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Research Underscores Confusion Over Automated Driving Systems
Consumer Reports has no financial relationship with advertisers on this site. Consumer Reports has no financial relationship with advertisers on this site. Automakers are marketing their partially automated driving systems in ways that confuse consumers, and that could lead to potentially dangerous situations, according to new research by the Insurance Institute for Highway Safety (IIHS). Systems such as Tesla’s Autopilot, Cadillac's Super Cruise, and Nissan's ProPilot Assist can automatically steer, brake, and adjust vehicle speeds with increasing skill and limited driver input. Motorists can quickly come to trust them, but there are limits to what the technologies can do and consumers aren’t always aware of those limits, IIHS says. IIHS asked consumers to interpret the names of these systems and respond to questions about whether they thought particular behaviors would be safe while using the technology. Most of the consumers hadn't used the particular systems; their expectations were being measured. The systems' names imply a much greater level of automation than they deliver in the real world, IIHS says. Tesla’s Autopilot in particular led consumers to believe that drivers “can turn their thoughts and their eyes elsewhere,” the survey found. All of the automakers whose systems were mentioned in this study responded to questions from Consumer Reports, reiterating that their systems require drivers to remain vigilant at all times and that none of the systems currently provide self-driving capabilities. Consumer Reports has long expressed concern about names such as Autopilot that suggest the systems are “piloting” vehicles, says Jake Fisher, senior director of auto testing at Consumer Reports. These names seem to imply that the technology can do a lot more than it can, he says. “Between the name and the presentation, consumers can easily get the wrong idea of the capabilities of these technologies,” Fisher says. Story continues The systems in today’s cars are generally unable to react in unusual or emergency situations. They’re designed to be used in very limited circumstances—usually on divided highways with entrance and exit ramps, such as interstates. But because most systems are not limited to those types of circumstances, consumers often use them on other types of roads, too. There are clearly upsides to the technology, says IIHS president David Harkey, but drivers need to really understand what they have in their car. “Current levels of automation could potentially improve safety,” he says. “However, unless drivers have a certain amount of knowledge and comprehension, these new features also have the potential to create new risks.” As part of the survey, IIHS asked consumers to comment, based on the systems’ names, whether Autopilot and Super Cruise seemed designed to permit hands-free driving. The respondents got it exactly wrong, says CR’s Fisher. Almost half of the respondents thought Autopilot could be safely used hands-free. Only about 28 percent thought the same of Super Cruise. The reality is Autopilot can’t be used safely without the driver holding the steering wheel, Fisher says, and Tesla attempts to train its drivers with a series of warnings. Cadillac’s Super Cruise, by contrast, is a hands-free driving system. Cadillac uses a cabin-facing camera to monitor drivers to ensure they’re paying attention to the road, but their hands aren’t required to remain on the steering wheel. The car eventually lets the driver know—through a series of warnings—that it’s time for him to take back control. Tesla offers consumer training on Autopilot, as well as in-car instructions, both before the driver uses the system and while he's in the car, the company says. If a Tesla vehicle detects that a driver is not engaged while using Autopilot, the car will prohibit the driver from using it for the rest of that trip. Last October, Consumer Reports released its first ratings of automated driving technologies—systems on the road today that can assist drivers without being capable of full automation. There is no fully autonomous vehicle on the road today. In those rankings of four systems, GM’s Super Cruise came in first based on its high-tech capabilities and how it ensures the driver is paying attention. Autopilot scored highly for its capabilities and ease of use, while Nissan’s ProPilot Assist was better at keeping drivers engaged. Volvo’s Pilot Assist scored comparatively lower. The most important issue for consumers as automated technology evolves is to understand whether they’re driving—or riding, CR’s Fisher says. As self-driving cars become closer to reality, the “levels of automation” set out by the Society of Automotive Engineers don’t convey the most essential point of who’s responsible for the driving task. It boils down to whether the car is in control or the human is, he says. And all of the vehicles on the market today require the human to be responsible for driving. CR reached out to the six automakers named in the IIHS research: Acura, Audi, BMW, GM, Nissan, and Tesla. Here are their reactions to IIHS's findings about consumer confusion over the systems' names. Acura: Acura’s system, named Traffic Jam Assist, was “the least misunderstood” in the IIHS study, spokesman Chris Naughton says. “The system name includes the word ‘assist’ by intention to ensure that drivers better understand that the system is designed to assist them in driving tasks, not drive autonomously.” Audi: The company has long advocated “for a more measured approach when it comes to vehicle autonomy,” spokesman Mark Dahncke says. Audi’s system—also named Traffic Jam Assist—is marketed as a “feature that assists the driver who remains in control.” BMW: The company’s Driver Assistance Plus is a package of optional features, including lane keeping assist and Extended Traffic Jam Assist, spokesman Oleg Stanovsky says. Both systems use sensors in the steering wheel and driver-facing sensors to monitor whether drivers are paying attention, he says. BMW also emphasizes training drivers at the time of purchase. A “BMW Genius” spends “as much time as needed” to explain to new owners how their vehicle technology works, Stanovsky says. “BMW has always believed that the driver is responsible for the operation of their vehicle, and while driver assistance systems help make the driving experience safer and more relaxing in certain conditions, they do not relieve the driver of their responsibility of operating their vehicle.” GM: Super Cruise is the industry’s first “true hands-free driver assistance system for compatible highways, and not an autonomous-vehicle technology,” says Stefan Cross, a spokesman for GM. The automaker says it ensures Cadillac dealers are thoroughly trained on Super Cruise, which is currently available on the CT6, Cross says. The system will be available in the 2020 Cadillac CT5, and GM is “ramping up our marketing efforts around the technology.” Nissan: The automaker is “clearly communicating ProPilot Assist as a system to aid the driver, and it requires hands-on operation,” says Steve Yaeger, a company spokesman. “The driver maintains control of the vehicle at all times.” Tesla: Tesla says it provides its owners with clear guidance on how to properly use Autopilot, as well as in-car instructions, available both before they use the system and while the feature is in use. If a Tesla detects that a driver is not engaged while using Autopilot, the car will prohibit the driver from using it for the rest of that trip, the company says. “This survey is not representative of the perceptions of Tesla owners or people who have experience using Autopilot, and it would be inaccurate to suggest as much,” the company said in a statement. “If IIHS is opposed to the name ‘Autopilot,’ presumably they are equally opposed to the name ‘Automobile’.” CR’s concern about emerging technologies and consumer confusion goes beyond just these kinds of systems, Fisher says. CR has been working with other safety groups, federal regulators, and car companies to come up with standard, easy-to-understand names for key safety technologies, similar to terms like "forward collision warning," "automatic emergency braking," and "blind spot warning." Automakers have created dozens of brand names for these increasingly common safety features. The coalition that CR works with urges automakers to use agreed-upon names and descriptions so that consumers will be able to fully understand the capabilities their cars have—and don’t have. More from Consumer Reports: Top pick tires for 2016 Best used cars for $25,000 and less 7 best mattresses for couples Consumer Reports is an independent, nonprofit organization that works side by side with consumers to create a fairer, safer, and healthier world. CR does not endorse products or services, and does not accept advertising. Copyright © 2019, Consumer Reports, Inc. |
Could AB Electrolux (publ)'s (STO:ELUX B) Investor Composition Influence The Stock Price?
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If you want to know who really controls AB Electrolux (publ) (STO:ELUX B), then you'll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that have been privatized tend to have low insider ownership.
AB Electrolux is a pretty big company. It has a market capitalization of kr68b. Normally institutions would own a significant portion of a company this size. In the chart below below, we can see that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about ELUX B.
View our latest analysis for AB Electrolux
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors own 49% of AB Electrolux. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at AB Electrolux's earnings history, below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in AB Electrolux. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our information suggests that AB Electrolux (publ) insiders own under 1% of the company. Keep in mind that it's a big company, and the insiders own kr65m worth of shares. The absolute value might be more important than the proportional share. It is always good to see at least some insider ownership, but it might be worth checkingif those insiders have been selling.
The general public, with a 33% stake in the company, will not easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private equity firms hold a 18% stake in ELUX B. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.
I like to dive deeperinto how a company has performed in the past. You can findhistoric revenue and earnings in thisdetailed graph.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss thisfreereport on analyst forecasts.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Should You Think About Buying Lindab International AB (STO:LIAB) Now?
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Lindab International AB (STO:LIAB), which is in the building business, and is based in Sweden, received a lot of attention from a substantial price increase on the OM over the last few months. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Lindab International’s outlook and value based on the most recent financial data to see if the opportunity still exists.
See our latest analysis for Lindab International
Great news for investors – Lindab International is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is SEK151.52, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Another thing to keep in mind is that Lindab International’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Lindab International’s earnings over the next few years are expected to increase by 33%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
Are you a shareholder?Since LIAB is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor?If you’ve been keeping an eye on LIAB for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy LIAB. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Lindab International. You can find everything you need to know about Lindab International inthe latest infographic research report. If you are no longer interested in Lindab International, you can use our free platform to see my list of over50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Data 'R' Us: Alibaba, JD.com seek to lock in merchant loyalty with new services
By Cate Cadell and Pei Li
BEIJING/HANGZHOU, China (Reuters) - In China, the sales maxim of 'know your customer' is being taken to new lengths.
One of the first firms to join an Alibaba Group Holding Ltd programme that provides years of consumer shopping history, snack food chain Bestore Co Ltd plans to link facial recognition technology with the e-commerce giant's account data by the year's end.
For customers opting to have their facial data in Bestore's systems, that means shop assistants will be able to check on what food they like the moment they enter one of its stores.
Bestore, which already offers customers the option of paying with Alibaba's face scanning tablets, has also started using Alibaba's other services for more successful marketing.
It can now arrange for a person who likes salty food, owns an SUV and probably has a family to receive an ad suggesting suitable Bestore snacks for a Spring holiday road trip, Huang Xiao, Bestore's head of e-commerce, told Reuters.
"With the partnership, our strategies are more focused, sales behaviours are more targeted and resources are better allocated," Huang said.
The Alibaba programme, called A100 and which counts Nestle SA and Procter & Gamble Co as clients, is part of a major push by e-commerce giants in China to retool their relationship with merchants - offering them a trove of shopper data in return for broader and closer partnerships.
The shift is integral to what Chinese e-commerce firms call 'new retail' or 'boundary-less retail' - the marrying of data available from internet shopping and gathered through brick-and-mortar stores to provide highly personalised services.
It has been enabled by the widespread use of payments by smartphone, the rise of facial recognition technology and Chinese consumer tolerance of data-sharing between businesses.
Hangzhou-based Alibaba said data used for analysis by brands is anonymised and personal information on customers is not shared.
Other services Alibaba offers to retail clients include shopper movement 'heat maps' to help stores better design the layout of products, as well as its chat app Dingtalk to communicate within their own companies and with customers.
SEEKING MORE DATA
Keeping merchants happy and signing them up for more services has taken on added urgency for Alibaba and rival JD.com.
Both are seeking to diversify amid slowing e-commerce revenue growth at home - due in part to saturated markets in China's biggest cities, flagging consumer confidence from the U.S.-China trade war and increased competition from rivals such as newly listed Pinduoduo Inc.
"For Alibaba and JD.com this is critical for their overall ecosystem because they have pretty much already exhausted the online growth," said Beijing-based Jason Ding, partner at consulting firm Bain & Company.
By providing data-driven tools to retail stores, e-commerce firms can expand the amount of data collected. "It's not just about money, it's about continuing to grow, and hopefully they will find a way to monetise that," he said.
JD.com, which provides similar services to Alibaba, says it helped U.S. diaper brand "Huggies" work out why Chinese competitors were rising in popularity, prompting Huggies to change to a material that is more absorbent and comfortable when wet. That contributed to a 60% percent rise in Huggies sales on JD.com in 2018, the Chinese firm said.
A spokesman for Kimberly Clark, which owns the Huggies brand, declined to comment on the details of its partnership with JD.com.
After a trial run of a new product, JD.com said it creates a 'profile' of a potential buyer based on early sales that is cross-checked with its entire userbase, before targeted ads are sent to close matches.
Other tools JD.com offers to retail clients include an customer service chatbot powered by artificial intelligence that can the "sense" the mood of customers, and adjust its tone to appear more empathetic.
It has also rolled out checkouts in some Hong Kong convenience stores that can scan several items at once and charge customers using their ID-linked accounts, which it says cuts the average checkout time by 30%.
FREE FOR NOW
Both JD.com and Alibaba executives say they are not charging companies for most data services at the moment, noting the new partnerships facilitate sales of other services such as cloud computing and logistics.
Nestle, which sells Haagen Daaz and Nespresso through third-party retail locations in China, says it now has one warehouse instead of four after tapping into data at Alibaba distribution centers which give real-time updates on orders.
"You don't have to carry huge inventory in your warehouse," said Rashid Qureshi, chief executive of Nestle's Greater China business, adding it's the first time Nestle has integrated an e-commerce firm's data into its own systems.
Where previously Bestore and Nestle would have dealt with different parts of the Alibaba empire for delivery, payments, cloud computing and messaging, they now work with one Alibaba team dedicated to their company which organises a range of tailored services.
"It's a change that subverts the way our entire company has operated," Alibaba's Jet Jing told Reuters in an interview. Jing, formerly president of Alibaba's retail site Tmall, has since become assistant to CEO Daniel Zhang.
Alibaba has not disclosed how many companies are currently participating in its A100 programme, but some analysts say for now only big firms will be able to benefit as smaller firms do not have the funds to justify major organisational changes.
One risk for retailers, however, is that they may become overly dependent on their e-commerce partners.
The Chinese market remains tough for brands to crack independently and Alibaba and JD.com represent the two biggest online retail channels into the country. In the face of such tough competition, Amazon.com Inc said in April it is shutting its China online store.
"It's a must for the brands to be involved," says Bain & Company's Ding. "But everyone would like to have a balance and not put their eggs in one basket."
More broadly, questions remain over how big e-commerce firms manage their data in a way that is fair to all parties using their services.
EU regulators in September launched a preliminary antitrust investigation into Amazon over concerns it is collecting similar data from brands that it might use to boost competing products of its own.
Alibaba and JD.com do not produce their own products but both have made significant investments in retail stores including experimental grocery and convenience store formats.
(Reporting by Cate Cadell and Pei Li in Beijing; Additional reporting by Richa Naidu in Chicago; Editing by Edwina Gibbs) |
Volatility 101: Should Exel Industries Société Anonyme (EPA:EXE) Shares Have Dropped 41%?
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The simplest way to benefit from a rising market is to buy an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Unfortunately theExel Industries Société Anonyme(EPA:EXE) share price slid 41% over twelve months. That's disappointing when you consider the market returned 5.9%. To make matters worse, the returns over three years have also been really disappointing (the share price is 32% lower than three years ago). Furthermore, it's down 19% in about a quarter. That's not much fun for holders. This could be related to the recent financial results - you can catch up on the most recent data by readingour company report.
View our latest analysis for Exel Industries Société Anonyme
In his essayThe Superinvestors of Graham-and-DoddsvilleWarren Buffett described how share prices do not always rationally reflect the value of a business. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
Unhappily, Exel Industries Société Anonyme had to report a 6.0% decline in EPS over the last year. This reduction in EPS is not as bad as the 41% share price fall. This suggests the EPS fall has made some shareholders are more nervous about the business. The less favorable sentiment is reflected in its current P/E ratio of 9.36.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
Before buying or selling a stock, we always recommend a close examination ofhistoric growth trends, available here..
Investors should note that there's a difference between Exel Industries Société Anonyme's total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Dividends have been really beneficial for Exel Industries Société Anonyme shareholders, and that cash payout explains why its total shareholder loss of 40%, over the last year, isn't as bad as the share price return.
Exel Industries Société Anonyme shareholders are down 40% for the year (even including dividends), but the market itself is up 5.9%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 0.2%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Before deciding if you like the current share price, check how Exel Industries Société Anonyme scores on these3 valuation metrics.
Of courseExel Industries Société Anonyme may not be the best stock to buy. So you may wish to see thisfreecollection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on FR exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
American Outdoor Brands Corporation (AOBC) Q4 2019 Earnings Call Transcript
Image source: The Motley Fool.
American Outdoor Brands Corporation(NASDAQ: AOBC)Q4 2019 Earnings CallJun 19, 2019,5:00 p.m. ET
• Prepared Remarks
• Questions and Answers
• Call Participants
Operator
Good day, ladies and gentlemen, and welcome to the American Outdoor Brands Corporation Fourth Quarter and Full Year Fiscal 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode. (Operator Instructions) As a reminder, today's conference may be recorded. I'd now like to introduce your host for today's conference, Liz Sharp, Vice President of Investor Relations. Ma'am, please go ahead.
Liz Sharp--Vice President of Investor Relations
Thank you and good afternoon. Our comments today may contain predictions, estimates and other forward-looking statements. Our use of words like anticipate, project, estimate, expect, intend, believe, and other similar expressions is intended to identify those forward-looking statements. Forward-looking statements also include statements regarding revenue, earnings per share, non-GAAP earnings per share, fully diluted share count and tax rate for future periods, our product development, focus, objectives, strategies and vision, our strategic evolution, our market share and market demand for our products, market and inventory conditions related to our products and in our industry in general, and growth opportunities and trends.
Our forward-looking statements represent our current judgment about the future and they are subject to various risks and uncertainties. Risk factors and other considerations that could cause our actual results to be materially different are described in our securities filings, including our Forms 8-K, 10-K and 10-Q. You can find those documents as well as a replay of this call on our website at aob.com. Today's call contains time-sensitive information that is accurate only as of this time and we assume no obligation to update any forward-looking statements. Our actual results could differ materially from our statements today.
I have a few important items to note which regard to our comments on today's call. First, we reference certain non-GAAP financial measures on this call. Our non-GAAP results and guidance exclude goodwill impairment charges, the effects of tax reform, as well as acquisition-related costs, including amortization, debt extinguishment costs, recall-related expenses, one-time transition costs, a change in contingent consideration liability, fair value inventory step-up and the tax effect related to all of those adjustments.
The reconciliations of GAAP financial measures to non-GAAP financial measures, whether or not they are discussed on today's call, can be found in today's Form 8-K filing, as well as today's earnings press release which are posted on our website. Also, when we reference EPS, we are always referencing fully diluted EPS. For detailed information on our results, please refer to our annual report on Form 10-K for the year ended April 30, 2018.
I will now turn the call over to James Debney, President and CEO of American Outdoor Brands.
James Debney--President, CEO & Director
Thank you, Liz. Good afternoon and thanks everyone for joining us. With me on today's call is Jeff Buchanan, our CFO. Later in the call Jeff will provide a recap of our financial performance as well as our updated guidance. Fiscal 2019 was a year that presented several challenges for the firearms industry, including changes in the political environment and reduced consumer demand for both firearms and the accessories attached to them, such as lights, lasers and scopes.
Despite that backdrop, we delivered year-over-year growth in revenue and gross margin, and we believe we gained market share. And importantly, we made significant and exciting progress toward our long term strategy of being the leading provider of quality products for the shooting, hunting and rugged outdoor enthusiast. Today, I'll recap our accomplishments for the year in the context of our strategic plan, then Jeff will provide detail on our financial results and our outlook for the coming fiscal year.
You will find our strategic plan outlined in the Investor Presentation currently posted on our website. That plan consists of five main themes. The first of these is to remain focused on organic growth. Our objective is to harvest the growth potential of our 20 distinct brands by leveraging our deep understanding of the consumers' needs, wants and desires, and using that information as a leading light for our new product development pipeline. This approach allows us to further expand our overall addressable market and to establish ourselves in new product categories where we believe our brands have permission to play.
We made significant progress on this objective across our entire Company in fiscal 2019. In firearms, we introduced 106 new SKUs, including 32 meaningful new products and numerous line extensions. These included Performance Center versions of the SW22 Victory, a competition ready target pistol; a Thompson/Center long range rifle, a perfect match for the consumer's desire participate in precision target shooting; a ported M&P Shield 2.0, a Smith & Wesson M442 revolver, both designed for personal protection.
Our M&P 380 Shield EZ was honored by the NRA when it was named American Rifleman Handgun of the Year and women's innovative product of the year. This new platform of pistols launched nearly 18 months ago is still winning with consumers and providing us with opportunities to further expand the Shield family of products in the future. We launched the Performance Center version of the M&P 380 Shield EZ at the NRA annual meeting later in our fiscal year. So its financial impact will be visible in fiscal 2020.
Our entire Shield family has become a consumer favorite and I am pleased to report that by the end of fiscal 2019 we had shipped over 3 million Shield pistols. We are now approaching the $1 billion milestone for cumulative sales of the Shield family of handguns. During the year, we produced several new bundled promotions which combine our firearm with items from our outdoor products and accessories business to provide consumers a great value with brand names they know and trust.
The most impactful of these included our M&P Shield 380 EZ with a Crimson Trace laser sight combined with a handgun safe and M&P knife and an M&P flashlight. This bundle generated revenue for both of our business segments while providing consumers a great value and an immediate safe storage solution for their new firearm. We believe the combined impact of these achievements in our firearms business throughout the year helped us win market share.
While consumer demand for firearms remained weak in fiscal 2019 as indicated by a year-over-year decline in adjusted NICS background checks 8.8%, our units shipped into the sporting goods channel increased 4.2%. In outdoor products and accessories, which we refer to as OP&A, we created an entrepreneurial based brand lane (ph) structure. The lanes bring dedicated focus to each brand, establishing its positioning, its identity and where it has permission to play within specific product categories.
With this foundation in place we have found that our 20 OP&A brands fit within just four distinct lanes. They are marksmen, (inaudible), defender and adventurer. Each lane consists of a highly agile team that provides dedicated brand management, creative design, content production, product management, new product development and engineering. This team approach supports organic growth by allowing each brand to respond quickly to changing consumer trends.
The modular nature of the lanes also allows the division to leverage an organic growth opportunity by rapidly integrating newly acquired brands without adding significant headcount. Two examples from fiscal 2019 demonstrate this brand lane strategy and action. First, our brand lane team launched over 300 new products in OP&A in their first year of introduction. These new products represented 6.2% of the segment's full year revenue. However, it's important to note that vast majority of these products were launched at SHOT Show in January, very late in our fiscal year. So, that 6.2% number is not at all reflective of that annualized revenue potential.
These new products included the Caldwell Hydrosled the Frankford Arsenal M-Press, the BOG DeathGrip Hunting Tripod. We also introduced a new line of sights and scopes under the Crimson Trace brand which significantly broadened our product offering and greatly expanded our addressable market for this brand. Second, we launched an exciting major rebranding initiative. When we acquired Bubba Blade in fiscal 2018, the brand name had recognition among fishing enthusiasts, but was narrowly focused on a single product category, knives.
Our vision, our acquisition was always much bigger and we believe the brand could flourish in the much broader fishing tool category. So, we rebranded Bubba Blade simply to Bubba and then transferred its valuable product DNA such as its signature non-slip red grip and (inaudible) variety of new products across fishing gear and accessories. We effectively took Bubba Blade from a single product brand to a broad and exciting new lifestyle brand that captures one of today's most popular trends. Much like farm to table, Bubba addresses the water to table lifestyle that appeals to so many consumers. This is a great example of our ability to leverage our brands to greatly expand our addressable market.
It's also an exciting story that is just beginning and we believe we possess other brands that have the same type of potential. Lastly, it is important to note that our Crimson Trace brand is now part of this focused and creative brand Lane structure, fitting perfectly into the defender lane. As a result, we will now be able to shut out and move the Oregon front office of Crimson Trace to Missouri by the end of this calendar year.
Our second strategic theme is to simplify our go-to-market process. Our objective here is to streamline our approach to the market by simplifying and consolidating our logistics operations to a single location as our new logistics and customer service facility, making it easier for our customers to do business with us. This new facility in Missouri lies at the core of achieving this objective, providing the infrastructure and capacity for our future growth. It will centralize the logistics, warehousing and distribution operations for our entire business, enabling growth, enhancing efficiencies and allowing us to better serve customers across the organization.
And because the property will house multiple functions beyond just logistics and customer service, we will now refer to this as our Missouri campus. We have made significant progress on this objective and today I am pleased to report that all customer orders for our firearms business on now managed entirely by our logistics and customer service team at the Missouri campus. This includes the order management process in all areas of fulfillment such as picking, packing and shipping.
Today, the simplification of our go-to-market process has allowed us to eliminate poor (ph) physical locations as those operations move to the new campus. Over the last two years these closures include a facility in Tennessee, 160,000 square feet; a third-party warehouse in Kentucky, 20,000 square feet; a third-party inventory location in Missouri, 100,000 square feet; and a temporary office location, also in Missouri, 7,500 square feet.
