Stocks to watch: PGC, NZO, Telstra, Warehouse

Monday 15th March 2010

Pyne Gould's finance group has been accepted under the government's extended guarantee scheme, Pumpkin Patch says it needs a "robust retailing environment" or to up its wholesale earnings to boost share prices, while crude oil fell on Friday. Meanwhile, Wakefield is bidding for control of Grace Hospital in Tauranga

Pyne Gould Corp. (PGC): The finance group’s Marac Finance unit, which has ambitions to become a bank, said last week it was accepted under the government’s extended Retail Deposit Guarantee Scheme through to the end of December 2011. The stock rose 2.1% to 48 cents on Friday.

New Zealand Oil & Gas (NZO): Crude oil fell for the first time in three days in New York on Friday after an unexpected drop in US consumer confidence. New York crude for April delivery fell 87 cents to US$81.24 a barrel. Oil is 73% higher than it was a year ago.

Pumpkin Patch (PPL): The children’s clothing retailer needs either a robust retailing environment in Australia, and/or a step change in its wholesale division’s earnings to give its share price a genuine boost NZ First Capital analyst Sarndra Urlich said in ShareChat. Australia contributes 87% of earnings, with the UK and US being too small to have a meaningful impact. She is forecasting net earnings of $25 million for the full year, rising to $26.9 million for the following year. Its shares rose 1.3% on Friday to close at $2.18.

Telstra Corp. (TLS): Shares of Australia's biggest phone company have sunk to a record low this month on the ASX amid political debate about splitting up its wholesale and retail arms, and weaker earnings. The shares were at A$3.08 on Friday and are down 11% this year.

Wakefield Health (WFD): The private hospital operator is bidding for control of Grace Hospital in Tauranga. The company is also expanding its Bowen Hospital site in Wellington. The Tauranga purchase comes after a long search by the company, which has ample strength of its balance sheet and commitments for 51% of Norfolk, which owns Grace. The shares on Friday gained 3.4% to $7.24.

Warehouse Group (WHS): The retailer posted a 17% gain in first-half profit, on Friday, though this mainly reflected costs in the year-earlier period that weren’t repeated. Full year earnings, adjusted, wouldn’t rise from 2009 levels, it said. The shares dropped 1.5% to $3.86 on Friday. “They appear to be struggling to get any sales growth at all,” said Stephen Walker, portfolio manager at newly formed Devon Funds Management.”

Themes of the day: Wall Street provided little in the way of direction on Friday, with the Dow Jones Industrial Average edged up 0.1% after mixed data - consumer confidence declined while retail sales advanced. Crude oil weakened. The kiwi dollar traded at 70.31 US cents. Former European Commission President Romano Prodi said the worst of Greece's fiscal troubles are over and other European nations are unlikely to suffer in the same way.

Businesswire.co.nz

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