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26 August 2016 | Insights

Weekly Review 26/08/2016

Weekly Review

Investors spent the week wading through swags of company earnings reports, continuing the busy reporting period that began last week. At the close of Fridays trade, the S&P ASX/200 index had moved marginally lower to 5515.5, 11 points lower than the close of last weeks trade.

SA based Mayne Pharma’s (MYX.ASX) shares climbed 3.39 per cent after its annual profit more than quadrupled to $37 million. The result was driven by acquisitions and new drugs that were brought to the market over the period.

Coca-Cola Amati (CCL.ASX) ended down 2.9%  for the week after reporting a dip in soft drink sales, though its half year profit improved by 8% to $198 million led by water and energy drink sales. Mount Franklin and Monster energy were the stand out brands in Coca-Cola’s portfolio.

Blackmores Limited (BKL.ASX) saw a 21.72% drop in its share price over the week, following its annual report to shareholders on Wednesday. Sales rose 52% and profit after tax jumped by 115% on the corresponding period last year, however it missed market expectations. It is worth noting that the share price is still 62% higher than it was at this time last year.

Staff at Baker Young spoke with emerging social media company Migme (MIG.ASX) during the week. Migme is currently trading at yearly lows and the share price chart would make an investor suspect the company is struggling. However, our conference call with management highlighted that the company is not only on track but growing rapidly and quickly becoming the dominant player in its market. Management reiterated that the significance of the deal with ‘MOX Accelerator’, which has the potential to drive the monthly active users on the social media platform significantly higher in the next twelve months. It is also expected that there will be an uplift in revenue from their gaming division over the coming quarter, which operates at healthy margins. Finally, we discussed their expenses, which are on the decline, albeit from a very high base, as a result of a drastic reduction in fees being paid to sign on ‘celebrities’ to the platform (from ~$100,000 down to ~$5,000).

Migme is still very much a high risk, highly speculative play but a one to keep an eye on due to the phenomenal track the platform is gaining.