We are on track to shut down two additional physical locations that include our 100,000 square foot US (inaudible) warehouse and office in Florida by the end of this month and our 145,000 square foot original BTI office and warehouse in Missouri by this coming fall. We also have third-party warehouse and shipping locations in New York and Springfield which are currently being consolidated and which together represent 35,000 square feet of space. When we are finished, we will have eliminated a total of 570,000 square feet of space across these locations and moved all of that functionality into our new 633,000 square foot Missouri campus, which will be utilized at only 70% at that point. That campus will then be home to be our OP&A a division and all its support personnel as well as the logistics and customer services division and their support teams. Jeff will walk through the financial impact of those actions later in the call.
Our third strategic theme is to create a level dribble infrastructure. We have made significant investments in and progress toward developing each component of this important strategic initiative. The logistics and customer service division represents one such investment and is a cornerstone of this critical infrastructure. In addition, we recently formed our global e-commerce and technology division. This new division will be at the forefront of our digital innovation, providing best-in-class sales and marketing technologies that will allow us to further amplify our marketing efforts toward maximizing the consumer experience. We also established an office and team in China, an action designed to strengthen our relationships with our ever growing supplier base while enhancing our flexibility and response time to new consumer trends. Our China team is comprised of engineers and designers that play a key role in our new product development process.
Our investment in our infrastructure is significant and will continue throughout 2020. So it is important to underscore that these actions are a critical part of creating an adaptable and scalable framework that truly differentiates us from our competition and adds value for our customers. Most importantly, these investments will enable our future organic and inorganic growth, ultimately creating value for our shareholders.
Our fourth strategic theme is to pursue complementary acquisitions. Our disciplined approach to acquisitions has yielded our current diverse portfolio of brands. When we first began we focused solely on our core firearm consumer whose passion for the shooting sports we deeply understood. We studied that consumers' passion, identifying parallel opportunities based on other outdoor activities and making acquisitions to enter those markets.
This process yielded not only successful acquisitions, but it also provided a natural expansion of our consumer base beyond the core firearm owner. For example, we now have a fishing consumer and a camping consumer. And for each of those consumers, we have a set of passions that can be further explored for opportunities to expand our addressable market yet again. We now seek to expand those markets not just organically, but also inorganically via tuck-in opportunities. We define tuck-ins as low risk, high return, relatively straightforward asset purchases of strong brands and their intellectual property that can be rapidly integrated by leveraging our existing framework.
Our acquisition of LaserLyte in fiscal 2019 is a great example of rapid integration. LaserLyte's firearm training systems, laser sights on both sides complement our existing offering, enabling us to further reach into the electro-optics market. Importantly, this is a business that we acquired and fully integrated within just eight weeks, a clear demonstration of our ability to rapidly execute and integrate a tuck-in acquisition.
Our fifth and final strategic theme is to fine-tune our capital structure. We continually focus on optimizing our balance sheet to achieve our top priority which is to invest in our own Company and maintain the financial flexibility to address future organic and inorganic opportunities. We believe this approach will provide our shareholders with the best possible long term return. As Jack will outline for you later on the call, we maintained a strong balance sheet throughout fiscal 2019 even as we continued to make significant investments in our Company that will help us deliver on our long term strategy.
Now let me touch briefly on a few highlights from the fourth quarter. As you know, we transfer firearms only to law enforcement agencies and federally licensed distributors and retailers, not directly to end consumers. That said, adjusted NICS background checks are generally considered to be the best available proxy for consumer demand for firearms. In our fiscal Q4, background checks for handguns declined 7% year-over-year, while our unit shipped to distributors and retailers increased by 16.6%. For the same period, background checks for long guns declined by 16.7% year-over-year while our unit shipped to distributors and retailers increased 9%.
In a more recent update, May adjusted NICS were up only slightly year-over-year and while NICS appears to be following typical seasonality, this was the second lowest May for adjusted NICS in the past five years, indicating that the consumer market for firearms remains soft.
Distributor inventory for our firearms decreased sequentially from 141,000 units at the end of Q3 to 127,000 units at the end of Q4. We have heard from distributors and retailers that they remain comfortable with their overall inventory levels. That said, we also believe we are a mix of biased market. Distributors and retailers are accustomed to carrying lower levels of inventory than in the past as they await promotional deals. Since the end of Q4, distributor inventories have increased on our current weeks of sales at distribution or above our eight-week threshold.
Our vision for our Company is one that truly sets us apart from our peers. Our focus remains on the consumer and our investments reflect that focus. From innovation and new product development to the creation of leveragable infrastructure that allows us to rapidly integrate acquisitions and streamline our go-to-market process, all of our objectives are designed to expand our addressable markets and to take an increasing share of those markets by addressing the needs, wants and desires of our consumers.
With that, I'll ask Jeff to provide more detail on our financial results and our updated guidance. Jeff?
Jeffrey D. Buchanan--Executive VP, CFO, Chief Administrative Officer & Treasurer
Thanks, James. Revenue for the year was $638.3 million, an increase of 5.2% over the prior year. Revenue in our firearms segment was $481.3 million, an increase of 6.3% and revenue in our OP&A segment was $177.3 million, an increase of 3.3% and representing more than a quarter of our total revenue. Without considering Crimson Trace products revenue, which was down for the year, the OP&A segment was up 6.8%. Within those total revenue numbers, intercompany sales eliminations were approximately $20.3 million.
Revenue for the fourth quarter was $175.5 million, an increase of 2.2% over the prior year. Revenue in firearms was $140.7 million, an increase of 4.8% and revenue in OP&A was $42.2 million, a decrease of 3.4% from the prior year. Without considering Crimson Trace products revenue which was down for the quarter, the OP&A segment was up 3.3%. Within those total revenue numbers, intercompany sales eliminations were approximately $7.1 million. As James mentioned, we are proceeding with the restructuring of Crimson Trace into the OP&A division including moving the Crimson Trace front offices in Oregon to Missouri, an action we believe will significantly improve operating efficiencies over time.
For the year, the total Company gross margin was 35.4% compared to 32.3% in the prior year. The firearms gross margin was 31.9%, an increase over the prior year and the OP&A gross margin was 45.9%, the same as the prior year. The total Company gross margin increase was driven mainly by the firearms segment which had lower promotional product discounts and rebates, and lower manufacturing spending.
For the year, GAAP operating expenses were $188.2 million compared to $168.7 million in the prior year. Current year expenses included $10.4 million for a partial impairment of goodwill in Q3 related to Crimson Trace. On a non-GAAP basis, which excludes that impairmental and acquisition related amortization, operating expenses were $154.8 million as compared to $146.7 million in the prior year. In Q4, GAAP operating expenses were $48.1 million compared to $41 million in the prior year. On a non-GAAP basis, quarterly operating expenses were $42.2 million as compared to $35.4 million in the prior year. The year-over-year operating expense increase in both the yearly and the quarterly numbers mainly relates to higher variable compensation expenses and increased depreciation relating to our new Missouri campus.
On a GAAP basis, EPS for the year came in at $0.33 as compared with $0.37 in the prior year, although it should be noted that with that the Q3 Crimson Trace impairment the current year GAAP EPS would have been $0.52. Our non-GAAP EPS, which excludes that fiscal '19 impairment, onetime tax reform benefits in fiscal '18 and all acquisition related and other cost in both years, was $0.83 in the current year as compared with $0.46 last year. For the fourth quarter, GAAP EPS came in at $0.18 as compared with $0.14 in the prior year. Our non-GAAP EPS was $0.26 as compared with $0.24 last year.
In fiscal '19, adjusted EBITDAS was $111.3 million for a 17.4% EBITDA margin compared to last year's $89.5 million which was a 14.7% margin. Adjusted EBITDA in Q4 was $31.9 million for an 18.1% EBITDA margin as compared with $33.4 million or a 19.4% margin in Q4 of last year.
So now, turning to the balance sheet. For the year, operating cash flow was $57.5 million and capital spending, including our investment in the equipment necessary for the new Missouri campus was $33.9 million, resulting in free cash flow of $24.3 million. In the quarter, operating cash flow was $36.7 million and CapEx was $8 million, resulting in free cash flow of $28.7 million. Our free cash flow is typically stronger in the second half of our fiscal year and has also improved over the last few quarters as we have neared completion of the Missouri campus.
We reduced our internal inventory levels for a third consecutive quarter. We are moving into the slower summer sales period. So we do expect inventory levels to rise until autumn as usual. In fiscal '19, our capital spending was approximately $33.9 million, an increase of about $15 million over the prior year. The increase was primarily related to the Missouri campus and included IT spending and equipment, but excluded the capitalized lease construction cost of $46.2 million. In fiscal 2020, we expect to spend about $30 million in CapEx which will include a continued cost relating to the consolidation of our facilities into the Missouri campus.
As of the end of Q4, our balance sheet remained strong with approximately $41 million of cash and $115.4 million of total net borrowings. I would note that we paid down $25 million on our line of credit in Q4, resulting in a zero balance on that line of credit at the end of the year. This means that we have reduced our net borrowings by nearly $100 million in a little under two years while still investing heavily in our business, including small acquisitions and the construction and furnishing of the Missouri campus.
Thus as of today, we have outstanding balances on our borrowings as follows; $75 million on our senior notes due in 2020 and $81 million on our bank term loan A also due in 2020. We currently pay a blended interest rate of approximately 4.73% on this debt.
So now turning to our guidance. For the full fiscal year 2020, we expect our firearms business to reflect continued softness and a buyers' market in the consumer market for firearms while we expect our OP&A business to deliver solid growth. As a result, we anticipate our overall financial performance to be roughly flat to last year with a revenue range of $630 million to $650 million. At that level we would expect full year GAAP EPS of between $0.50 and $0.58 and non-GAAP EPS of between $0.76 and $0.84.
We believe revenue will be back-end loaded due mainly to new firearm products planned second half of the year. Taking into account the loading during the year as well as our typical summer slowdown in sales, we estimate revenue in Q1 to be between $120 million and $130 million. At those levels we would expect GAAP EPS to be at about break even and non-GAAP EPS of between $0.03 and $0.07.
As James has noted, we are continuing our consolidation efforts into Missouri, including the moves of USG, BTI and Crimson Trace. These actions will result in approximately $0.07 per share duplicate expenses in fiscal '20 that will not reoccur in fiscal '21, most of which are in OpEx. I would note that because the logistics, the warehouse operations for firearms are now being handled in Missouri, most of our freight and warehouse costs relating to firearms will now be in OpEx instead of cost of goods sold. We estimate that amount to be approximately $8 million to $9 million.
Finally, I would also point out that our fiscal 2020 forecast does not include any additional future tariffs on products that we manufacture in China for our OP&A business. Although we believe we could eventually mitigate a portion of any new tariff increase, a full 25% tariff on all such goods applied throughout the quarter could initially result in a full quarterly impact of as much as $3 million. In both our first quarter and full fiscal year numbers, our non-GAAP EPS excludes amortization and costs related to any acquisitions. All of these estimates are based on our current fully diluted share count of 55.5 million shares and a tax rate for the year approximately 27%. James?
James Debney--President, CEO & Director
Thank you, Jeff. With that, operator, please open up the call for questions from our analysts.
Operator
(Operator Instructions) Our first question comes from the line of James Hardiman with Wedbush. Your line is now open.
James Hardiman--Wedbush -- Analyst
Good afternoon. So, really good fourth quarter, certainly versus your guidance you beat it by $0.13 basically doubling that up. I don't think you really spoke to what was so much better than you initially anticipated three months ago.
Jeffrey D. Buchanan--Executive VP, CFO, Chief Administrative Officer & Treasurer
Hi. Basically what helped was like the top line, like the top line drove extra about $0.05 in sales and then that extra top line helped with absorption by another $0.03. We did release some reserves at the end of the year because you threw things up that was another $0.04, that accounted for most of it. The -- we had a lot of promotional activity in Q4 that I think helped with the sales and the revenue, the top line. A lot of that came in at the very end as people were trying to get on -- get it in under the wire as the promotions were ending at the end of our fiscal year.
James Hardiman--Wedbush -- Analyst
That's helpful. And then commentary on the firearms business continued softness moving forward. Maybe compare that outlook to how you've anticipated it looking three months ago. If I recall correctly, you would sort of look to June as a month that maybe things could bottom out and turn around. Your commentary on May didn't sound very constructive although it was the first increase we've seen in a while and was better than I think a lot of people were looking for. So maybe walk us through the machinations there, was May better or worse than you thought it would be. And I guess has your outlook for the next 12 months gotten better or worse versus how you're thinking about a few months back.
James Debney--President, CEO & Director
Hi James. I don't think our outlook's particularly changed. I mean at the moment it's fairly flattish and we stick by that. Yes, May was up but as you stack it up against prior years, it still ranks pretty low. That's what leads us to the conclusion that we believe the market is soft and we are in that summer period as well which all know is the seasonal slow period. And it's always difficult to predict how things will go once we enter the cooler months, you know, go into the fall and hunting kicks in and so on, back into the holiday, gift giving season which is always where we see the most sales at retail. So I think we just maintain that flattish outlook. Yes, you could take some encouragement away from the May result. Yes, it was certainly a positive year-on-year but I don't think we know enough yet. We just don't have enough data points.
James Hardiman--Wedbush -- Analyst
Perfectly fair. And then last question from me. Maybe just speak to inventory, it was down versus 3Q but up versus last year. Sounds like distributors are pretty comfortable. What's the right amount of inventory. You talked about it being a buyers' market and them taking less inventory. I'm just trying to put that inventory number in the proper context.
James Debney--President, CEO & Director
I think, you know, what's the right inventory. I think that's the million dollar question. I don't think anybody knows. And as distributors have obviously experienced competitors, you know, file for bankruptcy as we know, one just happened recently, so I would say that they're cautious. I think that's a good thing. They also know that the inventory that they need is readily available from manufacturers. So I think they're doing the small thing by keeping their inventory as lean as possible but obviously not too lean so that they jeopardize their service levels to independent retailers. I mean you would expect business picks up, that inventory levels probably going have to increase to support those service levels. That's the way it works. As we move through the summer period, there's no doubt that our inventory levels will start to creep back up again because they need to get ready for the busy period that's coming and they need to take advantage also of just a regular normal cadence of promotions, for example, we engage in. As you know, we'll have a late summer promotion, we'll do a spring promotions and so on and they need to get ready for those. It is a buyer's market, that's our belief right now because the inventory is readily available and we still have a soft market when it comes to the consumer.
Hey, James, I just want to add, on our inventory, the firearms finished goods inventory is actually down both over Q3 and Q4 of last year. The outdoor products, OP&A inventory is significantly up over last year. And that's mainly because we did buy forward because of the tariffs that were going to be imposed and probably buying like some now with respect to the possibility of additional tariffs. And as we said we're moving a lot of inventory around now with the closing of UST and the upcoming move of BTI. So, we do have excess inventory with regard to those moves. So, most of the differences right now are really related outdoor products. The finished goods inventory at the firearms level is basically been -- it's been sort of on a downward descent for the last eight quarters, up and down a little bit, but mostly down.
Jeffrey D. Buchanan--Executive VP, CFO, Chief Administrative Officer & Treasurer
And just to add another point, (inaudible) have excess inventory, that's an inventory of very good product. This is not a product --
James Debney--President, CEO & Director
(multiple speakers)
Jeffrey D. Buchanan--Executive VP, CFO, Chief Administrative Officer & Treasurer
It's product that doesn't have a shelf life, it's fast moving product as well. So, we don't have any concerns there.
James Hardiman--Wedbush -- Analyst
But just to clarify, the 127 number in terms of distributor inventory at the end of the quarter, I think it was 98 in the fourth quarter of last year. Was that number unnaturally low coming out of 4Q last year or what's driving that increase?
Jeffrey D. Buchanan--Executive VP, CFO, Chief Administrative Officer & Treasurer
I would say that's a pretty low number when you think about it. If you take off, you know, our average sell price and multiply by the number of units, you can see how much revenue that would represent for us. And you know that's call it roughly 10% for the firearms business. That's pretty low when you still think about 60% of our revenue is generated by two step (ph) -- the firearms business.
James Debney--President, CEO & Director
Yes, historically, that was I think like one of the lowest quarters we've had in many quarters.
James Hardiman--Wedbush -- Analyst
Okay, that's all from me. Thanks guys.
James Debney--President, CEO & Director
Thanks, James.
Operator
Our next question comes from line of Steve Dyer with Craig Hallum. Your line is now open.
Ryan Sigdahl--Craig Hallum -- Analyst
Hey guys. Ryan Sigdahl on for Steve. Congratulations on a solid quarter given the challenging environment.
James Debney--President, CEO & Director
Thank you.
Ryan Sigdahl--Craig Hallum -- Analyst
First question is really in the firearms, but with backlog down pretty meaningfully and a more cautious buyer the way it sounds, what gives you confidence in those new products driving growth in the back half of the year?
James Debney--President, CEO & Director
I think it's really our prior experience to be honest. We have a very strong new product pipeline. We have a lot of experience. The revenue that's generated by new product introductions and you know there are obviously different tiers, you know, the lowest being a simple line extension to all the way to the one that's going to generate the most revenue which is a new platform and I think that's the success we saw with the new EZ platform, the M&P 380 EZ being the first caliber that we introduced. So there are several meaningful new product introductions across the whole of AOB that are staged for the balance of the year and we're particularly excited about those. Those will I have no doubt generate a good amount of revenue and that's what gives us confidence.
Ryan Sigdahl--Craig Hallum -- Analyst
And just to clarify, you have both new product line extensions as well as new platforms coming?
James Debney--President, CEO & Director
What I would say is that January (ph) we have the full spectrum going on and that's just typical. As you heard in the prepared remarks, we launched 100 plus new products in firearms, 32 of those were meaningful. I'm not saying that's the mix you'll see this year, but I'm just indicating to you that you will see the full spectrum from what could be a new platform to a simple line extension. That's typically what we do.
Ryan Sigdahl--Craig Hallum -- Analyst
Got it. And James, you briefly mentioned that a large distributor recently filed Chapter 11. What impact has that had on your business and then how would you assess the financial health of your other customers?
James Debney--President, CEO & Director
The one that most recently filed for bankruptcy had lost relevance over the last 12 to 18 months. So as an impact on our business going forward right now, minimal. So no real concerns there. As for the balance of our customers when it comes to our two step distribution partners, I just see strong partners. So I have no concerns.
Ryan Sigdahl--Craig Hallum -- Analyst
Great. Last one for me and then I'll turn it over. Handgun average selling price was down last several quarters here and it's the lowest in quite a while this quarter. What's the primary driver of that? Is it bundling, mix, incentives etc. And then should we expect that to continue? Thanks. Good luck.
James Debney--President, CEO & Director
Right. It's mainly due to a promotional activity. The -- from January to April the types of promotions that are typically done in the industry are buy X, get Y free, like buy eight, get nine free -- or get one free. The more successful the promotional activity is or the lower that ratio is, then the lower the ASP is. So I think the change in ASP primarily relates to that. It also relates partially to success in, for example the 380 EZ which is a less expensive product versus a revolver, Performance Center revolver which goes for $800 or $900. So my product mix -- a successful product mix is probably impacting that also.
Operator
Our next question comes from the line of Cai Von Rumohr with Cowen and Company. Your line is now open.
Cai Von Rumohr--Cowen and Company -- Analyst
Thank you very much. And good for other guys.
James Debney--President, CEO & Director
Hi, Cai.
Cai Von Rumohr--Cowen and Company -- Analyst
Jeff could you -- I think I meant how much is the duplicative expense likely to be this year in OpEx and sort of how does that pattern across the year.
Jeffrey D. Buchanan--Executive VP, CFO, Chief Administrative Officer & Treasurer
Yes. Well, it around $0.08. Like $0.07 to $0.08. And it's relatively equal throughout the year. So I pro rata each quarter -- a couple of cents a quarter roughly.
Cai Von Rumohr--Cowen and Company -- Analyst
Is the benefit zero, is it zero in the next year. I would have thought it would have been [Multiple Speakers] early on.
Jeffrey D. Buchanan--Executive VP, CFO, Chief Administrative Officer & Treasurer
Right, so there's a lot -- Cai, there's a lot going on. So let me -- I tried to explain this. So -- like for example there's increased depreciation and cost associated with the new Missouri campus. Yet offsetting that is the reduced costs on things like closing UST and now the front office of Crimson Trace, moving the other Columbia location etc.
So what I try to do is by saying that the costs that are duplicate with next year, I'm trying to identify the costs that are in essence going away. And that's this, like $0.07 that I mentioned in the script, which is approximately $0.02 a quarter. And that is relatively pro rata because we can't do this all at once. We're staging the center. We just announced Crimson Trace. And all of those cost savings in Crimson Trace are really going to occur in 2021, and account for a large portion of that $0.07 that I'm talking about.
So right now we're going to be running -- we're still running a lot of, like I say, duplicate things that are going away. And I mean maybe it's $0.03 in quarter 1 and maybe it's down to $0.01 by quarter 4. But in general there's not a big upswing. It's just a very slight downward glide path. But all those are definitely gone by next year 2021.
Cai Von Rumohr--Cowen and Company -- Analyst
Got it. And then so you mentioned $8 million to $9 million of saved expense moves from COGS to OpEx. How should I think about how much of that is -- I would assume most of that's related to firearms but maybe not. Roughly how should I think about the allocation of that to firearms and OGM (ph)?
Jeffrey D. Buchanan--Executive VP, CFO, Chief Administrative Officer & Treasurer
Yes. It's about 75% of firearms.
Cai Von Rumohr--Cowen and Company -- Analyst
Got it. Okay. And then so $3 million per quarter of the tariff goes to 25%. But I assume that assumes no actions on your part in terms of raising prices to offset that.
Jeffrey D. Buchanan--Executive VP, CFO, Chief Administrative Officer & Treasurer
Yes exactly. So let me explain the $3 million. That's -- I think that's the worst possible amount in a quarter. So it's like assuming that the full quarter is impacted and that we don't have previously bought inventory. We haven't taken any mitigating steps. It's just the worst case. Obviously if the full 25% in tariff is imposed on all Chinese goods, we will take mitigating actions. And those actions are you work with suppliers to get additional price concessions. You raise prices. You find other areas to offshore. And we think we can do all those things. I'm not sure whether we can mitigate the full impact of additional tariffs but we're thinking about it right now and as to whether those are going to be imposed. It seems the story changes every day.
Cai Von Rumohr--Cowen and Company -- Analyst
So just roughly, what percent of the OP&A sales are produced in China.
Jeffrey D. Buchanan--Executive VP, CFO, Chief Administrative Officer & Treasurer
A very large percentage. I would say mid-80s. Yeah, I mean we do a lot of assembly on Crimson Trace for example in Portland, although they buy product in Asia. But it's not -- the cost is lower. It's assembly costs there. So yeah, I think James is right, like 70s, 80s something like that. And we buy -- I know we buy like knife products in Taiwan. So that's probably a good answer.
Cai Von Rumohr--Cowen and Company -- Analyst
So DSOs were a little bit higher. How come they were where they were?
Jeffrey D. Buchanan--Executive VP, CFO, Chief Administrative Officer & Treasurer
You know like I said a lot of sales at the end of a quarter as people were trying to get the deals that were ending at the end of April.
Cai Von Rumohr--Cowen and Company -- Analyst
Got it. Okay, OK. That's it for CapEx (ph). And then last -- free cash flow, what's that look like for the year. I mean you're entering with a little extra inventory for buffer for China. What's the free cash flow look like now with the CapExes then?
Jeffrey D. Buchanan--Executive VP, CFO, Chief Administrative Officer & Treasurer
I would say the free cash flow next year looks better than this year. We typically don't give a forecast for free cash flow. But it definitely -- definitely looks better, just for the exact reason that you mentioned. You got -- right now you have high DSOs and some inventory buildup. Yeah. High inventory for the tariffs. So -- and less outgoing cash. So --
Cai Von Rumohr--Cowen and Company -- Analyst
Yeah. And last one, M&A, you're still looking for tuck ins. What's the pipeline look like, and in terms of we are looking at big things, small things, give us some color on that if you can.
Jeffrey D. Buchanan--Executive VP, CFO, Chief Administrative Officer & Treasurer
The company's focus is on smaller transactions. It's tough out there because the price is high, the interest rates are low. And so the result\s that the PE firms can pay a lot because they're willing to leverage a lot more than we are.
So where we've had success the last two like BUBBA and LaserLyte were ones that we were not in a process that we found on our own. Right now we're finding -- I mean there's -- things are coming up and we look at them. We're finding that in the process, it's hard at this point to be competitive because we're just more conservative. Our weighted average cost of capital has dropped. It's around 8% now. So our bogey for an acquisition has dropped maybe like 10% or higher.
But it's hard to find it. But we're still -- we are working on things that we find on our own. And it is the focus of the company on acquisitions. It's the biggest bang for the buck. You buy it on EBITDA, you don't hire any people, you don't take any buildings. You basically take some inventory and the supply chain and the IP and you -- and we've already -- as we James mentioned, we bought laser light. We did the whole thing in just a week eight weeks.
