Stocks to watch: Charlie's, DNZ, NZ Farming Systems

Wednesday 25th August 2010

Charlie's shares soared over 11% yesterday after it announced a record profit, DNZ Property's shares rose on news it had sold two vacant industrial sites in Auckland, while NZ Farming Systems shares also jumped after Olam upped its takeover offer.

Charlie's Group (CHA): The juice maker's shares climbed 11.1% to 10 cents yesterday after the company announced a record profit forecast on record sales in the year ended June 30.

DNZ Property Fund (DNZ): The shares rose 2% to $1.04 yesterday after the company announced that it had completed the sale of two vacant industrial sites near the Auckland International Airport for $2.9 million. The proceeds of the sale will be used to repay bank debt, the fund said in a statement today.

NZ Farming Systems Uruguay (NZS): The shares rose 11% to 70 cents yesterday, matching Olam International's revised offer for the company, which has been accepted by Accident Compensation Corp. with 7% of the stock. Olam increased its potential shareholding in Farming Systems to almost 37%.

PGG Wrightson (PGW): The rural services company owns 11.5% of Farming Systems and stands to benefit from Olam's increased offer. It has agreement to sell to Olam. The stock rose 5.7% to 56 cents yesterday.

Skellerup Holdings (SKL): The technical polymer and vacuum pump manufacturer is expected to report its full-year results today. The company is forecast to post an increase in earnings as new technical sales gather momentum, according to John Cairns, an analyst with Forsyth Barr.

Telstra (TLS): The Australian phone company is rated a ‘buy' by Peter Warnes, an analyst at Aegis Equities Research, according to the ShareChat website. He said 2011 is a "transition" year with further investment required. The benefits are expected to be delivered "in 2012 and beyond," he said. The shares fell 2.4% yesterday to $3.68 on the NZX.

Themes of the day: Wall Street and European markets slumped overnight as an unexpected 27% drop in home sales last month stoked fears that the world's largest economy could slide back into recession. The Standard & Poor's 500 Index declined 1.2%. The Stoxx Europe 600 Index dropped 1.7%. New Zealand business managers expect inflation will accelerate short-term as the increase in goods and services tax and other imposts come online, according to a nationwide survey of business managers on behalf of the Reserve Bank. One-year-ahead annual CPI expectations rose to 3.9% from 2.9% in the second-quarter survey.

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