(02) 8027 1000

We make investing
accessible to everyone

Stock News: what stood out this week

Vita Group (ASX:VTG)

Former market darling Vita Group (ASX:VTG), the Telstra retailer, surprised investors once more with an earnings downgrade and the reworking of the commercial relationship with Telstra. The stock dropped 30% on Thursday. Remuneration changes from earlier this financial year were only partly offset with new store additions: guidance for the current year implies a poor second half and a 20% downgrade for next financial year. Meanwhile the widely publicised pressure on Telstra in the mobility market has forced a rethink of remuneration for partners like Vita; another uncertainty for investors to consider. Glennon Capital does not own VTG in the portfolio.

GrainCorp (ASX:GNC)

On Thursday GrainCorp (ASX:GNC) announced a strong set of first half (to March) numbers and the stock rose 8%. A large east coast crop helped the business’s storage and logistics segment deliver earnings before interest, taxation, depreciation and amortisation of $113m, up from $28m last year. This places GrainCorp in a position to be at the top end of their guidance range for this financial year, despite dealing with a $10m hit from an industrial dispute at their Victorian rail operator. Glennon Capital does not own GNC in the portfolio.

Quintis (ASX:QIN)

Another disaster this week was Quintis (ASX:QIN), the old TFS Corporation, a sandalwood plantation business. The stock dropped 44% on Wednesday followed by another fall of 23% on Thursday. The latest problems stemmed from a failure to alert the board and investors that a high profile contract was terminated back in December. In March short seller Glaucus released a report valuing the equity of QIN at zero, stating it had concerns about the business model, Ponzi-like marketing, and phantom product buyers. Then founder and managing director Frank Wilson resigned from the business. Glennon Capital does not own QIN in the portfolio.

Get in touch or sign up to our newsletter today.

The information contained in this article or video is general in nature and does not consider your personal financial situation.  The information is not a recommendation or offer to buy securities.  You are advised to seek professional financial advice prior to making any investment decisions.  The views expressed in this video may change at any time, such is the nature of the investment markets.

Written by Glennon Capital
Article posted 12/05/17