Question 1: What did the analysts think of the CSL profit result. Do they still see upside?
Answer: Overall, the broker analysts thought it was a pretty in-line result. Target prices were lifted moderately, with the consensus target price now sitting at $327.45, about 6.5% higher than the last ASX price of $307.50. All major brokers have “buy” recommendations, noting that CSL is traditionally conservative with its guidance.
They see CSL Behring (the plasma business) doing most of the heavy lifting, with margin expansion and volume increases. Reduced demand for immunisations could impact Seqirus, while the jury is still out on CSL Vifor.
Question 2: I tried to get an allocation of the new Macquarie Capital Notes, but I am not a client of a “syndicate” broker. Is there another way to invest in these or other hybrids?
Answer: Unfortunately, retail investors have to be clients of syndicate brokers or financial advisers to get an allocation in a new issue of hybrid securities.
The securities will eventually be listed on the ASX, so one option is to buy on the ASX. In this case, Macquarie Capital Notes 7 are expected to commence trading on the ASX on 17 September. They will have the ticker of MQGPG.
Another option is to invest indirectly through an exchange traded fund. You could look at HBRD from Betashares or BANK from GlobalX
Question 3: Why did the market like Brambles result?
Answer: Brambles is a solid (but boring) industrial that has a unique position in the logistics market with its CHEP pallets. It trades on a fairly undemanding multiple of circa 20 times.
Brambles result was viewed as a “beat” (about 5% higher than forecast), with a higher than expected full year dividend of 34 US cents (about A$0.50). Guidance for next year was higher, with sales growth of 4% to 6%, underlying profit growth of 8% to 11%, and capital management initiatives including an on-market share buyback of US$500m.
Question 4: I am in CBA’s Dividend Re-Investment Plan (DRP). With the next dividend, is it too late to get it paid to me in cash rather than get more shares issued at these crazy prices?
Answer: It is not too late, but you will need to hurry. The cut-off for a change of election is 5pm on Friday 23 August. Log on your holding via the share registry (Link Market Services).