So we have the infrastructure now. As James mentioned we're closing all these extra facilities. We have everything now in the Missouri campus. But despite the fact that the square footage is about equal trade, the cost is about an equal trade. The Missouri campus is only 60% to 70% utilized. So for basically even dollars and even square footage we have the excess capacity. So we definitely would like to find these, what we call tuck-ins. Typically they would be smaller.
Cai Von Rumohr--Cowen and Company -- Analyst
Got it. Thank you very much.
Jeffrey D. Buchanan--Executive VP, CFO, Chief Administrative Officer & Treasurer
Thank you.
James Debney--President, CEO & Director
Thanks Cai.
Operator
Our next question comes from the line of Scott Stember with CL King. Your line is now open.
Scott Stember--CL King -- Analyst
Good evening. Thanks for taking my questions.
James Debney--President, CEO & Director
Hi, Scott.
Scott Stember--CL King -- Analyst
You alluded to the fact that in the fourth quarter there were -- I guess some consumers that were rushing to get in. I guess working to try to get their product with certain promotions. And I'm just trying to tie that into the first quarter where I guess, even on the high end you are looking at for about a 10% decline in sales year-over-year. Maybe just talk about the cadence of how some of those promotions are falling off or are you just stopping some of these bundling programs. Just give us an idea of how much of an impact it's having on your expectations for the first quarter?
James Debney--President, CEO & Director
Yes, I'd just like to clarify that promotional activity in Q4 is just the typical spring show specials we refer to them as, where you may buy six of something and receive one, it's pretty good. And that was coming to an end to April. That targets retailers, not consumers. So with those retailers who were waiting as long as possible, looking at the -- I suspect looking at their inventory and trying to optimize their inventory and then trying to capitalize on that promotion before it ended at the end of April, obviously which was the end of our fiscal year.
So, when you look at our units shipped, we believe that we significantly over performed. We definitely over performed the market. You can see that in the numbers for sure. When you compare to adjusted mix. And so as we come into Q1, there's obviously got to be some correction. And we think that's what we're going to see in Q1. And that's built into our guidance.
So as you just, quite rightly said, and compare versus last year, we are down. But to go back to what we said, it's a buyer's market. They're capitalizing on the opportunity without doubt. I don't blame them. The product's readily available. They can afford to take some inventory at a lower average cost and bleed it down and until they believe that the next promotion will come along.
We are not doing anything special. It's our normal cadence of promotional activity when it comes to working with our major retailers and our two step partners who serve all the independents, that we don't serve directional. This is very important three buy groups that we do work with. So it's our normal cadence that we are doing the bundling promotions and we will continue. We do believe that we'll continue to do those this fiscal year as well. They've been very effective. So we've worked up a number of different bundled promotions that we will activate throughout the year.
Scott Stember--CL King -- Analyst
Got it. And maybe James just taking a step back, just looking at the market, I know that the last year and a half. I guess a lot of the declines could be pinned on some of the pullback in the politically motivated buying that was taking place. But clearly there are some underlying trends of organic growth although we can't see them right now in the mix numbers. But when you think assuming that there's no change in political stance in the country here and we don't get any political base buying or when do you think we could start to see what it would take for some of the underlying traits whether it's more people wanting personal security, whether it's women or just shooting sports, when do we see some signs that the industry can start to at least show some of the modest growth that we would expect to see.
James Debney--President, CEO & Director
I think the trend -- some of the trends that you referred to obviously still lie in -- peoples' primary reason to buy a handgun for example is still personal protection. Women are still very interested in owning firearms. So those trends are there. And as you quite rightly said there's an absence of fear based buying and that to be absolutely clear to everybody, that's fear based buying based on fear of regulation, OK. So we don't see any of that right now.
The question you ask is a question that we try and answer internally all the time, as we try and figure out our forecast going forward, that obviously informs guidance that we give, and it's a difficult one for sure. Certainly the market appears to have somewhat reached its low point. Is it going to stop growing from here, I just don't know. And that's why we hold on to what we call a flattish outlook.
But what will drive excitement, what will drive revenue, all those new product introductions, that's absolutely key. And we have some -- significant one for the balance of the year. Our promotions will always be strong. Our bundled promotions will be strong. That was -- those worked very well last year, as you can see in our results. So the market, I don't know. We have what we have in control.
Certainly as you look outside of firearms for us we have our Outdoor Products and Accessory segment. We have a lot of excitement going on that, tremendous number of new products were launched last year, that we didn't get the full benefit in the year. We'll certainly see that benefit this year. Multiple rebranding initiatives. We have a very strong family of brands as we've discussed before. So we see plenty of growth opportunities there.
There's some navigation to do. Some of the retailers aren't as strong as we'd like but -- and it's a bit choppy out there. But I think that starting to settle down. We certainly formed extremely strong and high level strategic relationships with several key large retailers which we're excited about, and we'll leverage that going forward as well. So there's a lot of good things. We are working hard to mitigate the softness in the market. And I hope you recognize that in the results. That's all we can do. And we'll continue to do that. And if the market picks up, well that'll be a tailwind for us.
Scott Stember--CL King -- Analyst
Got it. And just last question, Jeff you talked about the $0.07 or $0.08 of duplicative costs for everything that's going on throughout the year, evenly distributed. But once we get past that into 2021, I'm just trying to look back my notes and to see if you guys have come out and said, this is what the benefits will be starting in 2021 on the annualized basis from consolidating -- from -- from a cost savings standpoint or a synergy standpoint.
Jeffrey D. Buchanan--Executive VP, CFO, Chief Administrative Officer & Treasurer
Yes, that's what that $0.07 to $0.08 is, that's just cost savings. Now obviously a lot of what we're doing, especially with respect to the distribution sales or the logistics and sales division is to try to enhance sales. Also James talked about the new initiative in e-commerce. So a lot of those expenses, in addition to going away, we hope there will be more top line benefit in 2021 to everything we're doing.
Scott Stember--CL King -- Analyst
Got it. That's all I have. Thanks again guys.
James Debney--President, CEO & Director
Thank you.
Operator
Our next question comes from line of Mark Smith with Lake Street. Your line is now open.
Mark Smith--Lake Street Capital Markets -- Analyst
Hi guys. Just real quick, I just want to look at the promotional activity a little bit more here in the quarter. Was this really led by you guys or more so by your peers and was there anything that really surprised you in the promotional activities? Do you feel like it was at healthy levels throughout the quarter?
James Debney--President, CEO & Director
I guess there aren't real surprises when we get back to it. It got somewhat back end loaded in the quarter. As I said people were waiting, retailers waiting for the last minute, looking at their inventory and then capitalizing on the last couple of weeks of that promotional period before it ended. Other than that no real surprises. I mean that's just a typical promotion, or as I mentioned it's the promotion for the show season, when distributors invite independent retailers into shows that they hold or they just do key (ph) shows and they're using those packages.
So not bundled packages and that's the typical buy five, get one free, buy six get one free and so on with our two set up distribution partners or offering those to those independent retailers. So nothing unusual in that respect.
Mark Smith--Lake Street Capital Markets -- Analyst
Okay and pretty similar impact in handguns and long guns.
James Debney--President, CEO & Director
We are a hand gun company, I mean that's where we're strongest. And so if you just look at the firearms segment that's what by far most of our revenue comes from.
Mark Smith--Lake Street Capital Markets -- Analyst
That's fair. Thank you.
James Debney--President, CEO & Director
Thank you.
Operator
Our next question comes from line of Ronald Bookbinder with IFS securities. Your line is now open.
Ronald Bookbinder--IFS securities -- Analyst
Good evening and yes, congratulations on a nice finish to the year.
James Debney--President, CEO & Director
Thanks Ron.
Ronald Bookbinder--IFS securities -- Analyst
You guys have done an excellent job of taking market share in a competitive market through product innovation and bundling. Is there an opportunity given as you just expressed the strong relationships that you have with key retailers. Is there an opportunity for you guys to start producing private label firearms for retailers and going after sort of a lower value end of the market.
James Debney--President, CEO & Director
I have private label in my background, when I look back into the roots of my career and I do my best to avoid it. I mean all it does it starts to commoditize your product, compress your margins, you have less pricing power. There's lots of negatives to private label.
The most valuable thing that we have are our 20 brands and that's what sets us apart. We own those brands. There's nothing else out there really like them. We have the full spectrum as well from an iconic brand, right the way down to brands that we are just nurturing and getting going now. And we can see in our future that we'll just start new brands from scratch and we'll get behind those and raise their awareness with the consumer by matching them with quality products.
So I definitely don't see private label in our future. They're often very, very small parts of our business are private label. But again like I mentioned what I think about private label.
Ronald Bookbinder--IFS securities -- Analyst
Yes, yeah. It tends to be low margin, low revenue and but it would increase shift your throughput through your facilities. On the on the $0.07 to $0.08 that Jeff was just talking about that, that would be the cost savings going forward, in fiscal '21 and beyond. Is that $0.07 and $0.08 -- $0.07 to $0.08 already being backed out in the adjusted numbers?
Jeffrey D. Buchanan--Executive VP, CFO, Chief Administrative Officer & Treasurer
No -- no because the only adjustments were taken in the adjusted numbers are really amortization. We're not taking any -- at this point we're not taking any one time numbers associated with all these various moves. I mean there might be a few dollars here and there, if it's a true one time. But really what's going on right now is we're operating several things at once, that are going to become just one thing. So it's kind of hard to identify what is like quote one time. So, instead of doing that I thought it would be best to just say that we have $0.07 to $0.08 of costs in this year that will not be around next year.
Ronald Bookbinder--IFS securities -- Analyst
Okay, great. Thank you very much and good luck in the New Year.
James Debney--President, CEO & Director
Thanks Ron.
Jeffrey D. Buchanan--Executive VP, CFO, Chief Administrative Officer & Treasurer
Thanks.
Operator
And we have time for one more question. This question comes from the line of Max Natal (ph) with Dewey Media (ph). Your line is now open.
Unidentified Participant
Hey, guys congrats on the positive quarter. Just have a small bundle of questions, pun intended.
James Debney--President, CEO & Director
Thanks Max.
Unidentified Participant
So based on the success of the bundled promos that you guys had, can we expect to see the supplies across more product SKUs both fire arms and accessories, I mean like cleaning kits, optics, upgraded cases, or even something like bundling your firearms with the Gemtech suppressors , especially since it's such a low hanging fruit.
James Debney--President, CEO & Director
Yes, I think all of those are certainly on the table and make perfect sense. You will definitely see more of that. Some of them may even become standard SKUs. We just continue to see the value that we can create for the consumer. And if we see that demand can be sustained then I do believe that we'd make some of those just standards SKUs. And you can certainly see that with our M&P 15 SPORT II rifle as well where we could -- and the M&P 15-22 as well where we just continue to bundle those with Crimson Trace Optic, make that a standard SKU.
Unidentified Participant
Awesome. So one of the question you kind of already answered which was have you seen any evidence of any fear based buying. But as we're approaching the next upcoming election cycle and obviously the upcoming rhetoric, speaking with the distribution channel or the retail channel, have you seen any signs of willingness for them to leverage up again much like they did in 2016 or are they still hanging in with the lessons in the back of their mind from that?
James Debney--President, CEO & Director
Yes, I think lessons learned definitely are resonating strongly in people's minds right now. There has certainly been nobody who's talking about building inventory and making a bet that they will see, some fair based buying manifest itself at some point. And again it's fear based buying, just unfair regulation. So nothing yet, but who knows.
Yes. And Max I'd like -- if you go back to '16 the build in anticipation of the Clinton-Trump, the election really occurred in '16, that is in the year of the election, probably four or five months before the election. We're still a year before that build up period started in the equivalent time in the last election. So we've got a lot of ways to go. And we'll see.
Unidentified Participant
And I guess the final question. So in light of a few of your private competitors seemingly having success with ammunition, have you guys considered tucking in any small ammo manufacturer or perhaps having your own branded line of ammunition.
James Debney--President, CEO & Director
We've considered that and obviously we talk about the full spectrum of potential acquisitions and that's still one that we do talk about. But nothing really appeals to us right now. I would say.
Jeffrey D. Buchanan--Executive VP, CFO, Chief Administrative Officer & Treasurer
Yeah, Max I would add to that. Two problems with that, One is the gross margins tend to be lower than like firearms. And also you know if we're going to be in, with respect to the firearms business we'd like to be in a leading position in terms of market share. So a tuck in acquisition in ammo it might -- yeah, you could do I suppose you could have some specialty ammo or something but it's not I don't think it would be our focus right now.
Unidentified Participant
Awesome. Thank you very much guys.
James Debney--President, CEO & Director
Thank you.
Operator
And that concludes today's question and answer session. I'd like to turn the call back to Mr. Debney for closing remarks.
James Debney--President, CEO & Director
Thank you operator. I want to thank everyone across the American Outdoor brands team for their commitment and dedication to excellence. Thank you for joining us today and we look forward to speaking with you next quarter. Take care everyone.
Operator
Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program and you may now disconnect everyone have a great day.
Duration: 91 minutes
Liz Sharp--Vice President of Investor Relations
James Debney--President, CEO & Director
Jeffrey D. Buchanan--Executive VP, CFO, Chief Administrative Officer & Treasurer
James Hardiman--Wedbush -- Analyst
Ryan Sigdahl--Craig Hallum -- Analyst
Cai Von Rumohr--Cowen and Company -- Analyst
Scott Stember--CL King -- Analyst
Mark Smith--Lake Street Capital Markets -- Analyst
Ronald Bookbinder--IFS securities -- Analyst
Unidentified Participant
More AOBC analysis
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Should You Worry About Nyrstar NV's (EBR:NYR) CEO Pay?
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Hilmar Rode became the CEO of Nyrstar NV (EBR:NYR) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Nyrstar
At the time of writing our data says that Nyrstar NV has a market cap of €22m, and is paying total annual CEO compensation of €1.5m. (This number is for the twelve months until December 2018). We note that's an increase of 34% above last year. While we always look at total compensation first, we note that the salary component is less, at €893k. We looked at a group of companies with market capitalizations under €178m, and the median CEO total compensation was €341k.
Thus we can conclude that Hilmar Rode receives more in total compensation than the median of a group of companies in the same market, and of similar size to Nyrstar NV. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Nyrstar, below.
On average over the last three years, Nyrstar NV has grown earnings per share (EPS) by 24% each year (using a line of best fit). In the last year, its revenue is up 8.0%.
This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to checkthis free visual depiction ofwhat analysts expectfor the future.
With a three year total loss of 98%, Nyrstar NV would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by Nyrstar NV, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. This doesn't look great when you consider CEO remuneration is up on last year. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. If you think CEO compensation levels are interesting you will probably really likethis free visualization of insider trading at Nyrstar.
Important note:Nyrstar may not be the best stock to buy. You might find somethingbetterinthis list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
What Should Investors Know About Ordina N.V.'s (AMS:ORDI) Earnings Trajectory?
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In February 2019, Ordina N.V. (AMS:ORDI) released its latest earnings announcement, which showed that the company experienced a substantial tailwind, more than doubling its earnings from the prior year. Below, I've presented key growth figures on how market analysts view Ordina's earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
See our latest analysis for Ordina
Market analysts' consensus outlook for next year seems buoyant, with earnings rising by a significant 95%. This strong growth in earnings is expected to continue, bringing the bottom line up to €20m by 2022.
Although it’s useful to be aware of the growth rate each year relative to today’s level, it may be more insightful evaluating the rate at which the company is moving every year, on average. The advantage of this technique is that we can get a better picture of the direction of Ordina's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 24%. This means that, we can assume Ordina will grow its earnings by 24% every year for the next couple of years.
For Ordina, there are three pertinent factors you should further examine:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is ORDI worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether ORDI is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ORDI? Exploreour interactive list of stocks with large growth potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
What Are Analysts Saying About IMCD N.V.'s (AMS:IMCD) Growth?
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After IMCD N.V.'s (AMS:IMCD) earnings announcement in December 2018, analyst consensus outlook appear cautiously optimistic, with profits predicted to increase by 32% next year, though this is noticeably lower than the historical 5-year average earnings growth of 36%. With trailing-twelve-month net income at current levels of €100m, we should see this rise to €132m in 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for IMCD in the longer term. For those keen to understand more about other aspects of the company, you canresearch its fundamentals here.
Check out our latest analysis for IMCD
Over the next three years, it seems the consensus view of the 7 analysts covering IMCD is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of IMCD's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
From the current net income level of €100m and the final forecast of €161m by 2022, the annual rate of growth for IMCD’s earnings is 13%. EPS reaches €3.06 in the final year of forecast compared to the current €1.91 EPS today. With a current profit margin of 4.2%, this movement will result in a margin of 5.1% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For IMCD, I've compiled three relevant factors you should further research:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is IMCD worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether IMCD is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of IMCD? Exploreour interactive list of stocks with large growth potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Here's Why I Think Fraport (ETR:FRA) Might Deserve Your Attention Today
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For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it completely lacks a track record of revenue and profit. But as Peter Lynch said inOne Up On Wall Street, 'Long shots almost never pay off.'
So if you're like me, you might be more interested in profitable, growing companies, likeFraport(ETR:FRA). While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.
View our latest analysis for Fraport
As one of my mentors once told me, share price follows earnings per share (EPS). That makes EPS growth an attractive quality for any company. Impressively, Fraport has grown EPS by 19% per year, compound, in the last three years. As a general rule, we'd say that if a company can keep upthatsort of growth, shareholders will be smiling.
Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. While Fraport did well to grow revenue over the last year, EBIT margins were dampened at the same time. So it seems the future my hold further growth, especially if EBIT margins can stabilize.
The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.
Of course the knack is to find stocks that have their best days in the future, not in the past. You could base your opinion on past performance, of course, but you may also want tocheck this interactive graph of professional analyst EPS forecasts for Fraport.
I always like to check up on CEO compensation, because I think that reasonable pay levels, around or below the median, can be a sign that shareholder interests are well considered. I discovered that the median total compensation for the CEOs of companies like Fraport with market caps between €3.6b and €11b is about €3.1m.
Fraport offered total compensation worth €2.7m to its CEO in the year to December 2018. That seems pretty reasonable, especially given its below the median for similar sized companies. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, that does support enhanced alignment between the CEO and the ordinary shareholders. It can also be a sign of good governance, more generally.
For growth investors like me, Fraport's raw rate of earnings growth is a beacon in the night. With swiftly growing earnings, it probably has its best days ahead, and the modest CEO pay suggests the company is careful with cash. So I'd venture it may well deserve a spot on your watchlist, or even a little further research. Now, you could try to make up your mind on Fraport by focusing on just these factors,oryou couldalsoconsider how its price-to-earnings ratio compares to other companies in its industry.
Of course, you can do well (sometimes) buying stocks thatare notgrowing earnings anddo nothave insiders buying shares. But as a growth investor I always like to check out companies thatdohave those features. You can accessa free list of them here.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Here's What You Should Know About FACC AG's (VIE:FACC) 1.2% Dividend Yield
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Dividend paying stocks like FACC AG (VIE:FACC) tend to be popular with investors, and for good reason - some research suggests a significant amount of all stock market returns come from reinvested dividends. Yet sometimes, investors buy a stock for its dividend and lose money because the share price falls by more than they earned in dividend payments.
Some readers mightn't know much about FACC's 1.2% dividend, as it has only been paying distributions for a year or so. There are a few simple ways to reduce the risks of buying FACC for its dividend, and we'll go through these below.
Explore this interactive chart for our latest analysis on FACC!
Companies (usually) pay dividends out of their earnings. If a company is paying more than it earns, the dividend might have to be cut. Comparing dividend payments to a company's net profit after tax is a simple way of reality-checking whether a dividend is sustainable. FACC paid out 23% of its profit as dividends, over the trailing twelve month period. With a low payout ratio, it looks like the dividend is comprehensively covered by earnings.
Another important check we do is to see if the free cash flow generated is sufficient to pay the dividend. FACC's cash payout ratio last year was 19%, which is quite low and suggests that the dividend was thoroughly covered by cash flow. It's positive to see that FACC's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
As FACC has a meaningful amount of debt, we need to check its balance sheet to see if the company might have debt risks. A rough way to check this is with these two simple ratios: a) net debt divided by EBITDA (earnings before interest, tax, depreciation and amortisation), and b) net interest cover. Net debt to EBITDA measures a company's total debt load relative to its earnings (lower = less debt), while net interest cover measures the company's ability to pay the interest on its debt (higher = greater ability to pay interest costs). With net debt of more than twice its EBITDA, FACC has a noticeable amount of debt, although if business stays steady, this may not be overly concerning.
We calculated its interest cover by measuring its earnings before interest and tax (EBIT), and dividing this by the company's net interest expense. Net interest cover of 5.30 times its interest expense appears reasonable for FACC, although we're conscious that even high interest cover doesn't make a company bulletproof.
We update our data on FACC every 24 hours, so you can always getour latest analysis of its financial health, here.
Before buying a stock for its income, we want to see if the dividends have been stable in the past, and if the company has a track record of maintaining its dividend. With a payment history of less than 2 years, we think it's a bit too soon to think about living on the income from its dividend. During the past one-year period, the first annual payment was €0.11 in 2018, compared to €0.15 last year. Dividends per share have grown at approximately 36% per year over this time.
FACC has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.
Examining whether the dividend is affordable and stable is important. However, it's also important to assess if earnings per share (EPS) are growing. Growing EPS can help maintain or increase the purchasing power of the dividend over the long run. Over the past five years, it looks as though FACC's EPS have declined at around 7.2% a year. If earnings continue to decline, the dividend may come under pressure. Every investor should make an assessment of whether the company is taking steps to stabilise the situation.
To summarise, shareholders should always check that FACC's dividends are affordable, that its dividend payments are relatively stable, and that it has decent prospects for growing its earnings and dividend. Firstly, we like that FACC has low and conservative payout ratios. Earnings per share are down, and to our mind FACC has not been paying a dividend long enough to demonstrate its resilience across economic cycles. Ultimately, FACC comes up short on our dividend analysis. It's not that we think it is a bad company - just that there are likely more appealing dividend prospects out there on this analysis.
Without at least some growth in earnings per share over time, the dividend will eventually come under pressure either from costs or inflation. Very few businesses see earnings consistently shrink year after year in perpetuity though, and so it might be worth seeing what the 3analysts we track are forecasting for the future.
We have also put together alist of global stocks with a market capitalisation above $1bn and yielding more 3%.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Asian shares gain, Shanghai up 2.6%, on Fed rate cut talk
BANGKOK (AP) — Asian shares were higher on Thursday, with the Shanghai benchmark up 2.6%, after the Federal Reserve reaffirmed that it's prepared to cut interest rates if needed to shield the U.S. economy from trade conflicts or other threats.
The Thursday tracked modest gains on Wall Street. The 10-year Treasury note slid to 1.98%, its lowest level since November 2016, as investors bet on at least one interest rate cut this year, possibly as early as July.
Tokyo's Nikkei 225 index added 0.7% to 21,478.93 while the Hang Seng in Hong Kong surged 1% to 28,486.39. Shanghai was up 2.6% to 2,992.29 while Australia's S&P ASX 200 picked up 0.3% to 6,664.70. India's Sensex edged 0.1% higher to 39,139.47. Shares were flat in Taiwan and Jakarta and higher elsewhere in Southeast Asia.
Confirmation that Presidents Donald Trump and Xi Jinping will meet at the Group of 20 summit in Osaka next week has raised hopes for a political compromise on their tariffs war.
U.S. Trade Representative told a congressional hearing that he plans to speak with China's top trade envoy, Vice Premier Liu He, soon and also to meet with him in Osaka.
Prospects for a breakthrough in stalled negotiations remain uncertain, given the acrimony in recent weeks over who is to blame over the impasse.
The widely expected decision by the U.S. central bank's policymakers to leave the Fed's benchmark interest rate unchanged in a range of 2.25%-2.5% and the signal of openness to lower rates later reassured investors who have been worried the trade war between Washington and Beijing could weigh on global economic growth, and by extension, corporate profits.
The reaction to the Fed's midafternoon statement was more pronounced in the bond market, where the yield on the 10-year Treasury note slid to 2.03%, its lowest level since November 2016. The move signals that bond traders see an increased likelihood that the Fed will lower rates. Investors are betting on at least one interest rate cut this year, possibly as early as July.
The S&P 500 rose 0.3% to 2,926.46, within striking range of its all-time high, set on April 30. The Dow Jones Industrial Average gained 0.1% to 26,504. The Nasdaq composite added 0.4% to 7,987.32, and the Russell 2000 index of smaller companies picked up 0.3% to 1,555.58.
Major stock indexes in Europe finished mixed.
U.S. stock indexes spent much of the day wavering between small gains and losses as investors waited for the Fed to deliver its update on interest rates following a two-day meeting of policymakers.
The 10-year Treasury yield has been declining steadily since hitting a high of 3.23% last November. It fell to 1.98% Thursday, down from 2.06% late Tuesday.
