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Stocks to watch: Horizon Energy, Pacific Edge, PFI

Tuesday 3rd August 2010

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Marlborough Lines has extended its offer for shares in Horizon Energy for the second time, Pacific Edge shares jumped 14% yesterday on news it was launching more new products and Property for Industry posed a loss of $35.5 million due to new tax depreciation changes.
 
Horizon Energy Distribution (HED): Marlborough Lines yesterday extended its offer for shares in the electricity distributor for a second time, giving shareholders a further week to sell. Marlborough is aiming to lift its holding to 15% from 10.1%, offering $4.06 a share. As at the company’s last disclosure on July 26 it had 12.5% of the stock. The stock traded unchanged at $4.06 yesterday.

Pacific Edge Biotechnology (PEB): The shares soared 14% to 25 cents yesterday after the cancer diagnosis firm said it has a “pipeline of new products coming through” after winning New Zealand patents for gastric cancer detection and melanoma prognostic technology.

Property for Industry (PFI): New Zealand’s only listed company specialising in industrial property posted a non-cash loss of $35.5 million due to the government’s tax depreciation changes, but excluding that charge posted a $9.2 million net profit. Occupancy of its buildings is at 99.9%, and there was no change in valuation following its end of June result. Its shares dropped one cent yesterday to $1.13.

TeamTalk (TTK): The communications company’s CityLink unit has amended its proposal to Crown Fibre Holdings to partner the government in delivering a fibre-to-the-home network in the Wellington region. “This is a great opportunity for the government to break with the past,” said managing director David Ware.  The shares last traded at $2.10 on July 30.

Telecom (TEL): The company has proposed structural separation into two units that would carve network business Chorus out as a standalone company. The company “has gone from aggressively resisting to playing ball” with Crown Fibre, said Paul Harrison, who manages $330 million of equities at BT Funds Management. The shares plumbed a two-decade low in June and their recovery since then probably reflects the company “offering a better probability of a positive outcome.” The stock rose 0.5% to $2 yesterday, the highest close since May 20.

Telstra (TLS): Australia’s largest phone company announced on Friday that it would take a A$170 million impairment charge against its CSL New World unit in Hong Kong. That 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 stock rose 1% to $4.07 yesterday.

Wellington Drive Technologies (WDT): The electric motor manufacturer and marketer continues to disappoint on the earnings front, and its breakeven point has been pushed out even later, according to Forsyth Barr analyst Andrew Harvey-Green. The ShareChat website reported Harvey-Green expects the company to become EBIT profitable in the first half of 2012 and cash flow breakeven by the second half of 2012, and that the company will have to raise yet more fresh capital within the next three or four months. The shares were unchanged yesterday at $0.09.

Themes of the day: Stocks on Wall Street and in Europe gained as strong earnings from European banks stoked investors' optimism about the state of the global recovery. The quarterly employment survey and labour cost index are due out today in the first round of labour data, while the Reserve Bank of Australia reviews the target cash rate and is expected to keep it on hold at 4.5%. The kiwi rose overnight to 73.26 US cents from 73.14 amid the increased appetite for higher yields.

Businesswire.co.nz



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