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Stocks to watch: Goodman Property, Wrightson, SLG, TEL, WFD, WBC

Wednesday 12th May 2010

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Goodman Property Trust reported full-year earnings of $12.5 million, PGG Wrightson shares gained after receivers of Rural Portfolio Investments sold its 48.6 million shares in the company, Sealegs posted its first profit and Wakefield Health confirmed it would take over Norfolk Investments.

Goodman Property Trust (GMT): The property investor yesterday reported full-year operating earnings of $12.5 million compared to a loss of $83.7 million in 2009. Property valuations fell 3.3% in the latest period to $1.5 billion, having dropped 10% in the previous year. The shares fell 1 cent to 98 cents yesterday. 

PGG Wrightson (PGW): New Zealand’s biggest rural services company gained 3.8% to 55 cents after the receivers of Rural Portfolio Investments sold that company’s 48.6 million shares in Wrightson at 52 cents apiece, removing an overhang in the market. The shares are being helped by stronger commodity prices, which lift incomes of Wrightson’s farmer customers, and as some investors picked up the stock near six month lows, said Paul Robertshawe, who manages $220 million at Tower Asset Management in Wellington.

Sealegs Corp. (SLG): The amphibious boat maker yesterday posted its first operating profit since listing on the NZX in 1994. The $642,000 profit in the year ended March 31 compares with a year-earlier loss of $869,000. The shares soared 53% to 26 cents yesterday, a level it last reached in November last year. 

Telecom Corp. (TEL): The Commerce Commission has issued a draft recommendation to regulate the fees phone that companies bill for terminating rivals’ calls on their networks. Phone companies had avoided regulation by offering voluntary reductions in the fees over the next four years. But rival Vodafone New Zealand “undermined” the arrangement with a component of its latest pricing plan. The shares fell 1 cent to $2.10 yesterday.

Wakefield Health (WFD): The owner of Wellington’s Bowen and Wakefield hospitals yesterday confirmed it will make a full takeover offer for Norfolk Investments for $22.6 million, gaining control of Tauranga’s Grace Hospital. The shares fell 1 cent to $7.01 yesterday. 

Westpac Banking Corp. (WBC): The lender was downgraded to ‘add’ from ‘buy’ by Aegis Equities Research analyst David Ellis, according to the ShareChat website. While first-half cash net profit jumped 30%, core underlying earnings gained a more modest 4.7%. “We have reduced our forward earnings assumptions due to the slower performance in Westpac's core retail banking businesses in the half,” he said. Ellis cut his earnings-per-share forecast for the year ending September 2010 by 2.3% and his 2011 forecast by 4.6%. The NZX-listed shares were unchanged at $31.31 yesterday and have slipped 13% in the past month. 

Windflow Technology (WTL): The wind turbine manufacturer said production levels are behind expectations because of the prolonged dispute with customer New Zealand Windfarms (NWF). The final 16 turbines will be completed next financial year, rather than in the period to June 30 and will have an impact on current year earnings because some revenue now won’t be recognised until the following year. That means the current year loss will now be a larger-than-anticipated $5 million to $6 million. Windflow traded unchanged yesterday at 98 cents. Windfarms was stead on 24 cents. 

Themes of the day: Shares fell on Wall Street as lingering fears about the adequacy of Europe’s 750 billion euro bailout offset signs of better economic performance in the US and ahead of quarterly earnings for American companies. The kiwi dollar dropped 1.4% against the pound to trade recently at 47.91 pence after British Conservative leader David Cameron became prime minister, ending 13 years of Labour government.

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