Benchmark crude oil added 75 cents to $54.73 per barrel in electronic trading on the New York Mercantile Exchange. It lost 14 cents to $53.97 a barrel. Brent crude oil, the international standard, picked up 83 cents to $62.65 a barrel.
The dollar fell to 107.65 Japanese yen from 108.10 yen on Wednesday. The euro rose to $1.1267 from $1.1226. |
Some Compagnie Plastic Omnium (EPA:POM) Shareholders Are Down 44%
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The simplest way to benefit from a rising market is to buy an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. That downside risk was realized byCompagnie Plastic Omnium SA(EPA:POM) shareholders over the last year, as the share price declined 44%. That falls noticeably short of the market return of around 5.9%. However, the longer term returns haven't been so bad, with the stock down 24% in the last three years. The good news is that the stock is up 2.0% in the last week.
See our latest analysis for Compagnie Plastic Omnium
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During the unfortunate twelve months during which the Compagnie Plastic Omnium share price fell, it actually saw its earnings per share (EPS) improve by 32%. Of course, the situation might betray previous over-optimism about growth. It's surprising to see the share price fall so much, despite the improved EPS. But we might find some different metrics explain the share price movements better.
Compagnie Plastic Omnium managed to grow revenue over the last year, which is usually a real positive. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.
The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).
We know that Compagnie Plastic Omnium has improved its bottom line lately, but what does the future have in store? If you are thinking of buying or selling Compagnie Plastic Omnium stock, you should check out thisfreereport showing analyst profit forecasts.
We'd be remiss not to mention the difference between Compagnie Plastic Omnium'stotal shareholder return(TSR) and itsshare price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Dividends have been really beneficial for Compagnie Plastic Omnium shareholders, and that cash payout explains why its total shareholder loss of 42%, over the last year, isn't as bad as the share price return.
Investors in Compagnie Plastic Omnium had a tough year, with a total loss of 42% (including dividends), against a market gain of about 5.9%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 1.2% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Keeping this in mind, a solid next step might be to take a look at Compagnie Plastic Omnium's dividend track record. Thisfreeinteractive graphis a great place to start.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss thisfreelist of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on FR exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Does The Polytec Holding AG (VIE:PYT) Share Price Fall With The Market?
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Anyone researching Polytec Holding AG (VIE:PYT) might want to consider the historical volatility of the share price. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. First, we have company specific volatility, which is the price gyrations of an individual stock. Holding at least 8 stocks can reduce this kind of risk across a portfolio. The other type, which cannot be diversified away, is the volatility of the entire market. Every stock in the market is exposed to this volatility, which is linked to the fact that stocks prices are correlated in an efficient market.
Some stocks are more sensitive to general market forces than others. Beta is a widely used metric to measure a stock's exposure to market risk (volatility). Before we go on, it's worth noting that Warren Buffett pointed out in his 2014 letter to shareholders that 'volatility is far from synonymous with risk.' Having said that, beta can still be rather useful. The first thing to understand about beta is that the beta of the overall market is one. A stock with a beta greater than one is more sensitive to broader market movements than a stock with a beta of less than one.
Check out our latest analysis for Polytec Holding
Given that it has a beta of 1.42, we can surmise that the Polytec Holding share price has been fairly sensitive to market volatility (over the last 5 years). If this beta value holds true in the future, Polytec Holding shares are likely to rise more than the market when the market is going up, but fall faster when the market is going down. Beta is worth considering, but it's also important to consider whether Polytec Holding is growing earnings and revenue. You can take a look for yourself, below.
Polytec Holding is a rather small company. It has a market capitalisation of €195m, which means it is probably under the radar of most investors. Relatively few investors can influence the price of a smaller company, compared to a large company. This could explain the high beta value, in this case.
Beta only tells us that the Polytec Holding share price is sensitive to broader market movements. This could indicate that it is a high growth company, or is heavily influenced by sentiment because it is speculative. Alternatively, it could have operating leverage in its business model. Ultimately, beta is an interesting metric, but there's plenty more to learn. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as Polytec Holding’s financial health and performance track record. I urge you to continue your research by taking a look at the following:
1. Future Outlook: What are well-informed industry analysts predicting for PYT’s future growth? Take a look at ourfree research report of analyst consensusfor PYT’s outlook.
2. Past Track Record: Has PYT been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look atthe free visual representations of PYT's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how PYT measures up against other companies on valuation. You could start with thisfree list of prospective options.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Is There An Opportunity With Aggreko Plc's (LON:AGK) 42% Undervaluation?
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Does the June share price for Aggreko Plc (LON:AGK) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by taking the foreast future cash flows of the company and discounting them back to today's value. I will be using the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward.
Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
View our latest analysis for Aggreko
We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value:
[{"": "Levered FCF (\u00a3, Millions)", "2019": "\u00a3133.93", "2020": "\u00a3168.60", "2021": "\u00a3196.73", "2022": "\u00a3213.00", "2023": "\u00a3224.00", "2024": "\u00a3232.72", "2025": "\u00a3239.92", "2026": "\u00a3246.00", "2027": "\u00a3251.27", "2028": "\u00a3255.97"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x4", "2020": "Analyst x4", "2021": "Analyst x6", "2022": "Analyst x1", "2023": "Analyst x1", "2024": "Est @ 3.89%", "2025": "Est @ 3.09%", "2026": "Est @ 2.53%", "2027": "Est @ 2.14%", "2028": "Est @ 1.87%"}, {"": "Present Value (\u00a3, Millions) Discounted @ 7.42%", "2019": "\u00a3124.68", "2020": "\u00a3146.12", "2021": "\u00a3158.73", "2022": "\u00a3159.98", "2023": "\u00a3156.63", "2024": "\u00a3151.49", "2025": "\u00a3145.39", "2026": "\u00a3138.78", "2027": "\u00a3131.97", "2028": "\u00a3125.15"}]
Present Value of 10-year Cash Flow (PVCF)= £1.44b
"Est" = FCF growth rate estimated by Simply Wall St
The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 10-year government bond rate (1.2%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 7.4%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = UK£256m × (1 + 1.2%) ÷ (7.4% – 1.2%) = UK£4.2b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= £UK£4.2b ÷ ( 1 + 7.4%)10= £2.05b
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is £3.49b. To get the intrinsic value per share, we divide this by the total number of shares outstanding.This results in an intrinsic value estimate of £13.71. Compared to the current share price of £7.97, the company appears quite undervalued at a 42% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind.
We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Aggreko as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.4%, which is based on a levered beta of 0.931. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Although the valuation of a company is important, it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. What is the reason for the share price to differ from the intrinsic value? For Aggreko, I've compiled three essential factors you should further examine:
1. Financial Health: Does AGK have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does AGK's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of AGK? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the LON every day. If you want to find the calculation for other stocks justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
What Do Mark Zuckerberg, Marco Rubio, and Patrick Drahi Have in Common?
Some days, macroeconomic conditions or developments with major companies provide the juice for the news cycle. On others, we remember that if you're rich enough or close enough to the centers of power, or both, you can change the conversation yourself.
Tuesday was the second kind of day. Mark Zuckerberg announced thatFacebook(NASDAQ: FB)will lead a large consortium to create a new digital currency called Libra, and it actually may be both genuinely useful and properly private.
Sen. Marco Rubio (R-Fla.), meanwhile, unveiled a bill that would subject foreign companies listed on U.S. stock exchanges to the same financial standards and regulations as domestic ones -- a move that is a not-even-thinly disguised jab at China.
And Patrick Drahi, who founded the France-based telecom and mass-media giant Altice, is making a bid to take storied British auction houseSotheby's(NYSE: BID)private.
In thisMarketFoolerypodcast, host Chris Hill and Motley Fool Director of Small Cap Research Bill Mann dig into the background of all these stories and how they might affect investors. And they close out with an amuse-bouche of two food-and-beverage related anecdotes: Bombay Sapphire gin is being recalled for an intriguing reason, and Germany's latest food business craze is ... sausage vending machines?
To catch full episodes of all The Motley Fool's free podcasts, check out ourpodcast center. A full transcript follows the video.
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This video was recorded on June 18, 2019.
Chris Hill:It's Tuesday, June 18. Welcome toMarketFoolery! I'm Chris Hill. With me in studio, Bill Mann. Thanks for being here!
Bill Mann:You know, Chris, for pretty thin news day, we have a pretty exciting slate of things to talk about. I'm pretty excited!
Hill:Yeah, we do have a bunch of things. Yeah, I'm not going to lie, last night I was looking and thinking, I really hope the news fairy shows up. And in some ways, the news fairy did show up. We do have a well-known company that's being taken private. And we do have the latest in international food and beverage news.
We've got to start, though, with Facebook. Facebook announced it is leading a consortium creating a new digital currency called the Libra -- we'll put aside the name for the moment -- that's set to launch early next year. The Libra currency is not going to be run by Facebook. It's going to be run by a nonprofit association. Let's start here. Are you excited about this news? Do you think this is promising for Facebook the stock? What is your reaction to this news? Mine was one of ever-so-mild revulsion.
Mann:Revulsion! I love that! First of all, there's a guy onTwitternamed @lonocapital. That's probably not his real name. But he immediately said, "Why aren't we calling these Zuck Bucks?"
Hill:It's a fair question. You know what? They're going to be called Zuck Bucks.
Mann:They're going to be called Zuck Bucks, and I just want to put it out there that that's the origin story. I think, ultimately, what we may be seeing now is that Facebook is about to do for crypto what AOL did for the internet. This is the first time you're seeing something that's put out there where the use case is the thing. With Bitcoin, Ethereum, all the others, it's the production cases, the store of value, it's the anonymity. But in this case, the Libra consortium is talking primarily about usability and bringing the unbanked onto a platform where they have access to funds at the ready. For me, I'm not revolted at all.
The thing I was really interested in was the fact that this is Facebook, which let's just say has had some excitement around their commitment to privacy. They've already said, "We won't have access to who it is. We won't be able to connect the Libra name with a real name or a Facebook profile."
Hill:I think the guy who's going to be running this, I want to say his name is David Marcus. I could have that wrong. He was on CNBC this morning. He was very quick to draw the line between Facebook and this nonprofit association. I say revulsion. You point out, as you said, the use case. The fact of the matter is, there are tens of millions of people, so many people who are, as you said, unbanked. This is one potential solution for those people.
But to the latter point, the fact that it's Facebook, it really seems like the sort of thing where, if it was any other tech giant --
Mann:That would be Cook Bucks. [laughs] Go ahead.
Hill:-- ifApplewas helping to set this up,Amazon,Alphabet,Microsoft,it would not be the same thing. The conversation would be much more about the use case, what is the addressable market here, all of those questions, which are all valid questions that need to be asked about this. But right now, question No. 1 out of the gate, and I think rightfully so, is about privacy.
Mann:Yeah. And it absolutely should be. And I think that Facebook, in some ways, is driving this, because if they weren't doing it, you know full well that Google and Apple and a lot of those other companies that you mentioned are interested in doing something like this. Facebook doesn't seem like they're going to make a whole lot of money off it. I mean, they and the other members, the Libra consortium will make money off of the interest of the float, the money that's kept within the currency.
It seems to me, though, that this is ultimately a long game for Facebook to protect its other ad business, which does, in fact, have privacy concerns. If they weren't going to do it, I think it's pretty clear that one of the other one big ones would, and that would be a threat.
Hill:It is going to be interesting to see how this plays out. As I mentioned, this is something that's not going to launch until 2020. They have plenty of time to get this right, both from a technical standpoint and from a communications standpoint. Marcus was doing his best this morning. And again, I think the questions around privacy are logical. [laughs] Facebook has earned those questions, in a way. But, there is absolutely the opportunity for them to get this right.
Mann:I totally agree. This is potentially a global currency. I think that if the white paper is what actually ends up coming to be, there's a lot more privacy that's being built into the Zuck Bucks than people seemed to have anticipated. Certainly, I would have anticipated that Facebook would have, in a slightly more overt way, had its fingers in the information stream. And it just doesn't seem like they are. Now, maybe we're being a little Pollyanna-ish about this, haven't thought about the other ways in which they might backdoor get that information. But from what I have seen so far, they've done a pretty good job. I'm not revolted like you. I'm intrigued, because I think one of the big questions about cryptocurrencies in the blockchain is, what are the actual use cases that are useful to the average person? Those have not been as apparent yet, for all of the excitement about cryptocurrencies.
Hill:Well, for what it's worth, you and I actually didn't talk about this at all before we came in the studio, and as a result of this conversation, I'm now more intrigued than I am put off by this.
Mann:Very good! That's my job! [laughs]
Hill:I like to point out everyone once in a while that Fool global headquarters is in Alexandria, Virginia. We are right across the Potomac River from Washington, D.C. and therefore, Capitol Hill. I would say 99 days out of 100, we ignore what's happening on Capitol Hill. We're about investors and investing in business. Every once in a while, something happens on Capitol Hill that gets our attention because it is squarely in the wheelhouse of investors. I think this qualifies. This is a bill that's been introduced by Sen. Marco Rubio of Florida requiring that all companies listed on American stock exchanges are subject to the same standards and regulations. While on the surface, you may look at that and think --
Mann:"Duh!" [laughs]
Hill:"Aren't they already?" Certainly, U.S.-based companies are. But there are plenty of companies whose stocks are listed on the exchanges, but they are based outside the United States that do not have the same requirements when it comes to financial disclosure. This seems a little bit like a no-brainer. Which in no way means it's going to become law.
Mann:Yeah. We can talk about what's at stake here. And really, as in a lot of things of this nature, they have a target in mind. The target in this case are the 220-some-odd Chinese companies that are listed in the U.S. China requires that business books be kept and records be kept in China, and the access to those books to anybody from outside of China is restricted. That means that U.S. accounting firms have very, very little real access to do full audits of Chinese companies. That's $1.8 trillion in market cap between all the companies that are listed in the U.S. So this matters a huge amount for American investors because frankly, we saw a little more than a decade ago a huge number of Chinese companies who came public here, many of which turned out to be frauds. Shame on us if we don't assume that that possibility exists with the large number of Chinese companies that are listed here again.
Hill:I'm reminded of the great documentary which I believe is still onNetflixcalled theChina Hustle. It really goes to some of those fraudulent companies that you mentioned. Yeah. As you said, when Senator Rubio and his staff were writing up this bill, they weren't taking aim atSpotify.
Mann:No! [laughs]
Hill:They were squarely looking at the companies in China.
Mann:These types of things aren't cost-free for the U.S. or for American companies. For example,Alibabajust announced that it was going to do a secondary listing. You would think that the U.S. would be a logical place for it. It's going to be a $20 billion listing. They're doing it in Hong Kong. It's often forgotten that, though they seem like utilities, the exchanges are companies. And many of them, includingNasdaq, are publicly traded companies. They attract investors by being trustworthy. You trust the U.S. exchanges because they're here, they've got regulatory oversight, you think that they are doing some sort of standard checking for the companies that they list. But, they actually attract listing companies by making things easier for them to list. So, there's this incredible tension. So, the fact that the U.S. government feels like it should come in and say, "We're not able to see the books. We think this is a potential risk for American investors," this is really something. We stand on principle and say, "Yes, this should be done," but it's not free.
Hill:I'm going to ask you to be a political prognosticator. I apologize for this. Do you see this having real prospects in terms of becoming law?
Mann:I do, yeah, absolutely! It is perhaps an open secret that very powerful members of both parties are pretty quietly supportive of President Trump and the tariffs and all the pressure that he's putting on China. This is another one. President Trump has come out and said, "We should cut off Chinese companies from the U.S. capital markets." And I don't think that this is part and parcel of that. The PCAOB, which is the main accounting authority in the U.S., along with the SEC, has long warned about this. They put out a big white paper a year ago. But it sure is a convenient place to add a little bit of additional pressure. So I think this actually has a pretty good chance of passing.
Hill:Sotheby's run as a public company after 31 years is coming to an end. The auction house is being bought by one person. [laughs]
Mann:By a guy.
Hill:By one guy. It's not being bought by a private equity firm or by a larger auction house, it's being bought by a man named Patrick Drahi, who made his billions of dollars in telecommunications. He is clearly a fan of art or auctions or both because he is buying Sotheby's for $2.7 billion. That is a hell of a premium.
Mann:Fifty-six percent above the closing price on Friday.
Hill:That is a massive premium. He must really want this thing.
Mann:I tell you what. If Sotheby's had actually sold itself through auction, in this process -- I don't know why they didn't. This would have been their all-time biggest win. They had someone who wants the company, and offered an enormous premium. I would say there is almost a certitude that Sotheby's is going to go private because investors will absolutely accept this.
Hill:By the way, we have to say goodbye to one of the great ticker symbols as a result of this, which is BID. Fantastic ticker symbol. This was a company that was on The Motley Fool's collective radar for a number of years. Is it just too niche a business?
Mann:I don't think that's it. Actually, I was the first one to recommend Sotheby's -- this was inHidden Gemsback in 2005 -- to members. Honestly, one of the reasons that I recommended it is, I looked at its position, having basically a duopoly between it and Christie's in the art world, and understanding that it was a fairly lumpy business, but any business where you are getting paid to sell other people's stuff ought to be a good business.
But, I'm actually happy to see Sotheby's taken out. It's been kind of a disappointment from an investing perspective. They have not been very good about controlling their own costs, which is something that they probably don't have to answer to as a private company. It's just not as great of a business as it seems like it ought to be.
Hill:Authorities in Canada have issued a recall of Bombay Sapphire gin. Is the gin tainted, you may ask? Is it poisoned? No.
Mann:Even better! [laughs]
Hill:It has not been properly diluted. Normally, Bombay Sapphire gin is 80 proof. For those who are not imbibers of the liquor, that simply means 40% alcohol. Normally, 80 proof. This is being recalled because it's 154 proof.
Mann:Which is more. If anything, they ought to be congratulated.
Hill:It's 77% alcohol.
Mann:Yeah. Bombay Sapphire, owned by the Bacardi company. Apparently, during one of their runs, they were making a switch-over and failed to dilute some gin. And it made its way into the Canadian market. Eventually the authorities figured it out. I don't know, maybe people were just lying in the streets after a single gin and tonic, like drinking a hammer, I guess -- [laughs] 154 proof gin! [laughs]
Hill:I'm not accusing the authorities in Canada of anything untoward, but --
Mann:It's the anti-fun patrol!
Hill:I would bet a decent amount of money that one of the following two things occurred in the run-up to this story breaking. One is that not all of the bottles got recalled. A couple got stowed away for testing purposes. The other is that some enterprising member of the regulatory authority in Canada said, "But shouldn't we also consider using this as a tourism opportunity?" Look, you saw plenty of marijuana tourism taking place --
Mann:[laughs] Sure! What goes better with marijuana than really, really strong gin? It's a great story. The thing I love about this is that it's actually the second time this has happened. With Georgian Bay, the same thing happened earlier this year. It was like 1,000 cases that went out at double the proof. Something is going on among Canadian producers of gin who are selling into Canada, and I am saying, maybe you should try that here. [laughs]
Hill:ForgetUberEats,Grubhub, or any other kind of delivery service. The latest food business craze in Germany is sausage vending machines.
Mann:My favorite!
Hill:The Independent is reporting these machines are booming outside German cities where shops are less likely to stay open for long hours. They typically stock three to four types of sausages, along with potato salad, so you can have your typical German feast right there. We were talking before we started taping, obviously, the humor of this headline catches our attention. But then you actually read the story, and there's a pretty good business case for these machines. [laughs]
Mann:When I first saw this -- I don't know the German word for "hipster," but I assumed it was it was [in a German accent]die hipsterswere putting these up in Berlin and in the big cities, because it just seems like a move that... but, this is actually happening in small towns where grocery stores are either unavailable or just aren't open that much. It's a way to extend the flexibility and extend the choices for people who live in these small towns. If you spend any time in Germany, you know that much of the country is dotted with these tiny towns. This is just an added convenience. Along with the overpowering gin, I really, really am excited for this to be tried in the United States of America.
Hill:[laughs] Yeah, how is this not already a thing in Wisconsin, by the way? Get on this, Wisconsin!
Mann:The Autobrat! Come on!
Hill:Also, shout out to Germany. For the longest time -- and deservedly so -- Japan got all the props for, shall we say, interesting vending machines, where you can get sake in a vending machine, you can get underwear in a vending machine.
Mann:Sometimes in the same machine!
Hill:Sometimes in the same machine. But, good for Germany for getting on Japan's corner a little bit.
Mann:It's definitely the kind of innovation that we here at The Motley Fool can completely get behind.
Hill:Bill Mann, thanks for being here!
Mann:Thanks, Chris!
Hill:As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. That's going to do it for this edition ofMarketFoolery. The show is mixed by Dan Boyd. I'm Chris Hill. Thanks for listening. We'll see you tomorrow.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors.Bill Mannhas no position in any of the stocks mentioned.Chris Hillowns shares of Amazon. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Facebook, Microsoft, Netflix, and Twitter. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool recommends Grubhub, Nasdaq, and Uber Technologies. The Motley Fool has adisclosure policy. |
After a bizarre buyout blowup, Vintage moves on to Red Robin
A private equity firm that's no stranger to protracted buyout battles is intensifying its pursuit ofRed Robin, the kitschy-casual burger chain that's a staple at shopping malls across the US.Last week,Vintage Capital Managementoffered to acquire Red Robinfor $40 per share, representing a 57% premium to the company's prior share price. Red Robin was apparently not receptive to the bid. And this week, Vintage founder Brian Kahn sent a letter to Red Robin's board calling for a shareholder meeting, where he plans to propose a new slate of directors that would be more amenable to a possible sale.In the letter, Kahn wrote that Red Robin has neither announced a formal process to explore a deal with Vintage nor reached out to the firm to discuss the proposal. Vintage owns more than 11.5% of Red Robin, a Colorado-based business with a market cap of just over $400 million. In an SEC filing, Red Robin said it would review Vintage's request for a special meeting and defended its current board members as "established industry leaders."Vintage is a Florida-based firm that invests primarily in the consumer, aerospace, defense and manufacturing sectors, with a portfolio that includes thePapa Murphy'spizza chain andBuddy's Home Furnishings, a rent-to-own company operating in the US. In recent months, the firm's pursuit of a very similar business concluded with one of the stranger turns of events in recent private equity history.That business wasRent-A-Center, another rent-to-own company that Vintage agreed to acquire last June for $15 per share, equating to an enterprise value of about $1.37 billion. The agreement, struck on June 17, came with a six-month deadline; before those six months were up, both Vintage and Rent-A-Center had the option to extend the deadline another three months. All they had to do was give written notice to the other party of their desire to do so.Those six months came and went. The very next day, on December 18, Rent-A-Center announced that it had terminated the deal with Vintage after not receiving notice of an extension and noted that Vintage now owed the company a $126.5 million breakup fee. Vintage promptly responded with a press release saying the "purported termination" was "invalid." B. Riley Financial, which had been a co-investor alongside Vintage in the deal, voiced its agreement. And before long, the issue had moved to the courts.A few months later, in March 2019, a Delaware court sided with Rent-A-Center, saying the company was fully within its rights to call off the merger. The ruling from Vice Chancellor Sam Glasscock III is worth quoting in full:"Vintage's arguments are after-the-fact rationalizations as to why failure to give written notice of election to extend is excused. I am left to the startling conclusion that, having vigorously negotiated a provision under which Vintage was entitled to extend the End Date simply by sending Rent-A-Center notice of election to do so by a date certain, Vintage and B. Riley personnel, in the context of this $1 billion-plus merger, simply forgot to give such notice."Not ideal.But now, Vintage has moved on from home furnishings to hamburgers. The firm surely hopes its demand for a new board at Red Robin is more effective than its recent calendar management.Featured image via LauriPatterson/iStock/Getty Images Plus
Related read:PE shop gears up for fight to take Red Robin private |
Survey reveals 10 least and most trusted professions in the UK
Doctors are the most trusted professionals in the UK, according to a survey. Photo: Online Marketing/Unsplash There are plenty of ways to make a living, but not all of them will make you popular. In a survey of 1,200 workers by job board CV-Library , Brits have revealed the professions they find least trustworthy. With almost four in five (78%) of Brits believing them to be greedy, unreliable and irritating, politicians were found to be the least-trusted of all UK professionals. READ MORE: Revealed the UK's most trusted financial providers Meanwhile, with 38% of Brits finding them untrustworthy, journalists came second. And car salespeople ranked third, with just over a quarter (27%). Telesales representatives (24%), bankers (23%), paparazzi (22%), estate agents (15%), recruiters (14%), lawyers (9%) and bailiffs (7%) also made the list. When asked why, Brits claimed these people lack morals (66%), and are financially greedy (62%) and unreliable (56.5%), whilst generally just being irritating (26.6%). READ MORE: This type of LinkedIn photo can make you look more trustworthy What with the Brexit debacle still looming over the country, its little wonder Brits arent inclined to trust politicians right now, said Lee Biggins, CEO of CV-Library. He added: It also appears to be a common theme that sales-driven occupations, such as car sales, telesales, estate agents and recruiters are largely disliked. Unfortunately, its just the nature of the trade. Being proactive in making sales can be perceived as being pushy or irritating. However, without these professions, many businesses wouldnt be able to flourish. READ MORE: Psychiatrists use an old trick to get people to trust them with their secrets and it works just as well in business The survey also found that jobs that contribute to the public good for example, health or education-related roles are the most-trusted professions in the UK. Doctors topped the list, with 61% of Brits believing them to be trustworthy, while nurses came second at 40%, and teachers and paramedics stole joint third at 37%. Story continues Police officers (23%), armed forces members (20%), vets (16%), scientists (14%), judges (13%) and hairdressers (8%) rounded out the top 10. READ MORE: One in four Europeans trust AI over politicians report According to the study, trust is associated with professionals who Brits believe to have their best interests at heart (73%) and be in their job for a good cause (71%), on top of being reliable (65%) and friendly (16%). |
75% of women in the UK workplace fear being exposed as career frauds
Workers in the City of London. Photo: Philip Toscano/PA Archive/PA Images Millions of UK employees are suffering from impostor syndrome, and women and LGBTQ+ workers are being hit the hardest, new research shows. A survey of over 2,300 workers by job site Totaljobs has revealed a whopping seven in 10 23 million people worry about being exposed as frauds who arent good enough for their jobs, despite any evidence to the contrary. And women, in particular, may experience the double whammy of being both disadvantaged in the workplace and held back by their own involuntary low sense of self-worth. READ MORE: A famous British philosopher explains the best way to deal with anxiety The survey found women are particularly likely to struggle with impostor syndrome, with a whopping three quarters reporting symptoms 10% more than their male counterparts. However, its not just women. People who perceive themselves to part of any minority within the workplace, and those who find themselves under-represented at senior levels, are more susceptible to impostor feelings, the survey found. Queer workers are are more likely to question their abilities in the workplace. This is especially true for bisexual workers, 78% of whom reported struggling with those feelings 9% higher than their straight colleagues. READ MORE: 8 toxic habits to give up if you want to be confident and successful And the fear of being discovered as a fraud divides Brits across generations, too. Those belonging to the baby boomer generation aged 55 to 75 are in the fortunate position of being 11% less likely than millennials aged 22 to 37 to question their professional suitability, the survey found. Impostor syndrome also flourishes as Brits begin to scale the career ladder. As new managers set out to prove themselves, they also experience greater scrutiny. More than three quarters (77%) of those surveyed in a junior management role said they have felt like impostors. READ MORE: 30-year-old millionaire this is how to beat self-doubt Sadly, these symptoms dont disappear as employees continue to gain professional experience 68% of senior managers admitted to experiencing symptoms of impostor syndrome. Story continues Stress, burnout, anxiety and depression are just a few of the ways impostor syndrome can disrupt our professional lives, according to psychologists. More deceptive than self-sabotage, people who believe themselves to be impostors dont see themselves as deserving or capable of success in the first place. READ MORE: 4 ways you can overcome self-doubt and achieve success Coupled with an ongoing fear of being found out, these individuals often tend to set exaggerated expectations for themselves, that they can only fail to meet. Over six in 10 (63%) of respondents with impostor syndrome symptoms said they principally measure success by their own unrealistic set of standards. When inevitable setbacks occur, it reinforces their perceived impostor status. Impostor syndrome can be seriously damaging to careers blocking potential promotions, pay rises with seven in 10 sufferers admitting they have let colleagues take credit for their work. READ MORE: How you too can overcome impostor syndrome and succeed Kate Atkin, researcher and impostor syndrome expert at Anglia Ruskin University, said: I encourage those who think they might be experiencing impostor phenomenon to talk about it and I think they will soon realise that they are far from being on their own. By endlessly comparing ourselves to the achievements of others we can often forget to reflect on our own success. Recognise your professional skills. Dont just put them down to luck. |
An Intrinsic Calculation For Royal Dutch Shell plc (AMS:RDSA) Suggests It's 41% Undervalued
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How far off is Royal Dutch Shell plc (AMS:RDSA) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by estimating the company's future cash flows and discounting them to their present value. This is done using the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward.
Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
View our latest analysis for Royal Dutch Shell
We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars:
[{"": "Levered FCF ($, Millions)", "2019": "$25.06k", "2020": "$28.50k", "2021": "$26.98k", "2022": "$27.99k", "2023": "$29.58k", "2024": "$29.92k", "2025": "$30.20k", "2026": "$30.43k", "2027": "$30.63k", "2028": "$30.80k"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x12", "2020": "Analyst x10", "2021": "Analyst x7", "2022": "Analyst x2", "2023": "Analyst x2", "2024": "Est @ 1.17%", "2025": "Est @ 0.93%", "2026": "Est @ 0.76%", "2027": "Est @ 0.64%", "2028": "Est @ 0.56%"}, {"": "Present Value ($, Millions) Discounted @ 6.96%", "2019": "$23.43k", "2020": "$24.91k", "2021": "$22.05k", "2022": "$21.38k", "2023": "$21.12k", "2024": "$19.98k", "2025": "$18.85k", "2026": "$17.76k", "2027": "$16.71k", "2028": "$15.71k"}]
Present Value of 10-year Cash Flow (PVCF)= $201.89b
"Est" = FCF growth rate estimated by Simply Wall St
After calculating the present value of future cash flows in the intial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 10-year government bond rate (0.4%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 7%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = US$31b × (1 + 0.4%) ÷ (7% – 0.4%) = US$469b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= $US$469b ÷ ( 1 + 7%)10= $239.05b
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is $440.94b. The last step is to then divide the equity value by the number of shares outstanding. This results in an intrinsic value estimate in the company’s reported currency of $54.81. However, RDSA’s primary listing is in Netherlands, and 1 share of RDSA in USD represents 0.891 ( USD/ EUR) share of LSE:RDSA,so the intrinsic value per share in EUR is €48.86.Compared to the current share price of €28.66, the company appears quite undervalued at a 41% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.
The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Royal Dutch Shell as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7%, which is based on a levered beta of 1.107. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. What is the reason for the share price to differ from the intrinsic value? For Royal Dutch Shell, There are three fundamental aspects you should further research:
1. Financial Health: Does RDSA have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does RDSA's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of RDSA? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. Simply Wall St updates its DCF calculation for every NL stock every day, so if you want to find the intrinsic value of any other stock justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
China's Xi Jinping arrives in North Korea on historic visit
Tens of thousands of North Koreans lines the streets of central Pyongyang on Thursday and cheered as Xi Jinping, the Chinese president, arrived for a two-day state visit with Kim Jong-un to reinforce their uneasy alliance in the face of two leaders increasing tension with the United States. A smiling Kim greeted the crowds as he drove past Chinese flags with Mr Xi in an open-top Mercedes on their way to the Kumsusan Palace of the Sun, a complex that serves as the mausoleum for North Koreas founder, Kim Il Sung. Mr Xi was afforded the honour of being the first foreign leader to have received a tribute at the palace, which fully reflects the enthusiasm and respect of the host, reported the NK News website, citing Chinese state media. In this image taken from a video footage run by China's CCTV, Chinese President Xi Jinping, left, and North Korean leader Kim Jong Un, right, shake hands before their meeting in Pyongyang Credit: CCTV via AP Images of the pomp and grand ceremony would likely have bolstered Mr Xi, who has been embarrassed by mass pro-democracy protests in Hong Kong in recent weeks, and who must face Donald Trump, the US president, at the G20 summit in Japan next week in the midst of a bitter trade dispute. Mr Xi is first Chinese president to visit North Korea in 14 years, and the visit gives Kim a much-needed boost as he strives to restore his image as an international statesman after his failure to secure a deal to relieve punishing international sanctions during a summit with Mr Trump in Hanoi in February. Xi and Kim met in the North's capital on Thursday, their fifth meeting in 15 months Credit: CCTV via AP In meeting with Mr Xi, Kim wants to show Mr Trump that he has Chinas support on nuclear negotiations even as talks have come to a halt with Washington and the next US presidential election looms. Analysts say the trip is equally a chance for China to showcase its influence in the region. Comrade Xi Jinping is visiting... in the face of crucial and grave tasks due to complex international relations, which clearly shows the Chinese party and the government place high significance on the friendship, the Norths official Rodong Sinmun newspaper said on Thursday. The North Korean media revealed little about the substance of their discussions, although it is expected that Pyongyang will seek Beijings help in securing sanctions relief and may discuss future investment through Chinas global development Belt and Road initiative. China is historically North Koreas largest trading partner. Story continues Mr Xi, whose entourage includes the head of Chinas state economic planner, may offer fresh support measures for its floundering, sanctions-bound economy. However, President Xis visit, accompanied by Peng Liyuan, will remain largely symbolic and is unlikely to produce any major announcements or agreements. After he arrived at the airport, the two leaders reviewed a military guard procession and a 21-gun salute. The Chinese president was due to attend a welcoming banquet on Thursday evening and to be entertained by a mass gymnastic performance. He was also expected during his visit to pay tribute at the Friendship Tower, which commemorates Chinese troops who fought together with North Koreans during the 1950-53 Korean War. The conflict ended in a truce, not a treaty, leaving the North technically still at war with South Korea. The timing of Xis visit to North Korea was no accident, said Li Zhonglin, a North Korea expert at Chinas Yanbian University, told Reuters. China could be hoping to play a role in coaxing the North and the United States to resume denuclearisation talks after this years failed Kim-Trump summit in Hanoi, he added. |
The Rank Group (LON:RNK) Share Price Is Down 35% So Some Shareholders Are Getting Worried
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Many investors define successful investing as beating the market average over the long term. But its virtually certain that sometimes you will buy stocks that fall short of the market average returns. Unfortunately, that's been the case for longer termThe Rank Group Plc(LON:RNK) shareholders, since the share price is down 35% in the last three years, falling well short of the market return of around 31%. Unhappily, the share price slid 3.4% in the last week.
See our latest analysis for Rank Group
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During the three years that the share price fell, Rank Group's earnings per share (EPS) dropped by 25% each year. In comparison the 13% compound annual share price decline isn't as bad as the EPS drop-off. So, despite the prior disappointment, shareholders must have some confidence the situation will improve, longer term.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. It might be well worthwhile taking a look at ourfreereport on Rank Group's earnings, revenue and cash flow.
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Rank Group, it has a TSR of -28% for the last 3 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!
While the broader market gained around 1.3% in the last year, Rank Group shareholders lost 15% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 1.0%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought.You can find out about the insider purchases of Rank Group by clicking this link.
There are plenty of other companies that have insiders buying up shares. You probably donotwant to miss thisfreelist of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Will Merlin Entertainments plc's (LON:MERL) Earnings Grow In Next 12 Months?
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Based on Merlin Entertainments plc's (LON:MERL) earnings update in December 2018, analyst forecasts appear to be bearish, with earnings expected to decline by 19% in the upcoming year against the past 5-year average growth rate of 7.9%. Presently, with latest-twelve-month earnings at UK£230m, we should see this fall to UK£186m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company shouldresearch its fundamentals here.
View our latest analysis for Merlin Entertainments
The view from 9 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
This results in an annual growth rate of 5.3% based on the most recent earnings level of UK£230m to the final forecast of UK£233m by 2022. This leads to an EPS of £0.23 in the final year of projections relative to the current EPS of £0.23. As revenues is expected to outpace earnings, analysts expect margins to contract from the current 14% to 11% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Merlin Entertainments, there are three important factors you should look at:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is Merlin Entertainments worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether Merlin Entertainments is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of Merlin Entertainments? Exploreour interactive list of stocks with large growth potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Does Science Group (LON:SAG) Deserve A Spot On Your Watchlist?
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Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story stocks' without revenue, let alone profit. And in their study titledWho Falls Prey to the Wolf of Wall Street?'Leuz et. al. found that it is 'quite common' for investors to lose money by buying into 'pump and dump' schemes.
In contrast to all that, I prefer to spend time on companies likeScience Group(LON:SAG), which has not only revenues, but also profits. While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.
Check out our latest analysis for Science Group
As one of my mentors once told me, share price follows earnings per share (EPS). Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Over the last three years, Science Group has grown EPS by 15% per year. That's a pretty good rate, if the company can sustain it.
I like to see top-line growth as an indication that growth is sustainable, and I look for a high earnings before interest and taxation (EBIT) margin to point to a competitive moat (though some companies with low margins also have moats). While Science Group did well to grow revenue over the last year, EBIT margins were dampened at the same time. So if EBIT margins can stabilize, this top-line growth should pay off for shareholders.
In the chart below, you can see how the company has grown earnings, and revenue, over time. For finer detail, click on the image.
Science Group isn't a huge company, given its market capitalization of UK£81m. That makes it extra important to check on itsbalance sheet strength.
It makes me feel more secure owning shares in a company if insiders also own shares, thusly more closely aligning our interests. So it is good to see that Science Group insiders have a significant amount of capital invested in the stock. Indeed, they hold UK£28m worth of its stock. That's a lot of money, and no small incentive to work hard. Those holdings account for over 34% of the company; visible skin in the game.
One positive for Science Group is that it is growing EPS. That's nice to see. Just as polish makes silverware pop, the high level of insider ownership enhances my enthusiasm for this growth. That combination appeals to me, for one. So yes, I do think the stock is worth keeping an eye on. While we've looked at the quality of the earnings, we haven't yet done any work to value the stock. So if you like to buy cheap, you may want tocheck if Science Group is trading on a high P/E or a low P/E, relative to its industry.
Although Science Group certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, then thisfreelist of growing companies that insiders are buying, could be exactly what you're looking for.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Hamburger Hafen und Logistik Aktiengesellschaft (FRA:HHFA): Set To Experience A Decrease In Earnings?
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In March 2019, Hamburger Hafen und Logistik Aktiengesellschaft (FRA:HHFA) released its earnings update. Generally, analyst forecasts appear to be bearish, with earnings expected to decline by 10% in the upcoming year relative to the past 5-year average growth rate of 14%. Presently, with latest-twelve-month earnings at €112m, we should see this fall to €101m by 2020. Below is a brief commentary around Hamburger Hafen und Logistik's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you canresearch its fundamentals here.
Check out our latest analysis for Hamburger Hafen und Logistik
Longer term expectations from the 8 analysts covering HHFA’s stock is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of HHFA's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of 7.2% based on the most recent earnings level of €112m to the final forecast of €117m by 2022. EPS reaches €1.77 in the final year of forecast compared to the current €1.54 EPS today. Margins are currently sitting at 8.7%, which is expected to expand to 8.7% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Hamburger Hafen und Logistik, there are three fundamental aspects you should further examine:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is Hamburger Hafen und Logistik worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether Hamburger Hafen und Logistik is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of Hamburger Hafen und Logistik? Exploreour interactive list of stocks with large growth potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Was SalMar ASA's (OB:SALM) Earnings Growth Better Than The Industry's?
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After reading SalMar ASA's (OB:SALM) most recent earnings announcement (31 March 2019), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether SalMar's performance has been impacted by industry movements. In this article I briefly touch on my key findings.
Check out our latest analysis for SalMar
SALM's trailing twelve-month earnings (from 31 March 2019) of øre3.6b has jumped 40% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 22%, indicating the rate at which SALM is growing has accelerated. What's the driver of this growth? Well, let’s take a look at whether it is merely because of an industry uplift, or if SalMar has experienced some company-specific growth.
In terms of returns from investment, SalMar has invested its equity funds well leading to a 34% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 22% exceeds the NO Food industry of 13%, indicating SalMar has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for SalMar’s debt level, has increased over the past 3 years from 20% to 31%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 49% to 13% over the past 5 years.
SalMar's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research SalMar to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for SALM’s future growth? Take a look at ourfree research report of analyst consensusfor SALM’s outlook.
2. Financial Health: Are SALM’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out ourfinancial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Oracle Corp (ORCL) Q4 2019 Earnings Call Transcript
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Oracle Corp(NYSE: ORCL)Q4 2019 Earnings CallJun 19, 2019,5:00 p.m. ET
• Prepared Remarks
• Questions and Answers
• Call Participants
Operator
Welcome to Oracle's Fourth Quarter 2019 Earnings Conference Call.
Now, I'd like to turn today's call over to Ken Bond, Senior Vice President, Investor Relations. Sir, I hand the floor to you.
Ken Bond--Senior Vice President, Investor Relations
Thank you, Holly. Good afternoon, everyone, and welcome to Oracle's fourth quarter and fiscal year 2019 earnings conference call. A copy of the press release and financial tables, which includes a GAAP to non-GAAP reconciliation and other supplemental financial information can be viewed and downloaded from our Investor Relations website. On the call today are Chairman and Chief Technology Officer, Larry Ellison and CEO, Safra Catz and Mark Hurd.
As a reminder, today's discussion will include forward-looking statements, including predictions, expectations, estimates or other information that might be considered forward-looking. Throughout today's discussion, we will present some important factors relating to our business, which may potentially affect these forward-looking statements. These forward-looking statements are also subject to risks and uncertainties that may cause actual results to differ materially from statements made today. As a result, we caution you against placing undue reliance on these forward-looking statements and we encourage you to review our most recent reports, including our 10-K and 10-Q and any applicable amendments for a complete discussion of these factors and other risks that may affect our future results or the market price of our stock. And finally, we are not obligating ourselves to revise our results or publicly release any revisions to these forward-looking statements in light of new information or future events.
Before taking questions, we'll begin with a few prepared remarks. And with that, I'd like to turn the call over to Safra.
Safra A. Catz--Chief Executive Officer
Thanks, Ken. Good afternoon, everyone. As you can see, we had a terrific quarter with total revenue growth 1 point above the high end of my guidance and earnings per share $0.07 above the high end of my US dollar guidance. I'll first go over Q4 and recap fiscal year 2019 before moving on to my guidance. I'll then turn the call over to Larry and Mark for their comments. As in prior quarters, I'll review our non-GAAP results using constant dollar growth rate, unless I say otherwise.
Now, the effects of currency movements in Q4 were largely as expected, maybe a smidge more incremental headwind than expected, but that was not a full percentage more. Anyway, total Cloud Services and License Support revenues for the quarter were $6.8 billion, up 3%, while Cloud License and On-Premise License revenues were $2.5 billion, up 15%. In particular, technology license growth was up 19%, making it abundantly clear that customers are investing in the Oracle platform. The key database options necessary to run the Oracle Autonomous Database server grew 21%. I cannot stress enough the stability and growth of our base of customers quarter-after-quarter. Our customers are maintaining and expanding their Oracle environment and in our BYOL, bring your own licence model, they have the portability to use their licenses on-premise, in the cloud or via hybrid environment. This popularity is largely because our products are capable of doing things others just can't do, whether it's security, performance or scalability, and in our cloud, autonomous capabilities. As our customers adopt our technologies, whether via licenses or cloud services, our overall customer base is growing and that growth is starting to accelerate. In addition, the recent interconnect agreement with Microsoft will only help accelerate the transition from on-premise database to be Autonomous Database service.
Now, to the numbers. The gross margin for Cloud Services and License Support was 86%. And as we continue to scale and grow, I expect this will go even higher. Total revenues for the quarter were $11.1 billion, up 4% from last year. Non-GAAP operating income was $5.3 billion, up 7% from last year and the operating margin was 47%, which was up from 46% last year. The non-GAAP tax rate for the quarter was at 16.4%, slightly below our base tax rate of 20% as a result of some discrete items and EPS was $1.16 in US dollars and up 27% in constant currency and 23% in USD. The GAAP tax rate was 3.3%, also a result of some discrete items and GAAP EPS was $1.07 in US dollars and up 41% in constant currency, 36% in US dollars.
Now moving on to recap the full fiscal year, total Cloud Services and License Support revenue was $26.7 billion, growing 4%. Total Company revenues for the year was $39.5 billion growing 3% as compared to 2% total revenue growth in FY '18. Non-GAAP EPS was $3.52 in US dollars, up 19% in constant currency, up 16% in US dollars, driven by operating income growth, share repurchases and lower tax rate. This is mirrored in our operating margin percentage for the full year, which was up slightly to 44% this year. As a reminder, our best ever full year operating margin was 47% and I expect we will surpass that in the coming years as our total revenue growth accelerate and we benefit from greater scale in our business.
Operating cash flow over the last four quarters was $14.6 billion lower than last year only because as you will see at the bottom of our cash flow statement in the 10-K, FY '19 cash tax payments were $1.3 billion higher this year, including the $610 million installments toward the transition tax in Q2 and nearly $540 million in higher tax payments in Q4. Capital expenditures for the year were $1.7 billion and free cash flow over the last four quarters was $12.9 billion. We now have approximately $38 billion in cash and marketable securities. The short-term deferred revenue balance is $8.4 billion, up 3% in constant currency.
As we've said before, we're committed to returning value to our shareholders through technical innovation, strategic acquisitions, stock repurchases, prudent use of debt and the dividend. This quarter, we repurchased 112 million shares for a total of $6 billion. Over the last 12 months, we have repurchased 734 million shares for a total of $36 billion. Over the last five years, we have reduced the shares outstanding by almost 25%, with nearly 60% of the total reduction this past year in FY '19. In addition, we've paid out dividends of $2.9 billion over the last 12 months and the Board of Directors again declared a quarterly dividend of $0.24 per share.
Now to the guidance. My guidance today is a non-GAAP basis and in constant currency. Assuming the current exchange rates remain the same as they are now, currency should have about 1% negative effect on total revenues and about $0.01 negative effect on EPS. So for Q1, total revenues are expected to grow between 1% to 3% in constant currency, and assuming a 1% currency headwind, total revenues are expected to grow between 0% and 2% in USD. Non-GAAP EPS in constant currency is expected to grow between 14% to 16% and be between $0.81 and $0.83 in constant currency. And assuming the $0.01 headwind, non-GAAP EPS in USD is expected to grow between 12% and 14% and be between $0.80 and $0.82 in USD.
Now, this past year, we grew 3%, and for fiscal year 2020, I expect total revenue will grow faster than last year, constant currency, of course, and that we will once again report double-digit EPS growth. Total CapEx for fiscal year '20 is expected to be about $2.2 billion, but it could move a little depending on our bookings. My EPS guidance for Q1 and fiscal year '20 assumes our base rate of 20%. However, one-time tax events could cause actual tax rates for any given quarter to vary from our base both higher or lower, but I expect that it normalizes for these one-time tax events, our tax rate will average around 20% for fiscal year 2020.
And with that, I'll turn it over to Mark for his comments.
Mark Hurd--Chief Executive Officer
Thanks, Safra. Really, we just had a solid quarter from top to bottom. Total revenue was up 4% in constant currency, with Cloud License and Support up 3% and EPS up 27% in constant currency. In apps, we had a great momentum, we grew 6% for the year. We're now at $11.5 billion in trailing 12 months revenue, 92% of that recurs. We continue to grow revenue faster than market and we have just an enormous opportunity in front of us Europe -- in European HCM and I'll talk to that in a second.
In SaaS revenue and bookings, let me just give you a few stats to give you some context of what happened. Overall, European HCM annualized SaaS revenue is now $2.9 billion or call it $3 billion and that it was up in the high 20s. Fusion apps revenue was plus 36% in Q4 and up 32% for the full year. Fusion HCM was up 25% in Q4, a solid growth with nice wins that I'll discuss again in a second. Fusion ERP revenue was up 44%, and also up 44% for the full year. NetSuite ERP was up 28% in Q4, as the strong momentum continues. They had strong bookings in the quarter. And I remind you that last Q4, they had 72% growth in bookings. In addition, there was a plus 30% growth in bookings this Q4, and that's what drove this revenue growth. And when we acquired NetSuite, we had, I don't know, roughly 15% growth rates and those have turned near double now since the acquisition. In our verticals, revenue was up 19% and 32% for the year. In our Data as a Service, just to give you some further context within our SaaS business, our chance -- our challenges related to the broader privacy issues continued and revenue was down 15%.
Now, I'm going to give you an IDC quote that I have to read as is, so I can't improvise, but let me give you the quotes, the words and then the close quotes. Open quotes, Per IDC's latest annual market share results, Oracle gained the most market share globally out of all enterprise applications SaaS vendors three years running -- in calendar year '16, '17 and '18, close quotes. And I can't improvise on that quote, although I'd like to.
So anyway, we just have strong momentum in the app space, I'll talk to you about some of the wins in a second. In our infrastructure ecosystem, the Gap Tech ecosystem was $21.1 billion on a trailing one -- trailing 12 months basis and Q4 was up 7% with database up mid single-digits, driven by mid-teens database license growth. And let me repeat that, mid-teens database license growth. Autonomous Database, and I'm telling you, while the numbers helped us in Q4, they were still small. But the -- if you extrapolate them, they are relatively -- they are -- wait, not relatively, they're very significant. More than 5,000 new trials were added in Q4 alone. We got a great pull-through business with 40% of our Q4 wins. So at 40% of the time we won an Autonomous Database, we pulled through analytics.
