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Top ASX 200 stocks in third quarter 2016

Top ASX 200 stocks in third quarter 2016

Miners including South32 and Whitehaven Coal were among the top five gainers in the S&P/ASX 200 index in the third quarter of 2016 calendar year, while TPG Telecom was one of the hardest hit.

The ASX 200 advanced 3.9% over three months to 5,435.9 at end-September, with eight out of 10 sectors posting gains.

Materials companies had the largest increase of 13.1%, followed by consumer staples (+10.6%) and information technology (+8%). The financial sector, which has the heaviest weighting in the index, was up 2.3%.

Over three months to September 30, at about 5pm Sydney time:

  • Brent oil dropped 2.2% to US$48.61 a barrel
  • WTI crude declined 2.1% to US$47.30 a barrel
  • Iron ore gained 1.8% to US$56.68 a dry metric tonne (on September 29)
  • Spot gold was little changed at US$1,323.27 an ounce
  • Australian dollar strengthened 2.1% to US76.07 cents

Below are the best- and worst-performing ASX 200 stocks in the third quarter, according to Bloomberg data.

Top performers

Whitehaven Coal

  • Share price increase in 3Q: 127.9% to $2.45

A surge in coal prices in recent months helped Whitehaven Coal (ASX: WHC) to power ahead, turning a $10,000 investment in its shares at the end of June to $22,790 within three months.

Mine closures in Australia, Indonesia and the US, coupled with China’s new regulations to curb coal output and close unprofitable mines, resulted in declining supply of the commodity, Whitehaven said in its 2016 annual report.

That lifted China’s domestic coal prices, and as Chinese power generators increased their use of imported coal, coal prices in the international markets have rebounded from the bottom seen in the first three months of 2016.

Whitehaven’s saleable coal production jumped 34% over a year to 15.1m tonnes, a record, for the 2016 financial year ended June 30 (FY16), driven by the first full-year commercial production at its Maules Creek mine.

While the FY16 average selling price was lower, higher sales at higher margins – as unit costs fell 8% – allowed the company to return to the black with a net profit after tax (NPAT) of $20.5m, its first full-year profit since 2012. It managed to reduce debt as cash generated from operations jumped 76%.

Webjet

  • Share price increase in 3Q: 63.6% to $11.60

Webjet (ASX: WEB), an online travel business selling flights, hotels and holiday packages, was one of six companies added to the ASX 200 in mid-September after a quarterly review of the index.

An entry to Australia’s benchmark stock gauge often attracts buying from investors, including funds that track the performance of the ASX 200.

Webjet lifted its FY16 final dividend by 10% after NPAT grew 27% to $22.2m, on the back of a 29% increase in revenue. Both the group’s retail and wholesale divisions delivered strong bookings growth and market share expansion, it said in August.

In the same month, Webjet signed a £21m deal with London-listed Thomas Cook Group to expand its wholesale hotel rooms market in Europe.

South32

  • Share price increase in 3Q: 56.5% to $2.41

From a historic low of 89 cents on January 12, shares in South32 (ASX: S32) have been on a rising trend in recent months.

The spin-off from BHP Billiton saw its shares slumping in the first seven months of listing since May 2015 amid a commodity prices rout, but had in mid-August rebounded to trade above its debut price of $2.13 for the first time.

Much of that rally could be due to South32’s improvement in the second half of FY16 that allowed it to deliver its first full-year underlying profit that was better than analyst expectations.

The miner, which produces minerals such as manganese ore, silver and aluminium, lowered costs and capital expenditure by US$692m and boosted net cash to US$312m for the 12 months to June 30.

That enabled it to declare a maiden dividend of US1 cent per share and preserve cash for future expansion opportunities.

Credit Corp Group

  • Share price increase in 3Q: 55% to $18.62

Credit Corp Group (ASX: CCP) purchases individual and small business past-due debts from major financial institutions and utility providers, and restructures these debts for collection.

A key announcement from the company in the third quarter was its acquisition of National Credit Management from ASX-listed Thorn Group (ASX: TGA) for $22.6m. National Credit has debt purchasing and collection operations in Australia and New Zealand.

Following the purchase, Credit Corp said it will review its initial earnings guidance at its shareholders meeting on November 3. It stated that the deal will positively impact the group’s earnings in FY17.

Credit Corp in August said that NPAT for FY17 may grow by 13%-18% to $52m-$54m, from $45.9m this year, as prospects were positive for all its business divisions.

Resolute Mining

  • Share price increase in 3Q: 53.3% to $1.97

Resolute Mining (ASX: RSG), which operates gold mines in Australia and Mali in West Africa, was another new member of the ASX 200 following the September index review.

Its share price is up from 25 cents at the end of 2015, turning the gold miner into a $1.3bn company from $160m, in terms of market capitalisation, in nine months.

The spot price of gold had gained about 25% this year to September 30, according to Bloomberg data, as recurring share market volatility has prompted some investors to buy the precious metal that has traditionally been seen as an asset that can retain value during such turbulence.

Resolute Mining reported historic high NPAT of $213m in FY16, compared with a $569m loss a year earlier, as revenue from sales of gold and silver improved 20% and costs dropped to levels below the company’s guidance.

As its cash and bullion soared to $102m at end-June from $54m a year ago, Resolute managed to cut total borrowings by 77% over 12 months. The miner will pay a dividend of 1.7 cents a share on October 20, and has given eligible shareholders a choice to receive dividends in gold instead of cash.

Managing director and chief executive John Welborn said in late September Resolute is “at a very exciting period” of its history after it successfully raised $150m through sales of new shares. The company plans to use the funds to expand its mine in Queensland and for drilling activities in Ghana.

Worst performers

The telecommunication services and utilities sectors were the only two sectors that fell in the third quarter, losing 9% and 3.3% respectively.

Below are the stocks sitting at the bottom of the ASX 200 ladder:

Company

ASX code

Sept 30 last price

3Q share price decline

Galaxy Resources

GXY

$0.325

-34.3%

Seven West Media

SWM

$0.73

-31.1%

Estia Health

EHE

$3.32

-28%

TPG Telecom

TPM

$8.62

-27.6%

Syrah Resources

SYR

$4.38

-26.6%

Past performance is not a reliable indicator of future performance. Source: Bloomberg

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Past performance is not an indication of future performance. Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 and a Participant of the ASX Group and Chi-X Australia.