Food for thought in big four reports


It's been a long six months between drinks on the markets, but as of this week we have another reporting season about to commence.

Last reporting season was in August 2011, which coincided with the ASX 200 Index breaking the 4500 support level and the index has since spent the past six months bouncing between 3800 and 4400.

This week, the big four profit reports to watch are BHP, RIO, Telstra and Newcrest.

The interesting one will be Telstra (reporting today), which is locked in to paying a 28c/share (14c each six months) dividend for at least the next 12 months, making it one of the highest yielding stocks on the Australian share market.

This dividend is fully franked, which is a bonus for Australian investors, but a disadvantage to international investors who don't receive the same tax advantage.

In addition, throughout the year Telstra's largest shareholder, The Future Fund, reduce its ownership to just 0.8 per cent.

What this has done is to bring a whole new suite of Telstra shareholders onto the scene, so you may see some heightened volatility in the Telstra's shares during the next fortnight as the company reports and goes ex-dividend (ex-dividend date is expected to be Monday, February 20).

Newcrest is the last of the Top 20 stocks reporting this week when it reports tomorrow.

Despite the gold price being at record levels (currently floating at about $US1730 per ounce) Newcrest has had operational issues across its suite of mines, which goes a fair way to explaining why the stock has not tracked the gold price higher.

The operational issues thus far are quite well documented. I'll be keeping an eye on the forward production forecast to gauge the impact of the profit report on the share price.

BHP reported yesterday and RIO will follow today.

Information contained in this article does not consider your personal circumstances. You should consult a stockbroking professional before making any investment decisions. Sentinel may hold positions in stocks discussed from time to time.

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