.4% to 10024.11, the Standard & Poor's 500 Index down 0.4% to 1051.16 and the Nasdaq Composite falling 0.7% to 2127.19. The New Zealand rose against the US dollar, having dropped below the 70 cents mark yesterday for the first time in seven weeks. It was last trading at 70.24 US cents.

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