Morningstar Equities Research – 5 July 2013

Opinion – Morningstar Equities Research

Solid Fourth-Quarter Volume Growth Maintains Strong Momentum. Sky Network Television Limited SKT-NZ| Sky TV Rules the Roost in Pay Television, but Will Competition Intensify?Sirtex Medical Limited SRX| Solid Fourth-Quarter Volume Growth Maintains Strong Momentum
Morningstar Recommendation: Hold
James Cooper, Morningstar Analyst - 

Sirtex reported a 13.1% increase in fourth-quarter fiscal 2013 sales. Sirtex’s Americas division – its largest regional business – grew dose sales 17%. This is well above third-quarter growth of only 6.1%. The Asia-Pacific division grew volumes 21% (off a small base), while the Europe, Middle East and Africa (EMEA) region posted 1% growth. Dose sales for the full fiscal year 2013 grew 19%, compared with 23% in fiscal year 2012, 19% in fiscal year 2011, and 14% in fiscal year 2010.

Sky Network Television Limited SKT-NZ| Sky TV Rules the Roost in Pay Television, but Will Competition Intensify?
Morningstar Recommendation: Hold
Nachiket Moghe, CFA, Morningstar Analyst 
-

We’re lowering our moat trend rating on Sky TV to negative from stable. We believe the Internet will become a viable option for distributing content to subscribers, thereby opening the market up to a whole host of competitors. We believe the current rollout of the ultrafast broadband network across New Zealand and the ensuing improvements in broadband infrastructure will act as a catalyst for streaming programs and videos via the Internet. Also, content disintermediation (i.e. content providers bypassing cable operators) could become more prevalent in the future than is currently the case, pitting Sky TV directly against content producers. These changes will likely weaken Sky TV’s monopolistic position, and have the potential to pressure long-run margins and returns.

Tower - Downgrade due to price change
WorleyParson – Downgrade due to price change
Ardent Leisure - Downgrade due to price change
Computershare - Upgrade due to price change
Independence Group - Downgrade due to price change
Insurance Aust. Grp. - Upgrade due to price change
Fisher & Paykel Healthcare - Downgrade due to price change

Morningstar Equities Research Tables and Information:

http://img.scoop.co.nz/media/pdfs/1307/Morningstar_Equities_Research_050713.pdf

ENDS

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