Stocks to watch at the open

Air New Zealand has increased its stake in Virgin Australia and while Coca Cola product volume declines, prices are still on the up.

Virgin Australia Holdings (VAH)

Air New Zealand has been approved to increase its shareholding in Virgin to 25.9%.

The additional 3% of shares to be acquired to take Air New Zealand to their new limit will be acquired under an existing forward contract.

Given the troubles Virgin has faced, continuing interest from Air New Zealand and Etihad highlights the confidence international airlines have in the strategy pursued by Virgin.

Virgin reached 47 cents in mid-September but has given up ground in recent weeks to be trading at 42.5 cents.

Coca-Cola Amatil (CCL)

A slowdown in soft-drink sales continues despite Coca-Cola’s quest to maximise profit through a focus on pricing and pack sizes according to Credit Suisse.

Australia’s obesity rates continue to rise as we fail to slow down our consumption of foods nutritionists would have on the black list. While the promotion of healthier alternatives is on the up, the trend is to avoid these foods.

The focus of investors has been on declining product volumes, but prices are still rising — providing plenty of upside for the soft-drink retailer.

Credit Suisse have a target price of $15.10. Other analysts estimate it to fall to around the $12 mark.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles