2 ASX stocks to hold – Medibank and Qantas AirwaysTeam Veye | 18 Jul 2018 ASX - MPL, QAN, QAN
Medibank Pvt Ltd (ASX: MPL)
The company had published its H1 FY2018 results on 16th Feb’18 highlighting that the Group’s Net Profit after Tax (NPAT) during the period stood at $245.6m up 5.9%. The company had cash in hand of $610m as on 31st Dec’18, up 16.3% on PCP.
As part of its outlook, the company expected similar underlying revenue trends to the first half adjusted for the 3.88% rate change on 1st Apr’18. The company didn’t expect any material change in hospital utilization growth in the second half and ancillary utilization growth was expected to be moderately lower (Data Source – Company Reports).
The stock price of the company had slipped 16% between Feb’18 and mid-Apr’18 but is already on its way to a slow recovery. We reckon that the stock has an upside potential and is likely to recover and grow further. We maintain a “Hold” on “Medibank Pvt Ltd” at the current price of $3.06
Qantas Airways Ltd (ASX: QAN)
On 22nd Feb’18, the Qantas Group announced delivering its highest-ever first half Underlying Profit before Tax of $976 million for the six months ending 31st Dec’17. The result surpassed the previous record of $921 million achieved in the first half of FY16 and comes despite recent increases in fuel costs and continued international capacity growth. Both Underlying and Statutory profit before tax were significantly higher (15% and 20% respectively) than the first half of FY17. Net debt continued to fall and remain towards the bottom of the range, at $5.1 billion.
As part of its Outlook, the company was very positive and stated that the Group expected healthy consumer demand growth consistent with an improved global outlook. The Group’s current operating expectations were: - Total Qantas Group capacity is expected to increase by ~1% in H2 FY2018 (Data Source – Company Reports).
The stock price of the company has grown an exceptional 31% YTD 2018 and touched an all-time high of $6.71 on 21st Jun’18 and still seems to have a lot of upside potential. We give a “Hold” to “Qantas Airways Ltd” at the current price of $6.52
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