Sweet outlook for Capilano
AUSTRALIAN shares are off more than 11 per cent since their April peak but Queensland’s Capilano honey has emerged as a market darling.
It is Queensland’s top performing stock since April 27 when the ASX 200 hit its high for the year of almost 5983 points.
Shares in the honey producer have soared 62 per cent since then, to $18.50 on Friday, according to the Deloitte Queensland Index.
Investors were excited by the positive earnings growth, a falling Australian dollar and strong exports into Europe and the Middle East proving Capilano has a lot of legs yet.
“The agricultural index has been outperforming the ASX by 63 per cent in 2015 and Capilano is a major part of that,” IG market strategist Evan Lucas said. “It’s becoming the company many people hoped it would be.”
Since stocks shot out of the blocks at the start of the year, with the ASX 200 posting is best first quarter performance since it was founded in 2000, Queensland shares have taken a beating amid China’s stockmarket chaos. Despite market jitters in recent months, some Queensland stocks have made stellar advances.
Collins Foods share price has soared 35 per cent to $3.30 since April 27 on the back of a strong earnings increases for its KFC stores.
Developer Watpac (up 14.4 per cent to 87.5¢ in the past four months) performed par- ticularly well, as the construction sector has ramped up.
“It’s good to see Watpac turn around, they’ve had some contracts fall by the wayside but with a few new projects they should pick up,” Mr Lucas said.
Casino group Echo Entertainment, which plans to change its name to The Star Entertainment Group, has also rewarded investors, with its shares up 6.7 per cent to $4.91 since April 27. Earlier this year, Echo won the right to develop Brisbane’s prestigious Queen’s Wharf project.
“Queensland is going to be a big factor in Echo’s success as they attempt to attract Asian high-rollers,” Mr Lucas said.
“Although Sydney is a premium location it doesn’t have as good a climate and with so many Echo Entertainment projects up and down the coast its going to be a big draw card over rival Crown.”
The retail sector faced headwinds in recent months, as consumers worried about how the economy would cope with the mining downturn and China slowdown.
Domino’s continued to deliver strong sales growth, pushing its share price up more than 6 per cent to $40.07 since April 27. The stock hit an alltime high of $43.30 earlier this month ahead of its announcement of a 40 per cent jump in full year net profit to $64 million. It also announced plans to rollout a new GPS driver tracker app and a 15 and 20-minute delivery guarantee.
But Super Retail Group struggled to boost profits with the restructuring of Rays Out- doors and Workout World, and its shares dropped almost 11 per cent to $8.90 over the four months. Shares in Flight Centre have slipped 17.5 per cent to $36.40 since April 27.
Morgans analyst Tom Sartor said the performance of retailers, banking and mining stocks in recent months have given “a really good insight into customers”.
“Although they have reported benign growth, relative to last year, it is a real health check for the Queensland economy which is looking a lot worse today,” Mr Sartor said.
“It signals that the mining boom is coming to a close ... we’re seeing soft commodities like fresh food, powdered milk and honey getting a positive rerating and a derating of hard commodity exports.”