GS JBWere favours Sky TV, F&P Healthcare as downturn endures

Wednesday 10th June 2009

Pay-TV operator Sky Television Network and respiratory ventilator-maker Fisher & Paykel Healthcare are well placed to ride out New Zealand’s first recession in a decade, according to Goldman Sachs JBWere’s head of asset management.

Sky has cemented its market position with the introduction of new products such as the PVR decoder, which allows customers to record their favourite programmes through My Sky, the firm’s head of asset management, Stephen Walker, says. Unlike media rivals, it doesn’t have a heavy dependence on advertising revenue, which has suffered in the downturn. Shares of Sky rose 0.7% to $4.38 today and have climbed 19% this year.

Sky has “little or no exposure to advertising,” Walker told an audience of financial advisers in Wellington. “It’s more stable despite its depressed earnings in the short-term – it’s better in actual value terms, which increased.”

F&P Healthcare has 80% of the global market for respiratory ventilators used in hospitals and has extended its range of medical consumables, Walker said. The stock sank 1.6% to $3.10 today, and has slipped 2.2% since the start of the year.

The manufacturer has an average rating of “outperform,” based on estimates on nine analysts collated by Reuters.

The global economy is showing “tentative signs of stabilisation” GSJBW said in its May Trans-Tasman Equity Unit Trust report. Still, there are question marks about how sustainable the recent rally in stock markets will be.

Sky TV and F&P Healthcare are two of the top five holdings in the firm’s unit trust. BHP Billiton, Fletcher Building and Westpac Banking round out the list, which makes up 53.8% of the $23.1 million portfolio.

Walker said he favours BHP over fellow miner Rio Tinto, as BHP’s stock of raw materials, including copper and iron ore, had a greater penetration into the Chinese market. Still, GSJBW has increased its exposure to Rio following the proposed iron ore joint venture with BHP.

Shares of BHP rose 3.2% to A$37.66 on the S&P/ASX 200 Index today, while Rio advanced 3.4% to A$73.

Businesswire.co.nz

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