We're adding many new customers. So of all the customers ready with Autonomous Database, and you might think we're replacing just our base which by the way we'd be excited to do. About 20% of our customers are just brand new to Oracle. They were not an Oracle database customer when they bought the Autonomous Database. And new workloads are 40%, meaning that I am an Oracle database customer, but I'm putting a different workload on the Autonomous Database that I had on the Oracle database that we have both new and existing customers doing both.
Now to Safra's point and she hit it briefly, I want to hit it just a little harder. In the key database options that you need to run Autonomous, these being RAC and Multi-Tenant and Active Data Guard, if you want the SLA, our license growth was up 21%. So what do you think the market is growing 2, 3, 3.5, whatever number you think from your favorite analyst, this was a huge share gain customer for us -- a share gain quarter for us in database. It was a solid quarter. We exceeded our revenue target and saw 27% EPS growth. Our bookings growth climbed with our renewal rates, meaning our continuing renewal rates of existing customers gives us confidence that our cloud apps business will also just continue to strengthen from here.
Now, I thought I'd give you just a couple of key wins we had during the quarter. And I'm going to try and give you a little more color of the typical size of the companies we're selling to. I'm going to even try and give you a little bit about who we replaced in the deal and give you some rhythm, so you get a feel for all of this. Some of our key wins and I'll focus on some back-office wins. Argo insurance, about a $2 billion company; Coronado Curragh, a mining company in Australia, a $2.3 billion company; Diebold Nixdorf, that's an interesting one because I used to compete with them when I was in NCR. Diebold bought Nixdorf and Diebold was an EVS customer, Nixdorf was an SAP customer. They combined the two and they will be going to Oracle Cloud ERP. So whole Diebold Nixdorf will run on Oracle Cloud ERP.
ENGIE out of Brazil about $1.3 billion, they bought ERP supply chain and procurement, fantastic win for us and they were running on TOTVS, a Brazilian ERP company and so they're net new to Oracle. Experian, which is $1 billion company bought our whole -- really our whole ERP suite, ERP planning, supply chain procurement. They did it against a background of basically having a little bit of everything. They had a little bit of EBS, a little bit of SAP and a little bit of Microsoft and replaced it all with the Oracle Cloud.
Now, this company you may never have heard of, Helmerich & Payne. The reason I've heard of them is their stock symbol on the New York Stock Exchange was HP. And for years, I wanted their stock symbol. And they're about $1.6 billion company. And while I never got the stock symbol from them, we have replaced Epicor with Oracle Cloud ERP at Helmerich & Payne. So -- anyway, that would just give you some idea on that. Ferguson, which is one of the largest plumbing wholesale and distribution companies, they're $21 billion company. They bought ERP, EPM, supply chain procurement, just a tremendous, tremendous win for us and very looking to partner with them.
Santander in the US, another tremendous win for us. Wright Medical which was very competitive. Emerson Electric, Rutgers University, which has deployed not only all of our financials and ERP, but are deploying our new student scheduling system, which deals with all of commissions and -- not commissions, but grants and discounting, very difficult stuff to deal within higher ed. So very key win for us in the quarter. A great HCM win at Waste Management. Waste Management is $13 billion company in Houston. This is HCM payroll talent, some amount of ERP. Tiffany, I'm sure all of you have bought something from Tiffany for some important occasion. Tiffany will be running on our HCM location.
Okay. I'm getting a sign to stop here, but it was a very good quarter in terms of just quality logos and I think what I was -- let me just try to do one -- maybe a couple of other things for you just to give you some flavor because we get asked this in Q&A a lot. I'm just reading down the list. And of what I'm looking at is about 150 on my page. I'd say 120 bought more than one module from us. And if I read the competitors, the -- or the incumbent that that replaced, they starred SAP, EBS, EBS, TOTVS, Microsoft, Epicor, Epicor, Infor, Lawson, Infineon, Microsoft, EBS. I mean, I could go on and on, but that will give you a flavor that we're getting as many, and I didn't do this accounting exactly, but as many of our logos from outside of the traditional Oracle user base as we are from the Oracle user base.
With that, I'll turn it over to Larry.
Lawrence J. Ellison--Chairman of the Board and Chief Technology Officer
Thank you, Mark. As Mark said in Q4, we saw a surge in database license sales. We also saw a very rapid growth in sales of those database options required to run our Autonomous Database. We continue to gain overall database market share as we migrate our database users to the cloud. In the quarter, we added over 5,000 new Autonomous Database trials in our Gen2 public cloud. Our new Gen2 Cloud Infrastructure offers customers a compelling array of advanced technology features, including our self-driving database that automatically encrypts all your data, backs itself up, tunes itself, upgrades itself and automatically patches itself when a security threat is detected. It does all of this autonomously, while running without the need for any human intervention and without the need for any downtime. No other cloud infrastructure provides anything close to these autonomous features.
Ken Bond--Senior Vice President, Investor Relations
Thank you, Larry. Holly, if we can start the Q&A portion of the call, please?
Operator
(Operator Instructions) And our first question comes from the line of Michael Turits, Raymond James.
Michael Turits--Raymond James -- Analyst
Everybody, good evening. Strong quarter in a lot of ways and database obviously stood out, but I would like to ask about the recent Azure partnership. In general, your strategy has been to make sure that on-premise Oracle workloads move to Oracle Cloud. Does this Azure partnership represents an opening to Oracle workloads running on other clouds or is it more directed at just getting Azure services integrated with Oracle Cloud workloads?
Mark Hurd--Chief Executive Officer
All right. It really is most customers have Microsoft technology and Oracle technology. So they might have a Microsoft Analytics suite and their data in an Oracle Database and we want to make it as easy as possible for you to run those Microsoft Analytics and Azure accessing the Oracle Database in the Oracle public cloud and we've built these high speed interfaces and make -- we grew the technologies together, but we also have unified the customer experience, so the customers -- it appeals to the customer, like they're working in one cloud, but they have two suites of products and technologies they have access to and they can interconnect those things. But the Oracle Database is still running in the Oracle Cloud and the Microsoft Analytic technology is running in the Microsoft Cloud, they're just talking to each other at high speed and highly reliable.
Ken Bond--Senior Vice President, Investor Relations
Thank you. Next question, please.
Operator
Our next question will come from the line of Mark Moerdler, Bernstein Research.
Mark Moerdler--Bernstein Research -- Analyst
Congrats on the strong quarter. I'd like to focus my question on the database business and especially Autonomous Database. Mark, Safra, thanks for the data you gave on Autonomous on the call, but can you give us some more color on how we should think about the database's revenue going forward? Is Autonomous Database adoption hitting the stride we're going to visibly see in licence revenue on a quarter-by-quarter basis and what's its impact going forward on cloud? Thanks.
Mark Hurd--Chief Executive Officer
Okay. Well, let me give you what I think as maybe the most interesting thing we can say about this. We have two ways of forecasting our Autonomous Database business. One is the traditional way, where the Field comes out with quarterly forecasts, we put together annual plans and that's exactly what we relied upon for years in terms of giving you guidance. But now that we're in the cloud business, we have some interesting additional data, not around Field sales of UO (ph) bookings for selling our cloud services and our technology, but rather we have real data about consumption inside of our cloud and we started collecting the consumption data because to add capacity to the cloud, as Safra said, depending on bookings, we might have to spend more money. Let me be a little bit more precise. It's not even bookings that drive it, bookings that lead to increased consumption triggers our just-in-time provisioning of our hardware into our public clouds. And right now, we're getting signals from our usage in our Gen2 Cloud that is signaling much faster Autonomous Database growth than we're seeing from our sales forecast. It's just kind of interesting, but encouraging.
Operator
And our next question is going to come from the line of Brad Zelnick, Credit Suisse.
Brad Zelnick--Credit Suisse -- Analyst
Excellent, thanks very much. It's great seeing the business accelerating like this. My question is for Larry. Larry, it's so nice to see the early success in Autonomous Database and demand for database options. But as we think about the long-term prospects of the database business, in years past, a lot of your success was tied to the ISV ecosystem and it would seem the future is increasingly about embracing software developers. First, would you agree with that statement? And how do you see Oracle attracting developers to your database and OCI more broadly?
Lawrence J. Ellison--Chairman of the Board and Chief Technology Officer
Well, I think you're saying the same thing. Why is it attractive to -- why is it good to attract developers because developers write applications and the most important applications are ISV applications, which are used across the board. So I don't think anything has changed at all. Developers were always, if you will, the foundation of our business. We have over a 1 million developers in our ecosystem already and most ISVs, most of the current ISVs in the cloud use the Oracle Database. I mean, everything, the Salesforce.com runs pretty much -- is running on the Oracle Database. Everything that SAP acquired to run in the cloud runs on the Oracle Database. Now, I know SAP said they're going to move to HANA, but they've said that six years ago, haven't quite gotten there yet. Anyway, the -- we go after developers -- actually, we were putting the finishing touches of a program we're going to be announcing to developers at Oracle OpenWorld, which is basically free services to developers (inaudible) if you will. So developers in college, entrepreneurs can -- there's this free service, we will be able to provide this free service that will let developers start on the Oracle Cloud, build their applications and graduate from being maybe a solo entrepreneur, someplace in a dorm in MIT to eventually being an entrepreneur starting a company and then becoming an ISV. That's the cycle we want to sign up people early and we have all sorts of cloud programs we're putting in place to be able to do that.
Ken Bond--Senior Vice President, Investor Relations
Next question, please.
Operator
Our next question will come from the line of John DiFucci, Jefferies.
John DiFucci--Jefferies -- Analyst
Thank you. I'm going to follow up with another database. I know apps was good too, but I can't help myself, I've been waiting for this. Many...
Lawrence J. Ellison--Chairman of the Board and Chief Technology Officer
(Multiple Speakers) too. Obviously, we've been working on this for a long time. And it's great to see it just begin to show up in the numbers.
John DiFucci--Jefferies -- Analyst
It is. And the timing is kind of odd Larry because many infrastructure companies this quarter have -- they have struggled lately. And as you probably know, the logical conclusion from the investment community was that we'd see some relative weakness out of Oracle, but your constant currency infrastructure growth was better than it's been in -- I mean, since you've been doing this, so -- like over the last -- I went back, looking back to the 2006, fiscal '16. And in this quarter, the constant currency growth is better than it's been since -- over that time period. I guess, Larry, you mentioned the options and that's something we've been sort of waiting for and looking for. I guess, can you give a little more detail on that? And then maybe even more generally, maybe Mark, if you can give us some detail on comments -- or comments on the general broad base infrastructure IT demand out there? We're not -- we don't just cover Oracle, right, we're just trying to figure out what's going on out there.
Lawrence J. Ellison--Chairman of the Board and Chief Technology Officer
Okay. So let me -- the two options that I think Mark mentioned them that are absolutely required to use Autonomous Database, one is the multi-tenancy option. This is the one where you can take an existing application, it could be an ISV, you could take an existing application that was never built to be multi-tenant. You move it to the Oracle Database, you don't change a thing and you suddenly have a multi-tenant database. So that's one thing that's required for Autonomous Database. The other thing is this real application clustering. Real application clustering refers to the fact that we use multiple computers to run every database instance. So in case one of those computer should fall, there is -- our systems are fall tolerant, they keep running. So the Autonomous Database never breaks, let me say it again, never breaks (Technical Difficulty)
Operator
Ladies and gentlemen, stand by. Okay. And our next question is going to come from the line of Heather Bellini, Goldman Sachs.
Ken Bond--Senior Vice President, Investor Relations
Heather, could you hold on for a moment? Heather, can you hear me OK?
Heather Bellini--Goldman Sachs -- Analyst
Yeah. Go right ahead. Yeah. Can you hear me? You went silent for a minute before.
Ken Bond--Senior Vice President, Investor Relations
Okay. I apologize to everybody. Why don't -- Larry, would you like to just continue on or...?
Lawrence J. Ellison--Chairman of the Board and Chief Technology Officer
Yeah, I'd like to answer the question.
Heather Bellini--Goldman Sachs -- Analyst
Yeah. John, did you get any of Larry's answer?
Ken Bond--Senior Vice President, Investor Relations
Yeah. Heather, hold on.
Operator
Stand by. Let me open up John's line.
Ken Bond--Senior Vice President, Investor Relations
Thank you, Heather. John, we'll bring you back on the line and we'll kind of figure out. Apologies for this logistics.
Mark Hurd--Chief Executive Officer
Did mine -- mine, do I change seats?
Safra A. Catz--Chief Executive Officer
No, no. It's got to be the network, I think.
Ken Bond--Senior Vice President, Investor Relations
Yeah. Working now.
Lawrence J. Ellison--Chairman of the Board and Chief Technology Officer
Okay. So -- OK...
John DiFucci--Jefferies -- Analyst
Larry, we heard you started...
Lawrence J. Ellison--Chairman of the Board and Chief Technology Officer
We'll talk about the options. So -- OK, let me -- I'm sorry and I'll circle back and repeat my answer. So the answer, there are two options required for Autonomous Database. One is the multi-tenancy option and that allows, let's say, an existing ISV to take an application that was never meant for the cloud, move it to our Autonomous Database with the multi-tenancy option and suddenly without changing their application, their application becomes a multi-tenant cloud application. That's one key feature. And we've seen sales of that skyrocket.
The other key feature of Autonomous Database that's required to use Autonomous Database is this feature called RAC. RAC is the ability to use multiple computers to run a single application or a single database instance. So in case one of those computers should fail, we tolerate that failure and the application keeps running because we have multiple computers. You might have one, you might have two, three, four, but you lose one or two, you still have two, three, four left, whatever you -- however you configure the system. We will only configure Autonomous Database with multiple computers. Autonomous Database never fails. You must have the RAC option to ensure that. RAC options are growing more rapidly than you would expect being driven again by consumption of the Autonomous Database.
So we're seeing very, very rapid adoption. In fact -- I mean, it's -- and other thing that I'd add a little color to this. Initial transaction, a lot of our existing customers might come in with a very small project, let's say a $30,000 ARR project. And within 60, 90, 120 days, that becomes a $120,000 project. And after another few months, it becomes $0.5 million project. So we're really optimistic about this business. And the optimism, and I'm just back to what I said earlier, the optimism was not in Safra's guidance, which is based on sales forecasts. The thing that I find fascinating are the consumption data curves, which shows our consumption rate growing much faster than the Field is currently anticipating. To me, that's just wonderfully encouraging and hopefully this is the beginning of a trend we will find out soon.
Ken Bond--Senior Vice President, Investor Relations
Okay, Holly. If we could now...
Lawrence J. Ellison--Chairman of the Board and Chief Technology Officer
I think Mark had a follow on to this. Didn't you have a question for Mark as well?
Mark Hurd--Chief Executive Officer
He did.
John DiFucci--Jefferies -- Analyst
Just the general...
Mark Hurd--Chief Executive Officer
Could you remind me what it was?
John DiFucci--Jefferies -- Analyst
Yeah. Can you hear me?
Mark Hurd--Chief Executive Officer
Yeah, yeah. I can hear you.
Lawrence J. Ellison--Chairman of the Board and Chief Technology Officer
We can hear you, John.
John DiFucci--Jefferies -- Analyst
Okay. Yeah. It was just we're seeing a lot of funky stuff out there for infrastructure software. And I'm just wondering, I mean you guys just have a broad customer base, just like wondering what you're seeing in general. Are you seeing any -- I mean, your business was strong, but there's a lot of companies that have struggled recently. Are you seeing anything -- any changes out there for infrastructure demand in general, like, beyond Oracle even?
Mark Hurd--Chief Executive Officer
Yeah, yeah. I mean, we have new hot products. I mean, that's the difference. I think that, again, I won't speak to everybody, but when you go out with the Autonomous Database, Larry talked about a lot of different factors. But from a business perspective, we very rarely had a product that we can go talk to somebody at a senior level and say, how would you like to get more secure, save money and get better performance all at the same time? And...
Lawrence J. Ellison--Chairman of the Board and Chief Technology Officer
Yeah. How would you like to outsource the security detection and patching responsibilities to somebody who does this for a living, so you never have to read the name of your company above the fold on the front page talking about how much data you just lost? So we expect -- yeah, I'm going to let Mark talk, I'm sorry. Sorry...
Mark Hurd--Chief Executive Officer
Well, this is a really people message. This is different from saying, we've got a new partitioning -- yeah, anyways. It's just a very different approach for us. And so, we've got new products. You know about the strength, John, you mentioned in cloud apps and we benefit from a set of competitors that are in different stages of maturation, most of which are weak and we've got great products and what we are just now bringing out in Autonomous Database. And so I think that's a bit different just in terms of the various product cycle that we're in versus what other people might be in.
Lawrence J. Ellison--Chairman of the Board and Chief Technology Officer
Yeah. And let me then close with, I couldn't agree more with Mark. Our really good hot new products, like the Autonomous Database, Fusion, cloud application suite, NetSuite, are selling really well and that they're accelerating, they're doing extremely well. Quite frankly, we have some other product lines that we're quite naturally downsizing, like some of the acquired Sun hardware. There are some oldest on-premise software products that aren't really doing well. Mark mentioned data cloud because of all the privacy issues. So yeah, there are some of our businesses that are not, if you will, hot, but the good news is the hot businesses are now bigger than the not so hot businesses and that's determining our future.
John DiFucci--Jefferies -- Analyst
Thank you.
Ken Bond--Senior Vice President, Investor Relations
Great. Thank you, Holly. And Heather (Multiple Speakers)
Mark Hurd--Chief Executive Officer
What Larry said, John -- what Larry said is right. I think it's worth noting. Our SPARC business declined 24%, 25% this quarter. Our NetSuite business grew as we described in the high 20s and they don't cancel out, NetSuite is now bigger. But when we look at the aggregate growth rate of the Company, it's made up of negative 25s and plus 27s, like what I just described. And so it does create the phenomena that Larry described.
Lawrence J. Ellison--Chairman of the Board and Chief Technology Officer
Yeah, yeah. Again, it looks like -- and I swear this will be the last part of the answer to your question. It does look like the top line is moving up modestly, but underneath that, there is really a lot of activity. You have these very -- these modern business like Autonomous Database, Fusion, NetSuite growing very rapidly, taking share, clear number ones in the overall marketplace. (Inaudible) is dominant number one in cloud ERP. And these other businesses that are melting away and we just don't care. We are focused on our star products and our star products are now driving our top line higher.
John DiFucci--Jefferies -- Analyst
Great, thank you.
Operator
All right. And our next question will come from Heather Bellini, Goldman Sachs.
Heather Bellini--Goldman Sachs -- Analyst
Great, thank you. Okay. So, I guess, I should spend a little bit of time on the app segment, given everyone has been focusing on the infrastructure segment so far. It obviously looks like that was another strong quarter there. I was wondering, Mark, if you could share with us in terms of how the SaaS business is performing, if you could look out next year. I mean, you had tougher comps in the fiscal year that just ended, right, as the anniversary of NetSuite went on. When you think about the type of acceleration we could see, can you walk us through kind of the puts and takes in terms of the types of acceleration we might be able to see in that business? And also, I wanted to ask you -- I mean, SAP is going through where they're trying to get customers to replatform, how much of an opportunity is that for you to go and potentially win back some of those customers or to win some of those customers for the first time? So wondering kind of the competitive environment, I guess, between Workday and SAP and how you're seeing that play out, given some of the announcements from SAP?
Mark Hurd--Chief Executive Officer
Okay. Well, that question would take me like an hour to get to.
Lawrence J. Ellison--Chairman of the Board and Chief Technology Officer
(Inaudible)
Heather Bellini--Goldman Sachs -- Analyst
It's pretty abridged (Multiple Speakers) abridged version.
Mark Hurd--Chief Executive Officer
The abridged version. I think to your point, SAP has foreseen all their customers through a new platform by 20 -- beginning of 2025 that forces all their customers to move and all the changes -- not just the changes they've just made, but all the changes they've made to the code has to be remade to the code. And what that means is they have to roll up a big new bill to move to this thing Larry called earlier HANA. And it's a big damn bill. And so the poor CIO or CFO or whoever this guy is has to show up to the Board and says to the Board of Directors, we got a $500 million bill to move to HANA. And you all on the phone are smart. My guess is the Board member says something clever like, what's HANA? And then guy goes, well, it's a platform. And the guy goes, well, what's a platform? And he goes, well, it's a new thing we run our ERP on. The guy goes, OK, and it costs $500 million. The guys goes, yeah. And he goes, what do we get for it? And he goes, well, we get some new plumbing and we get some new this. I just think that meeting goes very badly. And somewhere in the mean, the customer goes, who else have you talked to? Do we have an alternative? Could we not do it? Could we go with somebody else? So yeah, I mean, I think it's a incredibly interesting strategy on their part to put all their customers at play. Do we get calls from customers that we haven't been called or talked to in 20 years? The answer is yes. And is it because -- and remember, Heather, you know this that when we sold to customers 15 years ago, they never really talked SAP after that and vice versa because you're expected to stay with these ERP systems forever. So, yeah, some percent of their base will move as a result of just this because it's a lot of money for not getting much, real simple. In the rest of the...
Heather Bellini--Goldman Sachs -- Analyst
Anything on Workday? Yeah.
Mark Hurd--Chief Executive Officer
I think Workday does -- again, my sense of Workday is they do a decent job in upmarket HCM, where they can divorce the HCM buyer from the ERP buyer. When the ERP buyer and the HCM buyer are aligned and combined, they're really in a position with no chance because they don't have much of a financials product. And I know they hype it and they talk about it and all that. But at the end of the day, they're just not competitive. So for us, the market really is for us to keep moving ahead. So I don't know what our market share must be in cloud financials now, but it must be plus 90%, 92%, 93%, 94%. So yeah, do I think we can accelerate? I think the greatest story you can see here is the NetSuite story that we doubled the rate. And if I didn't say enough things about NetSuite because I'm sure the NetSuite team is listening. Let me say, NetSuite, NetSuite, NetSuite, they have just done a fabulous job and they're doing a fabulous job not just growing internationally, but growing domestically. I mean, a lot of this performance in NetSuite is just pure US domestic performance, more sales people, more industries, micro industries that we've built for better execution. And so between NetSuite and Fusion, we've just had a really good run. I won't tell you everything is perfect, which is what's really good news. With these numbers, we can do better. We can do better. And I think we're just getting our stride. So I feel very good about it, Heather.
Safra A. Catz--Chief Executive Officer
Thank you. And if Fusion becomes a higher percentage, Fusion ERP is growing so quickly and is -- it becomes a bigger percentage, it just kind of overwhelms everything else.
Lawrence J. Ellison--Chairman of the Board and Chief Technology Officer
Yeah, that's the mix change. I mean, that's what you're seeing really in this quarter. It is the beginning of the fact that our hot rapidly growing products are now bigger than some of those products, again, like Sun SPARC that are in decline. And we kind crossed -- those two curves have crossed one another. Yeah, Fusion is in a bunch more -- obviously, Fusion is an international product in a lot of countries. And now we've move NetSuite to a lot of countries. And quite frankly, we haven't really started to get the benefit of that just yet. So that's going to kick in this fiscal year and that will have a big impact.
Heather Bellini--Goldman Sachs -- Analyst
Great. Thank you.
Ken Bond--Senior Vice President, Investor Relations
Next question, please.
Operator
Our next question is going to come from the line of Phil Winslow, Wells Fargo.
Phil Winslow--Wells Fargo -- Analyst
Yeah, thanks for taking my question and congrats on a great finish to the year. A lot of time has been spent on platform and for spend in applications. I want to focus on infrastructure and hoping you can give us an update on just what you're seeing on the Oracle Cloud Infrastructure 2? What's the feedback from customers? How do we think about sort of where we are on the adoption lifecycle? And then one question I get from investors is, how should we think about OCI 2 relative to the announcement with Microsoft, if there's any sort of impact there?
Lawrence J. Ellison--Chairman of the Board and Chief Technology Officer
Well, OCI 2, we have two infrastructure products. We have, what we now call OCI Classic, which really is frozen and we've moved -- we're moving all of our customers -- almost moved all of our customers to our Gen2 Cloud. Our Gen2 Cloud is dramatically better. I think not only than our Gen1 Cloud, but other people's existing clouds. We have, without going into a lot on this, we have an architecture where we have two separate computers and each computer that you rent, if you will. And we have the Intel computer that you rent and then we have another processor with separate memory that has all of our cloud control code. So that's very different than Amazon or Google or Azure as an architecture. That's true of every single computer in our Gen2 Cloud is really two computers. So one that the customer uses and the one -- and another one that we use to manage the cloud and encrypt the data and encapsulate the message -- messaging and virtualize the messaging and do all of that.
