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Stocks to watch: Truckies, taps and insurance companies in the spotlight

Monday 31st May 2010

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Themes of the day: Stocks on Wall Street fell on Friday, rounding out the worst month of May since 1940 after Fitch lowered Spain’s debt rating by one notch to AA+. The kiwi dollar fell to 67.75 US cents from 68.31 cents on Friday in New York. Fonterra holds its regular monthly auction of milk powder this week, having raised its forecast milk payment for the 2011 season this month.

Allied Farmers (NZX: ALF ), the finance company that bought Hanover Finance’s loan books in a debt-for-equity swap last year announced on Friday it had lifted its expected impairment charge on the loans to $51.5 million, and still has a third of the book to revalue. The stock slipped 7.8% to 5.9 cents on Friday.

Canterbury Building Society (NZX: CBS ): The only building society to trade on the NZX has been admitted to the extended guarantee. The shares trade infrequently and were last at $2.80 on May 14.

Fisher & Paykel Appliances (NZX: FPA ): The manufacturer posted a 47% drop in full-year earnings, reflecting weaker sales and unfavourable currency movements, meeting its guidance after a pickup in trading in the second half. One-time impairment charges pushed the net result to a loss. The stock was unchanged at 55 cents on Friday.

Mainfreight (NZX: MFT ): New Zealand’s biggest trucking company reported on Friday that it had eked out a 2.5% gain in full-year profit as it cut costs and took less in one-time charges, making up for a decline in sales. The company had a pickup in the fourth quarter which carried through into the current three-month period. The stock gained 4% on Friday to $6.20.

Methven (NZX: MVN ): The manufacturer of taps and bathroom fittings posted a 22% drop in full-year net income to $7.8 million, including a one-off UK intangible asset impairment of $481,000. Excluding the impairment, profit fell 17.5%, in line with its first-half guidance. Chief executive Rick Fala said the company is targeting a solid lift in sales and profitability in the current year “but remained alert to the continued uncertainties from the stop/start economic recovery in key markets.” The stock rose 1 cent to $1.58 on Friday,

Pacific Edge (NZX: PEB ): The biotech company announced the successful completion of the clinical trial for its bladder cancer detection test and said the test is now ready for clinical application. The shares jumped 7% to 30 cents on Friday.

Tower (NZX: TWR ):  The shares rose 2.7% to $1.89 on Friday after the insurer and fund manager part-owned by Ron Brierley’s Guinness Peat Group announced its first interim dividend in eight years after a turnaround in the value of its equity and property portfolios underpinned a surge in revenue. Net profit climbed 5.6% to $28.1 million.

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