The New Zealand sharemarket has fallen away from record levels thanks to global investor fears about Britain potentially leaving the European Union following today's so-called Brexit referendum.
But it still looks decidedly pricey.
At yesterday's opening level of 6781.7, the S&P/NZX 50 Index was trading at roughly 19 times earnings, well above the historical average.
It comes as little surprise, then, that in the past week Morningstar has zeroed in on two constituents of the index, Freightways and Port of Tauranga, and flagged their valuations as being stretched.
In a note, the international research provider said the Bay of Plenty port - whose shares closed at $19.60 last night, giving the company an earnings multiple of around 34 times - looks "substantially overvalued".
Morningstar has a "reduce" recommendation and a fair value estimate of $15.50 on the stock, which has gained around 15 per cent in the past year.
"While Chinese stimulus and improved sentiment may provide some near-term support to exports, we believe the stimulus will subside and weigh on housing construction and thus log volumes and other exports," Morningstar said. "Further, weak dairy prices are also a headwind, a possible catalyst for declines in the share price towards our fair value estimate."
Still, the report said the long-term outlook remained strong for the port, which is poised to take market share from smaller, less efficient ports, while also benefiting from its soon-to-be completed, $350 million investment programme aimed at preparing the facility for larger ships.
In another note, Morningstar said Freightways shares - which have gained 13 per cent in the past 12 months to close at $6.46 last night - were almost 20 per cent overvalued relative to its $5.50 fair value estimate.
"In our view, the market is extrapolating from the acquisition-fuelled growth coming out of the information [management] business, while underestimating the potential long-term risks associated with this type of growth strategy," the report said.
"Additionally, we remain cautious on the near-term outlook for the core express package and business mail division. Given that the core business is largely driven by broad macroeconomic factors and accounts for roughly two-thirds of group earnings, subdued global economic growth and heightened market volatility are risks."
Investors could soon be getting better access to historical market announcements on the NZX website.
In its annual review of the sharemarket operator, released yesterday, the Financial Markets Authority said the exchange had an obligation under new legislation to keep disclosures available.
At present, the lesser of 50 announcements or six months' historical disclosures can be found on NZX's website, according to the FMA. A paid subscription is required to access all other announcements.
Historical releases can usually be dug out of the issuers' own websites, but - let's be honest - having to do that is a bit of a pain.
"We discussed this new obligation with NZX and we understand that NZX intends to amend the format of its website to make more historical announcements available free," the FMA said in its report. "This may be done in stages and we will continue to work with NZX on this issue."
Flagging the road to riches
Craigs Investment Partners has initiated coverage of Tourism Holdings with a bullish view on its prospects, flagging the potential for further gains in the campervan rental operator's already strongly-performing shares.
Craigs analyst Nachi Moghe has slapped a $3.30 target price on the stock, which closed at $2.75 last night and has gained 152 per cent since mid-2014.
The Auckland-based firm, once a perennial sharemarket underperformer, has been a major beneficiary of a tourism boom aided by weakness in the Kiwi dollar and cheap fuel.
"The outlook for the tourism sector is positive, especially from emerging markets like China, fuelled by capacity growth from airlines," Moghe said in a note. "With solid medium-term growth prospects and an attractive dividend yield, the risk/reward ratio for the stock is favourable, despite the stupendous rise in the share price over the last 12 to 18 months."