The -- it's impossible for a cloud customer to get at our code and hack it. And it's also impossible for our programmers to look at our customers' data. So we did this, we redid our architecture because we decided that existing architectures -- infrastructure architectures had just too many vulnerabilities. And so we bit the bullet, said OK, we're going to freeze OCI process, we're going to invest in Gen2 that gives us a -- this -- a much more secure, much more reliable platform and quite frankly a much faster -- it's also much faster. We are much faster in networking, I'm not going to go into all of that. But this is a huge differentiator between us and everybody else. And customers are beginning to see that, they're beginning to understand the architectural differences with -- a lot of the world security agencies are now coming to us and saying, hey, this looks really good, we are going to go with this, not Amazon or somebody else. The -- because of these architectural distinctions. Also, a bunch of people are running high performance workloads on our cloud, we have a much fancier network, we have RDMA capability built into our network that the other guys don't have. That's because we redid that -- we didn't have it in Gen1, we have in Gen2, allows us to run large machine learning workloads, rendering, simulations, all sorts of high performance computing way better than our competitors. So there are a bunch of applications we just do better and people are beginning to notice and they're beginning to move and buy.
Phil Winslow--Wells Fargo -- Analyst
Great, thanks.
Operator
And our final question for today comes from Raimo Lenschow, Barclays.
Raimo Lenschow--Barclays -- Analyst
Hey, thanks for taking my question. I wanted to go back to the NetSuite strength, Mark. And you talked already a lot about it in terms of geographic and going deep into the industry. But I just wanted to see, like how sustainable is that? So where are we in that innings in terms of going against certain countries or going against certain industries? Like, is that kind of the initial investment and it's coming through now and then we're done or are we on the beginning of a journey here? Thank you.
Mark Hurd--Chief Executive Officer
First, Raimo, I think one thing I'd add to Larry's Gen2 point is customers love Gen2. And it's got a great thing, it works really well. It's reliable, it scales, we're hiring people in our engineering group, continuing to expand. And so just to add to Phil's point, I mean, it is very well received by our sales force, our field and it's been fantastic. On NetSuite, yeah, we're just at the beginning. To Larry's point, we really haven't seen the acceleration internationally that we're seeing domestically. So we're adding salespeople internationally. We've done that. We've got some more to do. So there is growth there. We are adding more countries. There is more to do there and we are adding, what we call, suite success, which is where we take an industry -- not even an industry, a micro industry. So instead of taking retail, we would take retail book stores and campus bookstores in universities and we would refine the solution for campus book stores and then put a consulting offer around it that we would deliver, so it's a complete one-stop-shop for the customer and we're continuing to build those out. So we've increased R&D yet again to do more of those, increased our sales force yet again to get after more customers and our expectation is that we continue to drive significant growth in NetSuite.
Raimo Lenschow--Barclays -- Analyst
Perfect. Thank you. Well done.
Safra A. Catz--Chief Executive Officer
(Multiple Speakers) for NetSuite. Okay.
Ken Bond--Senior Vice President, Investor Relations
Okay. Thank you, Mark. A telephonic replay of this conference call will be available for 24 hours. Dial-in information can be found on the press release issued earlier today. Please call the Investor Relations Department for any follow up questions from the call. We look forward to speaking with you. Thank you for joining today.
And with that, I'll turn the call back to Holly for closing.
Operator
Thank you. And thank you for joining today's Oracle fourth quarter 2019 earnings conference call. We appreciate your participation. You may now disconnect.
Duration: 54 minutes
Ken Bond--Senior Vice President, Investor Relations
Safra A. Catz--Chief Executive Officer
Mark Hurd--Chief Executive Officer
Lawrence J. Ellison--Chairman of the Board and Chief Technology Officer
Michael Turits--Raymond James -- Analyst
Mark Moerdler--Bernstein Research -- Analyst
Brad Zelnick--Credit Suisse -- Analyst
John DiFucci--Jefferies -- Analyst
Heather Bellini--Goldman Sachs -- Analyst
Heather Bellini--Goldman Sachs -- Analyst
Phil Winslow--Wells Fargo -- Analyst
Raimo Lenschow--Barclays -- Analyst
More ORCL analysis
All earnings call transcripts
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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see ourTerms and Conditionsfor additional details, including our Obligatory Capitalized Disclaimers of Liability.
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Did Changing Sentiment Drive Savosolar Oyj's (STO:SAVOS) Share Price Down A Disastrous 97%?
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While not a mind-blowing move, it is good to see that theSavosolar Oyj(STO:SAVOS) share price has gained 26% in the last three months. But the last three years have seen a terrible decline. Indeed, the share price is down a whopping 97% in the last three years. So it's about time shareholders saw some gains. The thing to think about is whether the business has really turned around.
We really feel for shareholders in this scenario. It's a good reminder of the importance of diversification, and it's worth keeping in mind there's more to life than money, anyway.
View our latest analysis for Savosolar Oyj
With just €5,428,164 worth of revenue in twelve months, we don't think the market considers Savosolar Oyj to have proven its business plan. We can't help wondering why it's publicly listed so early in its journey. Are venture capitalists not interested? So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). It seems likely some shareholders believe that Savosolar Oyj will significantly advance the business plan before too long.
We think companies that have neither significant revenues nor profits are pretty high risk. There is usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets. So the share price itself impacts the value of the shares (as it determines the cost of capital). While some companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing. Some Savosolar Oyj investors have already had a taste of the bitterness stocks like this can leave in the mouth.
Our data indicates that Savosolar Oyj had €4,070,559 more in total liabilities than it had cash, when it last reported in December 2018. That makes it extremely high risk, in our view. But since the share price has dived -68% per year, over 3 years, it looks like some investors think it's time to abandon ship, so to speak. You can see in the image below, how Savosolar Oyj's cash levels have changed over time (click to see the values).
Of course, the truth is that it is hard to value companies without much revenue or profit. What if insiders are ditching the stock hand over fist? I would feel more nervous about the company if that were so. It only takes a moment for you tocheck whether we have identified any insider sales recently.
We've already covered Savosolar Oyj's share price action, but we should also mention its total shareholder return (TSR). The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Savosolar Oyj hasn't been paying dividends, but its TSR of -90% exceeds its share price return of -97%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.
Over the last year, Savosolar Oyj shareholders took a loss of 61%. In contrast the market gained about 9.5%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. The three-year loss of 54% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. Although Warren Buffett famously said he likes to 'buy when there is blood on the streets', he also focusses on high quality stocks with solid prospects. You might want to assessthis data-rich visualizationof its earnings, revenue and cash flow.
If you are like me, then you willnotwant to miss thisfreelist of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on SE exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
If You Had Bought Global Dominion Access (BME:DOM) Shares Three Years Ago You'd Have Made 72%
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One simple way to benefit from the stock market is to buy an index fund. But if you choose individual stocks with prowess, you can make superior returns. For example,Global Dominion Access, S.A.(BME:DOM) shareholders have seen the share price rise 72% over three years, well in excess of the market return (9.3%, not including dividends).
See our latest analysis for Global Dominion Access
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During three years of share price growth, Global Dominion Access achieved compound earnings per share growth of 5.8% per year. This EPS growth is lower than the 20% average annual increase in the share price. This suggests that, as the business progressed over the last few years, it gained the confidence of market participants. It's not unusual to see the market 're-rate' a stock, after a few years of growth.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. Before buying or selling a stock, we always recommend a close examination ofhistoric growth trends, available here..
Global Dominion Access shareholders are down 12% for the year, falling short of the market return. The market shed around 1.6%, no doubt weighing on the stock price. Investors are up over three years, booking 20% per year, much better than the more recent returns. The recent sell-off could be an opportunity if the business remains sound, so it may be worth checking the fundamental data for signs of a long-term growth trend. If you want to research this stock further, the data on insider buying is an obvious place to start. You canclick here to see who has been buying shares - and the price they paid.
If you like to buy stocks alongside management, then you might just love thisfreelist of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on ES exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
San Diego Out Of State Movers Interstate & Long Distance Services Announced
An out of state moving service has been announced by GPS Moving and Storage, contactable on: (888) 896-2086. The San Diego based company provides their customers with expert packing, moving and storage services
SAN DIEGO, CA / ACCESSWIRE / June 20, 2019 /GPS Moving and Storage have announced that they offer out of state moving services to their customers in Southern California. The San Diego based company provide a full range of moving services including packing, storage and corporate office relocation.
For more information, please visit the website here:https://gpsmoving.com
GPS Moving and Storage is a locally owned and operated moving company with over two decades of experience in their field. They were began by an alliance of movers who wanted to increase industry standards and offer their customers integrity, honesty, and diligence and award-winning customer service.
One of the services that they specialize in is long distance, out-of-state moving. Their door-to-door service offers their customer's a smooth transition from one home to another and can move them across the entire country without them having to lift a finger.
As a full service moving company they provide an experienced team to carefully pack up the customer's entire household using the correct packaging and padding materials. They then make sure that all items are either stored or transported with care.
They explain that after arrival at the customer's new home, their cross country movers will reassemble and place the furniture according to the customer's wishes. In accordance with their unparalleled customer service they can also help to suggest where to place furniture if undecided.
The company understands that house moves are not always simple and that their customers may require storage services during the course of their move. Their GPS Storage San Diego location offers a range of storage options to meet those needs.
They offer sealed palette vaults to protect items from dust, damage and loss at their clean, well-lit and climate controlled facility. They provide their storage service on a convenient monthly basis and cross-country customers are eligible for their first month of storage for free.
Those wishing to find out more about GPS Moving and Storage can visit the website on the link provided above. Alternatively, they can also be contacted on: (888) 896-2086.
Contact Info:
Name: TammyEmail:Send EmailOrganization: GPS Moving and StorageAddress: 8595 Avenida Costa Sur #A, San Diego, California 92154, United StatesPhone: +1-888-896-2086Website:https://gpsmoving.com/
SOURCE:GPS Moving and Storage
View source version on accesswire.com:https://www.accesswire.com/549330/San-Diego-Out-Of-State-Movers-Interstate-Long-Distance-Services-Announced |
Understanding Hotel Giant IHG
InterContinental Hotels Group, based in Denham, England, is one of the largest hotel groups in the world by number of rooms, along with competitors like Marriott and Accor. It has about 5,656 hotels globally — 842,759 rooms — mostly in the U.S. The vast majority of its hotels are franchises.
Keith Barr took over as CEO nearly two years ago, replacing former CEO Richard Solomons.He leads the company along withchief financial officer Paul Edgecliffe-Johnson and chief marketing officer Claire Bennett, plus regional CEOs for the Americas; Europe, the Middle East, and Africa; and Greater China.
There are 17 IHG brands overall, spanning from midscale to luxury. The midscale Holiday Inn Express is by far its biggest,making up nearly half of its hotels worldwide. MeanwhileInterContinental Hotels & Resortsis its largest luxury brand with a total of 204 hotels, andCrowne Plazaits largest upscale brand, with a total of 427 hotels.
For years the IHG Rewards Club was the largest in the world in terms of members — but Marriott’s surpassed it in 2018,after it merged with Starwood Preferred Guest (SPG). The program currently hasover 100 million membersand offers four levels, where guests can redeem points for free nights in certain hotels. It was first launched in 1946, making it the very first hotel rewards plan.
The hospitality group has a confusing history, tracing itself back to an 18th-century British brewing company, Bass brewery, which slowly evolved into a hotel company.
In 1969 the brewery launched the Crest Hotel chain, its first step into the hotel industry, and continued to invest in hotels over the next few decades. Eventually Bass acquired Holiday Inn International from shareholders, and in 1998, it bought InterContinental hotels from a Japanese conglomerate. A couple years later, it sold its brewing business and changed its name to Six Continents.
In 2003 Six Continents split into two businesses: InterContinental Hotels Group, focused on hotels; and Mitchells & Butlers, focused on restaurants and soft drinks.
British businessmanAndy Cossletttook over as one of the first CEOs of the new company, in 2005. He launched boutique hotel brand Hotel Indigo, and in 2007, he oversawa four-year, billion dollar relaunch of the Holiday Inn and Holiday Inn Express brands.
UnderRichard Solomonsthe company began to shift to a majority-franchise model. However by the time Solomons stepped down, the hotel group had been overtaken as the largest by number of rooms by Marriott, andSolomons was criticized for not responding quickly enough to digital trends, such as Airbnb.
The company began to give cash to investors rather than make further deals to expand the business. In June 2017 former chief commercial officer of IHG Keith Barr became CEO.
Since his appointment,Barr has focused on cutting costs and investing in technology, including a new reservations system,IHG Concerto, and a new property management system. The $125 million in cost-cutting measures mainly came from layoffs.
Earlier this year, the company bought Six Senses, a wellness luxury brand, andlast year bought stake in luxury hotel brand Regent Hotels, growing its footprint in the luxury market. Also under Barr, the company has launched a few new brands, includingmidscale brand Avidand upscale brandVoco Hotels.
But the company acknowledges that acquiring too many brands too fast could lead tobrand bloat, diluting the unique character of each new acquisition or creation. IHG has a history of scaling fast, as it did with Holiday Inn Express and InterContinental.
The company is trying tokeep up with competitors, such as Marriott and Accor, as well as with newer ones, such asAirbnb.
Previously Barr was CEO of the greater China region, where the company is currently trying to grow its footprint. By 2009 the company had 100 hotels in the region, growing to 200 by 2013. Now there are nearly 400 IHG hotels in China, and the company aims to keep growing in the region.
In 2016the company suffered another data breach, leaving guest credit card information vulnerable to hackers. The hotel group said the breach only affected 12 properties, but it was soon revealed that it had expanded to at least 1,000. This caused concerns over cybersecurity at the hotel company, something it will have to continue to keep an eye on.
Barr’s plan is to grow the company quickly, especially in China, and to continue to invest heavily in digital data technology.
In February, at an investor summit in Los Angeles, Barr said he wanted to grow IHG “by either launching new brands, acquiring brands, taking new brands to new markets, and also repositioning our existing brands and innovating.”
Recently IHG has focused on buying luxury brands, but it is not stopping there. In 2021,it plans to open an all-suite, upper-midscale brand, Atwell Suites.
As for technology, the company plans to expand IHG Connect from simply Wi-Fi into a complete platform that can offer a full digital guest experience. Meanwhile it’s continuing to develop IHG Concerta, its new reservation management system fromAmadeus, in order to shift rates based on consumer demand, with the goal of maximizing revenue.
Along with continuing to grow in China, the group wants to expand further in other markets as well, particularly the Middle East and Vietnam.
Marriott InternationalIts acquisition ofStarwood Hotelsin 2016 helped it become the largest hotel group worldwide by number of rooms. Plus, aftermerging the two loyalty plans, it has the largest rewards program as well.
Wyndham Hotels & ResortsThe second largest hotel chain in the world, even after its spin-off from Wyndham Worldwide. It has 9,000 hotels globally, spanning 20 different brands.
Hilton InternationalHilton has been doing well recently, investing in new areas, like itsLyft partnership,flexible meeting spaces, andhostel-inspired brand Motto. It is similar to IHG in terms of size.
AccorBased in France, Accor is the largest hotel group in Europe. Plus it’s been making a bunch of acquisitions recently, includingTribein March, and plans to invest further in the co-working space.
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Labour attack new government late payments scheme as not going far enough
Kelly Tolhurst MP, Conservative minister for small business. Photo: Gareth Fuller/PA Archive/PA Images Labour has decried the scandal of late payments from large firms to small businesses , as the government pledges to take further action on the matter. Small business minister Kelly Tolhurst announced changes which give powers to the small business commissioner to issue fines to firms who pay late, hoping to hold company boards accountable for supply chain payment practices. Large businesses found to have unfair practices are also set to have binding payment plans imposed. Speaking on the changes, Tolhurst said: “Small businesses are the backbone of our economy and through our modern industrial strategy we want to ensure the UK is the best place to start and grow a business. These measures will ensure that small businesses are given the support they need and ensure that they get paid quickly - ending the unacceptable culture of late payment.” Responding to the announcement, Labour’s Shadow small business minister Bill Esterson told Yahoo Finance UK: “It is scandalous that some large firms use late payment to help their own cash flow at the expense of their smaller suppliers. “Labour's plans for binding arbitration and fines for persistent late payment and payment in 30 days as a pre-condition for bidding for public contracts would give small businesses the support they need. “The government's apparent conversion to the cause of tackling late payment is welcome but they will need to give the small business commissioner far greater power and resources if they are serious about taking the necessary action.” Labour outlined their alternate pledge for late payments in their 2017 manifesto, and look set to keep the policy. Meanwhile, the Association of Independent Professionals and the Self-Employed (IPSE) have cautiously welcomed the Government’s approach. IPSE’s deputy director of policy Andy Chamberlain commented: “The late payment culture that so many big businesses get away with needs to change. For the two thirds of self-employed people who experience it, late payment means no income, empty bank accounts, debt and possibly destitution. Today’s announcement is a welcome step in the right direction.” |
Less is more? Inditex cuts stores but boosts space in home market Spain
By Sonya Dowsett
MADRID (Reuters) - The list of retail casualties shutting up shop seems to grow by the month but Inditex, the world's largest clothing retailer, is still betting on its network of physical stores to drive growth.
The Zara owner has shrunk its network in its home market of Spain - by far its biggest portfolio globally - by 297 stores, or 15%, since 2012. Shutdowns have led some investors and analysts to worry about slowing sales growth at a company whose business has been built on a rapidly expanding store network.
However, despite the store closures, the company has actually increased its overall selling space in Spain since 2012 by opening or expanding flagship outlets in prime locations, according to a source with knowledge of the matter.
Inditex's net retail space in Spain also increased in the last financial year on an annual basis, said the source who declined to be named because the figures are confidential.
No store staff have been cut due to the closures, with employees instead reassigned to other outlets, according to company and union officials.
Inditex's strategy of expanding net space could be risky at a time when shoppers are increasingly chasing bargains online, industry profit margins are declining and Amazon has become the biggest seller of clothing in the United States and Britain.
The retailer is bucking the trend in an industry where companies are shrinking their real estate portfolios, either by shutting shops or reducing store sizes.
U.S. firm Gap Inc said earlier this year it would close 230 of its namesake brand's stores, the latest in a string of apparel retailers from Victoria's Secret to New Look that have shut stores without expanding net space.
Meanwhile, Abercrombie & Fitch, Target and Sephora are experimenting with slimmed-down stores in neighbourhood locations.
The success or failure of Inditex's plan could help determine whether combining online sales with a large store network can prevail in mass-market fashion, where blazers sell for under 30 euros ($35) and midi dresses for under 50 euros.
"Consumers are changing shopping habits. Instead of shopping in secondary locations they're shopping online but they're still valuing the super-prime flagship stores," said Alistair Wittet, European equities portfolio manager at Comgest, a top 20 Inditex investor according to Refinitiv data.
"That's the thinking behind the Inditex strategy - to close the secondary stores and enlarge and improve their flagship stores."
In Bilbao, for example, Zara opened a three-storey store last year in a historic building in the centre of town - complete with chandeliers, marble columns and stained-glass windows - while shutting three smaller stores in the city.
Inditex, whose executives are famously tight-lipped and rarely grant interviews, declined to officially comment on whether it had expanded retail space in Spain.
FALLING MARGINS
Inditex has nearly 7,500 stores globally, over a quarter of which are fast-fashion leader Zara, with its other brands including Bershka, Stradivarius and Pull & Bear. That is almost twice as many as both Gap Inc and Uniqlo owner, Japan's Fast Retailing, and around 2,500 more than Sweden's H&M.
Spain has by far its largest network, with more than 1,600 outlets, and accounts for about a sixth of group sales, but the reduction in store numbers is not limited to its home market.
Last year, for the first time, Inditex shut more outlets than it opened in China - its biggest network outside Spain.
Globally, though, Inditex is still increasing overall store numbers - but the rate is slowing and the company surprised investors in March when it said it had shut more stores than expected in the last financial year.
It said it had planned to open 300 to 400 stores, and close 200; but ended up opening 370 and closing 355.
"For us, the quality of the space is as important as the growth rate," Capital Markets Director Marcos Lopez said at the time. In the same month, Zara opened a large two-storey New York store in the upscale Hudson Yards development in Manhattan.
Globally, net retail space grew 4.7% in the last financial year. This year, the company expects growth of around 4%.
The accelerated closure of stores added to concerns that Inditex has lost some of its sparkle as it faces increased competition and falling margins.
Inditex's operating margins have fallen in each of the past six years, from 19.5% in 2013 to 16.7% last year, Refinitiv data shows. The figure, which has been hit by the effects of a strong euro, is still far above many of its competitors.
Year-on-year sales growth last year was the retailer's lowest since its 2001 listing. However it has more than doubled sales over the past decade and its 7% sales growth in local currencies last year compared favourably to rivals such as H&M, which booked 3% growth.
"They're certainly more mature than they were five years ago, so space growth is going to be at a lower level," said fund manager Ramiz Chelat of Vontobel Asset Management, which holds Inditex stock. "But 7% revenue growth in a difficult retail environment is actually very attractive."
(Additional reporting by Helen Reid in London; Editing by Pravin Char) |
COLUMN-Australian resource companies are becoming renewable energy believers: Russell
(The opinions expressed here are those of the author, a columnist for Reuters.)
By Clyde Russell
LAUNCESTON, Australia, June 20 (Reuters) - It's not quite yet a flood but Australian resource companies are increasingly embracing renewable energies into their mining and natural gas operations even in the face of a federal government that veers toward climate scepticism.
Among recent developments are moves by Rio Tinto to convert its iron ore trains to hybrid power, the commissioning of a solar power plant at an oil and gas facility operated by Santos in South Australia state, and battery storage being integrated into ConocoPhillips' liquefied natural gas (LNG) plant in Darwin.
There are several other projects being undertaken or in place already, and it seems that momentum is growing among companies to look at ways of reducing the use of fossil fuels in mining and oil and gas operations.
The shift is significant given Australia is the world's largest exporter of iron ore and LNG, and vies with Indonesia as the world's biggest supplier of coal to the seaborne market.
Resource companies have been criticised by some environmentalists for not being proactive in meeting the challenges posed by climate change, and recent comments by several chief executives show an increasing awareness that maintaining public support is going to be dependent on doing more to be a responsible corporate citizen.
Cynics may suggest that resource companies are doing too little too late, and what they are doing is geared more toward public relations, with an element of cost-saving flung in for good measure.
However, this doesn't take into account that major corporations tend to be slow-moving beasts and it takes time to shift thinking, develop plans and get approval from company boards.
What appears to be happening is that resource companies are looking at ways of achieving three goals, which happen to be compatible.
Firstly, renewable energy technologies will only appear in mining and oil and gas operations if they make economic sense.
With solar panels, batteries and other technologies dropping in price as they become more widespread, it becomes feasible to look at switching, especially for many of Australia's remote mining and natural gas operations, which currently rely on expensive diesel for much of their power.
Secondly, while Australian resource producers currently don't face a price on carbon, the executives can read the tea leaves and probably believe a price is inevitable in the future.
The conservative Liberal-National coalition won a surprise federal election in May, edging out the opposition Labor Party, which had been favoured in opinion polls leading up to the vote.
The Coalition is currently opposed to carbon pricing, while Labor is largely in favour, a situation that in effect means ongoing uncertainty for energy and climate policy.
Companies loathe this uncertainty, but a pragmatic board will realise that the Coalition is unlikely to rule forever, and may lose office at the next election, due in 2022.
Preparing for a price on carbon emissions thus becomes a sensible policy.
WINNING HEARTS AND MINDS
The third goal is public relations, with industry leaders repeatedly saying at recent conferences that they need to tell the positive stories about mining and oil and gas, and combat the more extreme views of some environmentalists who want an end to all minerals extraction.
If the companies can get the greening of their operations correct, not only can they save money, but they can also spin a positive narrative that makes them seem part of the solution to climate change, rather than part of the problem.
There is another market consideration from switching more of the running of mining and oil and gas operations to renewable power, albeit currently only a small factor.
Increased renewable power means lower consumption of diesel in particular, if trains, trucks and power generators can be fully or partially switched over.
The other factor is that some of the projects involving renewables are designed to replace the use of natural gas to power operations, such as at ConocoPhillips' Darwin LNG plant.
In theory this should make more gas available for processing, which could either boost the volumes produced or lower the cost of production. (Editing by Christian Schmollinger) |
Australia's central bank flags rate cut, market bets on July
By Wayne Cole
ADELAIDE (Reuters) - Australia's top central banker on Thursday said a recent cut in interest rates would not be enough to revive economic growth, an unusually blunt declaration that led markets to narrow the odds on another easing as early as July.
Reserve Bank of Australia (RBA) Governor Philip Lowe said it was "unrealistic" to think that the single quarter-point cut in rates to 1.25% would work on its own and called for the government for more action on fiscal stimulus.
"The most recent data – including the GDP (gross domestic product) and labour market data – do not suggest we are making any inroads into the economy's spare capacity," said Lowe in a marked shift from his normally optimistic tone.
Annual growth in the economy slowed to a decade low of 1.8% in the March quarter while the jobless rate has ticked up to 5.2% from a low of 4.9% in February. Inflation and wages growth have also been more subdued than the bank previously expected.
