AP Eagers (APE) $14.20Automotive Holdings (AHE) $2.53
BETWEEN flitting abroad for holidays allegedly stressed consumers are still flocking to car yards to chase those crazy "drive away, no more to pay" deals. But as this week's collapse of another auto components supplier attests, they prefer foreign marques to the "Conform-odores" and "can't af-Fords".
The Brisbane-based AP Eagers yesterday pointed to another record first-half profit in June, 20-25 per cent higher than the first-half 2011 profit of $27.9 million.
There's an element of "cycling" in that the previous period was affected by supply constraints resulting from the Queensland and Thailand floods and the Japanese tsunami.
Still, industry-wide data suggests car sales have grown 4.7 per cent to date, with heavy vehicles (which AP Eagers also sells) surging 13.7 per cent.
The trend is also the friend for the land's biggest dealership, the Perth-based Automotive Holdings.
The company reported a 10 per cent rise in interim profit to $32.6m and CEO Bronte Howson yesterday said the group had a solid third quarter in March, with supply returning to normal. "I expect we will see a solid end to the financial year," says Howson, who notes the transport logistics side of the business - which accounts for 35 per cent of revenues after recent acquisitions - is also on smooth bitumen.
We last had Automotive Holdings and AP Eagers as buys at $2.17 and $10.90 in September last year. At the time these exposures offered BMW quality at a Hyundai price, but the share surges since then means we'll call them holds, and throw in free tinting as well.
Webjet (WEB) $3.46
Wotif (WTF) $4.64
Flight Centre (FLT) $21.50
THIS travel trio are flying high, surging 38 per cent, 28 per cent and 33 per cent, respectively, since the start of the year.
Who cares about Japanese tourists staying away from the Gold Coast in droves when you can get a Bali package for $399?
Online booking group Webjet this week upped its full-year guidance to "not less than" $13m, up 18 per cent, a further increment on its February 8 guidance of $12.1m (up 10 per cent) This "extraordinarily strong" growth (in broker EL & C Baillieu's words) results partly from market-share growth: while the sector has been growing at 5-7 per cent, Webjet has been zooming along in the double digits.
Meanwhile, Shaw Stockbroking declares Wotif, which specialises in last-minute hotel bookings, as overcooked, despite above-industry growth and its brand-building in the Asian market.
We recently had Webjet, Wotif and Flight Centre as long-term buys at $2.41, $3.74 and $21.49 respectively. There's still a case for value at Webjet so we'll maintain the long-term buy call for it, while we'll place Flight Centre in a holding pattern.
With the strong Aussie hurting domestic leisure market, we'll moderate Wotif to an avoid.
Atomic explosion
NEXT Thursday, Japan's cabinet meets to discuss what was unthinkable just over a year ago: the start-up of two of the country's 56 idle reactors (no, not the Fukushima ones).
With the country 30 per cent-reliant on nuclear power there's been a gaping energy hole, mitigated by the country's economic downturn. Still, it's not exactly a shortfall that can be filled with bicycle-powered generators. "With demand expected to return from Japan and 60 nuclear reactors under construction globally ... the long-term fundamentals for uranium demand remain robust," Foster Stockbroking says.
At $US51 a pound, the spot uranium price is only a smidge above its post Fukushima lows and well off its 2007 record of $US140/lb. But the point is that, like the stricken reactors, it appears to be stabilising.
Our favoured uranium exposure Paladin Energy (PDN, $1.80) doesn't sell to Japan, but is a collateral beneficiary if spot prices rally.
Down the evolutionary curve, Uranex (UNX, 29.5) has a flagship project (Mkuju) in Tanzania, not far from Paladin's Kayelekera mine in Malawi. Uranex is worth a punt at its current price, the catalyst being a maiden resource estimate for its Likuyu North prospect (part of Mkuju) this month.
borehamt@theaustralian.com.au
The Weekend Australian accepts no responsibility for stock recommendations. Readers should contact a licensed financial adviser. The author does not hold shares in the stocks mentioned.
