FNArena Reporting Season Monitor February 2016

This story features GRANGE RESOURCES LIMITED, and other companies. For more info SHARE ANALYSIS: GRR

Download related file: FNArena-Reporting-Season-Monitor-02-16

Welcome to FNArena's Reporting Season Monitor for the February 2016 result season. The Monitor takes the form of an attached Excel spreadsheet. Companies will be added to the spreadsheet each day following the previous day's result release, ultimately building to a comprehensive summary of in excess of 300 stocks under FNArena database broker coverage.

The spreadsheet contains ratings and consensus target price changes along with brief summaries of the collective responses from FNArena database brokers for each individual corporate result, and an assessment of “beats” and “misses”.

For further information on the relevance of this information, please see the Guide below.

New to this season's Monitor is a "Brokers Covering" column indicating how many of the FNArena database brokers cover each stock, ranging from one to eight. For easier appreciation, broker ratings Buy, Outperform, Overweight and Add are all collated as "Buy", Hold, Neutral and Equal-weight as "Hold", and Sell, Underperform, Underweight and Reduce as "Sell".

New to this season's Monitor is database broker Ord Minnett. Ords uses a five tier rating scale, as opposed to the standard three, of Buy, Accumulate, Hold, Lighten and Sell. To maintain consistency the Monitor will classify both Buy and Accumulate as "Buy" and Lighten and Sell as "Sell". However intra-tier up/downgrades will be noted.

To access the spreadsheet simply click on the attached document.

Today's Stocks: Grange Resources ((GRR)), Kingsgate Consolidated ((KCN)), LatAm Autos ((LAA)), Medusa Mining ((MML)), Pacific Current Group ((PAC)), Panoramic Resources ((PAN)), PS&C ((PSZ))

Guide:

Each day of the Australian six-monthly reporting season, FNArena provides a summary of broker responses to the previous day's profit result releases from companies under coverage. Readers are reminded that it matters not what actual profit/loss result is posted by each company but by how much that result exceeded/fell short of stock analysts' consensus forecasts. Stock price movements on the day of release, and in many cases for the months following the release, will often be determined by the extent of "beats" and "misses" of underlying earnings as well as company guidance and analyst/management outlook.

A rolling summary table (Excel) is attached to each day's report and will build as the season progresses. Additions are made each day, consistent with release dates, and stocks will then be listed in alphabetical order for ease of use until the full picture of the reporting season emerges.

Note that companies assessed include only those covered by the eight major stockbrokers in the FNArena database and that ratings changes and targets are those provided only by the database brokers.

Note also that "beat" and "miss" assessments are open to an element of subjectivity and not simply a result-versus-consensus-forecast comparison. Mitigating factors include one-off items, top line versus bottom line relevance, forward guidance as an important consideration and so forth. In many cases "profit" per se is not the most relevant performance indicator.

Australian corporate results tend to focus on the profit line, with all its inherent potential for accounting vagaries, tax changes, asset write-downs and other “one-off” impacts. FNArena has focused mostly on underlying earnings results (more in line with Wall Street practice) as a more valuable indicator of whether or not a company has outperformed or underperformed broker expectations. There is also a level of “quality” assessment here rather than simple blind “quantity”.

Disclaimer:

While FNArena's Reporting Season Monitor is being compiled with great care and our best endeavours, investors should note that we cannot guarantee that all data and information gathered and on display is 100% accurate at all times. FNArena does not accept any responsibility for errors and omissions that can occur. Investors should always do their own research and consult with a financial expert before making investment decisions. FNArena's Reporting Season Monitor is an informative tool, it does not not contain investment advice and should not be treated as such.

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