Lowe said Australia could, and should, push unemployment down to 4.5% and easing policy would help deliver that goal.
Investors reacted by sharply lifting the probability of a July rate cut to 76% <0#YIB;>, from less than 50% before Lowe's speech. The RBA's next policy meeting is on July 2.
A move to 1% is more than fully priced by August, and yet a further easing to 0.75% by Christmas.
"Lowe's comments signal that another cash rate cut is imminent," said Kristina Clifton, a senior economist at CBA. "We now expect the next 25 basis point cut to be delivered in July rather than August."
The RBA is hardly alone in easing, with both the U.S. Federal Reserve and the European Central Bank this week reversing course and opening the door to new stimulus.
That shift took a toll on the U.S. dollar and euro, and even helped the Australian dollar edge up from five-month lows. The Aussie was last up 0.1% at $0.6890.
BORROW TO INVEST, PLEASE
Lowe also repeated a call for government action, including by borrowing to invest in new infrastructure. He argued that with 10-year bond yields at a record low of 1.3%, there had to be infrastructure projects that would generate a higher return for the nation.
Traditionally the RBA avoids commenting on fiscal policy, so Lowe's very public pleas for help have been taken as a sign of his urgency.
So far, however, the newly re-elected conservative government of Prime Minister Scott Morrison has played down the need for fiscal stimulus and remains committed to returning the budget to surplus in 2019/20.
The surplus was a major plank of its surprise election win and will be politically hard to relinquish. The ruling Liberal National coalition has long been wedded to small government and spent the past decade demonising high public debt.
Some analysts suspected the government's stance would eventually change.
"We expect the Government will respond to the Bank’s call with additional fiscal stimulus later this year, once the weaker economy overrides the political objective of achieving a budget surplus," said NAB group chief economist Alan Oster.
Such stimulus could include bringing forward planned tax cuts, cash handouts and increased near-term infrastructure spending, said Oster.
NAB also joined CBA in shifting to July for the next rate cut, from August previously.
(Reporting by Wayne Cole; Editing by Shri Navaratnam and Sam Holmes) |
Could Mainova AG (FRA:MNV6) Have The Makings Of Another Dividend Aristocrat?
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Dividend paying stocks like Mainova AG (FRA:MNV6) tend to be popular with investors, and for good reason - some research suggests a significant amount of all stock market returns come from reinvested dividends. Yet sometimes, investors buy a popular dividend stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations.
With a 2.8% yield and a nine-year payment history, investors probably think Mainova looks like a reliable dividend stock. While the yield may not look too great, the relatively long payment history is interesting. Some simple research can reduce the risk of buying Mainova for its dividend - read on to learn more.
Explore this interactive chart for our latest analysis on Mainova!
Dividends are usually paid out of company earnings. If a company is paying more than it earns, then the dividend might become unsustainable - hardly an ideal situation. Comparing dividend payments to a company's net profit after tax is a simple way of reality-checking whether a dividend is sustainable. In the last year, Mainova paid out 35% of its profit as dividends. This is a middling range that strikes a nice balance between paying dividends to shareholders, and retaining enough earnings to invest in future growth. Besides, if reinvestment opportunities dry up, the company has room to increase the dividend.
Another important check we do is to see if the free cash flow generated is sufficient to pay the dividend. The company paid out 70% of its free cash flow, which is not bad per se, but does start to limit the amount of cash Mainova has available to meet other needs. It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
As Mainova has a meaningful amount of debt, we need to check its balance sheet to see if the company might have debt risks. A rough way to check this is with these two simple ratios: a) net debt divided by EBITDA (earnings before interest, tax, depreciation and amortisation), and b) net interest cover. Net debt to EBITDA is a measure of a company's total debt. Net interest cover measures the ability to meet interest payments on debt. Essentially we check that a) a company does not have too much debt, and b) that it can afford to pay the interest. With net debt of above 3x EBITDA, investors are starting to take on a meaningful amount of risk, should the business enter a downturn.
Net interest cover can be calculated by dividing earnings before interest and tax (EBIT) by the company's net interest expense. With EBIT of 4.30 times its interest expense, Mainova's interest cover is starting to look a bit thin.
Remember, you can always get a snapshot of Mainova's latest financial position,by checking our visualisation of its financial health.
Before buying a stock for its income, we want to see if the dividends have been stable in the past, and if the company has a track record of maintaining its dividend. Looking at the last decade of data, we can see that Mainova paid its first dividend at least nine years ago. The dividend has been quite stable over the past nine years, which is great to see - although we usually like to see the dividend maintained for a decade before giving it full marks, though. During the past nine-year period, the first annual payment was €9.48 in 2010, compared to €10.84 last year. This works out to be a compound annual growth rate (CAGR) of approximately 1.5% a year over that time.
Modest dividend growth is good to see, especially with the payments being relatively stable. However, the payment history is relatively short and we wouldn't want to rely on this dividend too much.
The other half of the dividend investing equation is evaluating whether earnings per share (EPS) are growing. Over the long term, dividends need to grow at or above the rate of inflation, in order to maintain the recipient's purchasing power. Earnings have grown at around 2.4% a year for the past five years, which is better than seeing them shrink! Mainova is paying out less than half of its earnings, which we like. Earnings per share growth have grown slowly, which is not great, but if the retained earnings can be reinvested effectively, future growth may be stronger.
When we look at a dividend stock, we need to form a judgement on whether the dividend will grow, if the company is able to maintain it in a wide range of economic circumstances, and if the dividend payout is sustainable. Firstly, we like that Mainova pays out a low fraction of earnings. It pays out a higher percentage of its cashflow, although this is within acceptable bounds. Unfortunately, earnings growth has also been mediocre, and we think it has not been paying dividends long enough to demonstrate resilience across economic cycles. In sum, we find it hard to get excited about Mainova from a dividend perspective. It's not that we think it's a bad business; just that there are other companies that perform better on these criteria.
You can also discover whether shareholders are aligned with insider interests bychecking our visualisation of insider shareholdings and trades in Mainova stock.
Looking for more high-yielding dividend ideas? Try ourcurated list of dividend stocks with a yield above 3%.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
'Human Fall Flat' lands on iOS and Android June 26th
Human Fall Flathas proven a big hit on consoles and PC, with more than five million copies sold by last February as players hopped into No Brakes Games' hilarity-filled world.It emerged back thenthat a mobile port was on the way, and now we know you'll be able to play it on Android and iOS starting June 26th.
InHuman Fall Flat,you take control of a malleable character named Bob, guiding him through a series of physics-based puzzles while his limbs wobble around. Online play adds to the chaos, as up to seven other players can join you to figure out how to traverse the platforms and/or just get in your way. |
MAXBURST Named to Agency Spotter’s 2019 Top 50 Digital Agencies Report
MAXBURST Web Deign, a NYC website design & digital marketing agency, has been recognized as one of the top 50 digital agencies by Agency Spotter
NEW YORK, NY / ACCESSWIRE / June 20, 2019 /MAXBURST, a leading Website Design & Digital Marketing Agency, has been recognized as one of the top 50 digital agencies by Agency Spotter. Featured for the first time, MAXBURST is ranked No. 7 by the Orlando, Florida, based digital research firm.
Agency Spotter's Top 50 Digital Agencies Report reviews digital agencies from around the globe who specialize in digital competencies such as digital strategy, marketing automation, web design and development, mobile design and development, social media marketing, e-commerce, email marketing, content marketing, inbound marketing, search (SEO and PPC), CRM automation, and gaming.
"I'm humbled by this tremendous recognition," said Andrew Ruditser, Co-founder and Lead Technology Coordinator atMAXBURST. "Our success is a clear reflection of the effort, pride, and passion our team members bring to the workplace every day. Our employees take immense pride in the work they put into each and every project."
Based in New York City, MAXBURST has a growing team of 36 employees and works diligently to provide businesses and not-for-profit organizations a wide range of design and development services that are all delivered using the latest and most advanced industry technologies.
"Our business is complex, and our industry is experiencing unprecedented growth," said Ruditser. "Having a dedicated and passionate team committed to making a difference is central to our success. We aspire to promote a culture of high-performance and create an environment that provides our team with the tools to grow and constantly improve."
Ruditser continues, "Our commitment to employee training and development has enabled us to stay on top of the competitive website design and marketing industry. We combine cutting-edge tools, data-driven decision making, and expert design, to create an entire digital experience that will elevate our client's brand."
It's this comprehensive approach that enables MAXBURST to conceive inspired and inventive online business models, brand-friendly websites, powerful direct response tactics and effective marketing strategies that create consistent growth for clients across a broad spectrum of industries.
Ruditser, however, refuses to take his agency's latest recognition for granted. "Past achievements and successes are something to celebrate and learn from, however, to stay relevant in today's competitive landscape there has to be a constant push and drive to innovate and deliver results."
Explains Ruditser, "Our clients have come to expect a certain standard of excellence when they team with MAXBURST. We strive to cultivate and maintain lasting client relationships which are built on a foundation of transparency, integrity, competence and proven results."
This year marks the 3rd anniversary of theAgency Spotter Top 50 Digital AgenciesReport, and the 2019 winners continue to show that a high-trust culture for all fuels better business results. Agency Spotter's research shows that the list of winners demonstrate strong internal leadership, data transparency and an unwavering commitment to both employee and client satisfaction.
About MAXBURST
MAXBURST is a leading NYC website design & digital marketing agency focused on delivering creative and results-driven solutions to businesses and not-for-profit organizations. Its team is comprised of some of the most knowledgeable marketers in the industry, including web developers, digital ad specialists, graphic designers, and strategists. MAXBURST aspires to build long-standing, collaborative partnerships with its clients to execute proven strategies and generate sustainable revenue growth. Please contact Andrew Ruditser at 888-9MAXWEB for more information.
Contact Info:
Name: Andrew RuditserEmail:Send EmailOrganization: MAXBURST, Inc.Address: 205 E 42nd St 20th floor, New York, NY 10017, United StatesPhone: +1-212-651-1879Website:https://www.maxburst.com
SOURCE:MAXBURST, Inc.
View source version on accesswire.com:https://www.accesswire.com/549331/MAXBURST-Named-to-Agency-Spotters-2019-Top-50-Digital-Agencies-Report |
PGS and TGS Announce Jeanne d'Arc HD3D in Offshore East Canada
June 19, 2019: Oslo, Norway,PGS and TGS announce the Jeanne d`Arc High Density 3D ("HD3D") MultiClient project in Offshore Newfoundland, East Canada.
The project will cover approximately 5,000 square kilometers and encompasses multiple exploration licenses, significant discovery licenses and sections of the open acreage included in the November 2019 bid round. TheRamform Atlaswill perform the acquisition, utilizing the high-resolution GeoStreamer® technology. Acquisition has commenced and is expected to complete in late Q3 2019.
The Jeanne d`Arc HD3D survey borders Newfoundland`s prominent producing fields such as Hibernia, Terra Nova, White Rose, North Amethyst and Hebron.
Following this ninth consecutive season of data acquisition in offshore East Canada, the jointly-owned library will have more than 189,000 line kilometers of 2D GeoStreamer data and approximately 56,000 square kilometers of 3D GeoStreamer data.
This project is supported by industry funding.
[{"FOR DETAILS, CONTACT:": "B\u00e5rd Stenberg, SVP IR & Corporate CommunicationsPhone: +47 67 51 43 16Mobile: +47 99 24 52 35"}]
***Petroleum Geo-Services ASA and its subsidiaries ("PGS" or "the Company") is a focused marine geophysical company that provides a broad range of seismic and reservoir services, including acquisition, imaging, interpretation, and field evaluation. The Company MultiClient data library is among the largest in the seismic industry, with modern 3D coverage in all significant offshore hydrocarbon provinces of the world. The Company operates on a worldwide basis with headquarters in Oslo, Norway and the PGS share is listed on the Oslo stock exchange (PGS.OL). For more information on PGS visitwww.pgs.com.
***
The information included herein contains certain forward-looking statements that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future. These statements are based on various assumptions made by the Company, which are beyond its control and are subject to certain additional risks and uncertainties. The Company is subject to a large number of risk factors including but not limited to the demand for seismic services, the demand for data from our MultiClient data library, the attractiveness of our technology, unpredictable changes in governmental regulations affecting our markets and extreme weather conditions. For a further description of other relevant risk factors we refer to our Annual Report for 2018. As a result of these and other risk factors, actual events and our actual results may differ materially from those indicated in or implied by such forward-looking statements. The reservation is also made that inaccuracies or mistakes may occur in the information given above about current status of the Company or its business. Any reliance on the information above is at the risk of the reader, and PGS disclaims any and all liability in this respect.
--END--
This information is subject to the disclosure requirements pursuant to section 5 -12 of the Norwegian Securities Trading Act.
This announcement is distributed by West Corporation on behalf of West Corporation clients.The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.Source: Petroleum Geo-Services ASA via GlobeNewswireHUG#2246276 |
What Betsson AB's (STO:BETS B) ROE Can Tell Us
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Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). We'll use ROE to examine Betsson AB (STO:BETS B), by way of a worked example.
Over the last twelve monthsBetsson has recorded a ROE of 23%. Another way to think of that is that for every SEK1 worth of equity in the company, it was able to earn SEK0.23.
See our latest analysis for Betsson
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Betsson:
23% = kr1.1b ÷ kr4.9b (Based on the trailing twelve months to March 2019.)
It's easy to understand the 'net profit' part of that equation, but 'shareholders' equity' requires further explanation. It is all earnings retained by the company, plus any capital paid in by shareholders. The easiest way to calculate shareholders' equity is to subtract the company's total liabilities from the total assets.
Return on Equity measures a company's profitability against the profit it has kept for the business (plus any capital injections). The 'return' is the profit over the last twelve months. A higher profit will lead to a higher ROE. So, as a general rule,a high ROE is a good thing. Clearly, then, one can use ROE to compare different companies.
One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. If you look at the image below, you can see Betsson has a similar ROE to the average in the Hospitality industry classification (22%).
That's not overly surprising. ROE can give us a view about company quality, but many investors also look to other factors, such as whether there are insiders buying shares. I will like Betsson better if I see some big insider buys. While we wait, check out thisfreelist of growing companies with considerable, recent, insider buying.
Most companies need money -- from somewhere -- to grow their profits. That cash can come from issuing shares, retained earnings, or debt. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. That will make the ROE look better than if no debt was used.
Betsson has a debt to equity ratio of 0.22, which is far from excessive. The combination of modest debt and a very impressive ROE does suggest that the business is high quality. Careful use of debt to boost returns is often very good for shareholders. However, it could reduce the company's ability to take advantage of future opportunities.
Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. A company that can achieve a high return on equity without debt could be considered a high quality business. All else being equal, a higher ROE is better.
But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So I think it may be worth checking thisfreereport on analyst forecasts for the company.
Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Exclusive: Deutsche Bank braced for continued Fed restrictions on U.S. business - sources
By Matt Scuffham
NEW YORK (Reuters) - Deutsche Bank AG executives expect U.S. regulators to continue to impose restrictions on its Wall Street investment bank even if it passes an annual health check, three sources familiar with the matter said.
Executives hope improvements the bank has made to its risk management and capital planning processes since failing last year's test will enable it to achieve a conditional pass this year, the sources said.
The sources said their optimism is based on conversations with Fed officials over several months. However, the Fed has yet to give a final decision and the bank's fourth failure in five years is still possible, they said.
A Deutsche Bank spokesperson said: "We cannot confirm any of the information as the results are not known to us. We respect the process, and we will respect the Federal Reserve's decision, when made."
The Federal Reserve implemented annual tests of lenders after the 2008 financial crisis to check whether they have sufficient capital to weather a major economic downturn.
Even if the bank passes the stress tests, executives expect the Fed to continue to bar it from making payments to its German parent without the Fed's approval, the sources said. They also anticipate Deutsche will be told to continue improving the systems it uses to monitor its business and risks, the sources said.
The tests this week and next come amid uncertainty over the bank's U.S. operations. Deutsche plans cutbacks to appease investors unhappy about its stock market underperformance. It also faces investigations by the Federal Bureau of Investigation and Department of Justice into possible money-laundering lapses. The bank has said it is cooperating with investigators.
Failing the tests would further damage confidence among clients and investors at a time when Chief Executive Officer Christian Sewing is battling to turn around Germany's biggest lender, whose shares hit a record low this month.
Deutsche flunked the second part of the tests last year. The Fed cited "material weaknesses" in its data capabilities and capital planning process. The bank said in April it had "invested heavily to ensure that the bank meets regulators' demands and has made significant progress."
Fed officials recognize the bank has made improvements to its processes but believe more work needs to be done to bring them up to the required standard, the sources said.
This year's tests are likely to be the last for Deutsche's U.S. business under current Americas head, Tom Patrick, the sources said. Patrick is expected to leave in the coming months as the bank's U.S. restructuring progresses, they said. Patrick declined to comment, bank officials said.
Deutsche plans to dramatically reduce the size of its loss-making U.S. equities business as part of an overhaul of its investment bank. However, it plans to retain a substantial U.S. operation to service German corporate clients.
A key task for Patrick's successor, who will need to be approved by the Fed, will be to rebuild confidence among regulators and ensure it can pass future stress tests unconditionally, the sources said.
The Fed is scheduled to announce on Friday the results of the first part of the tests, which measures banks' capital levels against a severe recession. Deutsche is expected to pass that section comfortably, as it did last year, the sources said.
The second part of the tests, which focuses on banks' capital planning and risk management processes, is due to be announced June 27. It is this part that bank officials hope they will conditionally pass this year, the sources said.
(Reporting by Matt Scuffham; editing by Neal Templin and Cynthia Osterman) |
Waymo to Study Driverless Services With Renault-Nissan Alliance
(Bloomberg) -- Waymo LLC agreed to explore driverless services with Renault SA, Nissan Motor Co. and Mitsubishi Motors Corp., pairing a leader in self-driving technology with the world’s largest automotive alliance.
The three carmakers and Alphabet Inc.’s autonomous-vehicle unit will study market opportunities and research legal and safety issues related to driverless transportation services in France and Japan, the companies said in a statement Thursday. The deal doesn’t extend to cooperation producing robo-vehicles.
“We’re convinced that with this added expertise, we’ll be able to position ourselves for autonomous services that are viable for customers,” Hadi Zablit, senior vice president for business development at the Renault-Nissan-Mitsubishi alliance, told reporters in Paris. When it comes to implementation, the three automakers won’t necessarily offer services in common with Waymo, he said.
The French-Japanese alliance produced more than 10 million vehicles last year — on a par with the biggest carmakers: Volkswagen AG and Toyota Motor Corp. Unlike Waymo’s previously announced deals with Fiat Chrysler Automobiles NV and Tata Motors Ltd.’s Jaguar Land Rover, the partnership with Renault-Nissan-Mitsubishi doesn’t include supplying any cars.
Waymo’s parent company, Alphabet, struck a separate deal with the three-way partnership last September, giving its Google Android operating system access to their vehicle dashboards starting in 2021.
The new agreement marks a first step toward developing long-term, profitable driverless-vehicle services for passengers and deliveries, the companies said. While the analysis will take place first in France and Japan, they said it may expand to other markets — excluding China — in the future.
Zablit sees deployment of the new mobility services in less than 10 years.
For Renault and Nissan, working with Waymo brings expertise as the race to develop autonomous vehicles heats up. It also shows the French and Japanese manufacturers continue to collaborate on key strategic matters, even after their two-decade partnership was shaken by the arrest in November of former leader Carlos Ghosn in Japan over alleged financial improprieties.
Tensions escalated after Renault pursued a combination with Fiat without initially telling its Japanese partners. Those merger talks have since ended.
To contact the reporter on this story: Ania Nussbaum in Paris at anussbaum5@bloomberg.net
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Frank Connelly, Chester Dawson
For more articles like this, please visit us atbloomberg.com
©2019 Bloomberg L.P. |
GC Aesthetics to Launch Two New Products
DUBLIN, IRELAND / ACCESSWIRE / June 20, 2019 /GC Aesthetics, Inc. (GCA), a privately-held medical technology company providing aesthetic solutions for global healthcare markets, announced today that the Company will be launching two new products.
The first product,Eve 4.0, will be launched at the 39thPaulista Plastic Surgery Journey Conference that is taking place from June 19-22, 2019 in Sao Paulo, Brazil. Eve 4.0 is a proprietary Digital Consultation Solution (DCS) allowing augmented reality visualization that offers a unique experience for patients who are considering either breast augmentation or reconstruction. The Eve 4.0 uses the latest software technologies available to the medical technology industry to do a breast simulation, allowing physicians and their patients to see how they will look after surgery, thus reducing patient uncertainty and making breast surgery an easier decision between physician and patient. GCA can be found at Booth 46 at the 39th Paulista Plastic Surgery Journey Conference at the Hyatt Hotel convention center in Sao Paulo. On June 20 at 10:30 local time, a live demonstration of Eve 4.0 is planned to take place at the booth and will also be livestreamed on GCA's social media channels. Following the conference, Eve 4.0 will be rolled out in Europe and Brazil.
In parallel with the launch of Eve 4.0, GCA will also be launching theNoarecovery compression solutions in Europe. Noa is a FDA- approved, medical-grade compression solution that incorporates a patented 3D compression system. The healing process after procedures that cause trauma to the body has been shown to last on average 12 weeks, during which the body requires proper support to heal. The GCA Noa product family are easy to get on, are designed for comfort and healing immediately following surgery and have been shown to help reduce swelling and pain, to control moisture in order to prevent infection, and to allow the patient to move easily and to also sleep comfortably. The initial roll out of the Noa product will be in Germany, the United Kingdom, Spain, and Italy and progressively will be extended into additional geographies where GCA has a presence.
"As a global market leader with over 30 years of experience in medical aesthetics, GCA is passionate about moving the industry forward through innovation and extraordinary customer experiences," commented Carlos Reis Pinto, Chief Executive Officer at GC Aesthetics. "These products represent the evolution of GCA to expanding beyond being only an implant manufacturer and to becoming a true partner to our surgeon and their patients providing solutions throughout their journey."
About the 39thPaulista Plastic Surgery Journey Conference
The 39th Jornada Paulista will take place from June 19-22, 2019 in Sao Paulo, Brazil. It is the second most important event in Brazil organized by the Brazilian Society of Plastic Surgery of São Paulo. The Scientific Program is developed by well-recognized physicians in plastic surgery. It is estimated that over 1,200 plastic surgeons will attend the conference this year.
For more information:http://www.sbcp-sp.org.br/jp2019/jp2019-programacao-cientifica/
About GC Aesthetics
GC Aesthetics (GCA) is an established global medical technology company that develops, manufactures in-house and markets a comprehensive range of proprietary aesthetic products that empower patients to feel safe and confident on their personal journey. Through 30 years of commercial presence, GCA has been dedicated to advancing the science of medical aesthetics and delivering high-quality products under its premium Nagor and Eurosilicone brands, primarily for breast augmentation and breast reconstructive surgery. More than 3 million women and men across 70 countries have trusted GCA products, which are supported by published 10-year clinical data demonstrating compelling safety and clinical effectiveness. The Company's vertically-integrated strategy enables exceptional clinical, operational and commercial performance, which allows GCA to provide competitively differentiated products to physicians and patients. Through a culture of continuous innovation and dedication to customer-responsiveness, GCA has established itself as a leading provider of medical aesthetics solutions and the partner-of-choice for patients seeking to improve their lives.
Contacts:
GC Aesthetics
info@gcaesthetics.com
SOURCE:GC Aesthetics
View source version on accesswire.com:https://www.accesswire.com/549317/GC-Aesthetics-to-Launch-Two-New-Products |
What Should Investors Know About The Future Of Bloomsbury Publishing plc's (LON:BMY)?
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Looking at Bloomsbury Publishing plc's (LON:BMY) earnings update on 28 February 2019, analysts seem cautiously optimistic, with earnings expected to grow by 15% in the upcoming year relative to the past 5-year average growth rate of 2.6%. With trailing-twelve-month net income at current levels of UK£9.2m, we should see this rise to UK£11m in 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Bloomsbury Publishing in the longer term. Investors wanting to learn more about other aspects of the company shouldresearch its fundamentals here.
Check out our latest analysis for Bloomsbury Publishing
The 2 analysts covering BMY view its longer term outlook with a positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of BMY's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of 14% based on the most recent earnings level of UK£9.2m to the final forecast of UK£14m by 2022. EPS reaches £0.19 in the final year of forecast compared to the current £0.12 EPS today. Margins are currently sitting at 5.7%, which is expected to expand to 7.8% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Bloomsbury Publishing, there are three relevant factors you should look at:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is Bloomsbury Publishing worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether Bloomsbury Publishing is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of Bloomsbury Publishing? Exploreour interactive list of stocks with large growth potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Waymo teams up with Renault, Nissan on robotaxis outside US
SAN FRANCISCO (AP) — Self-driving car pioneer Waymo is teaming up with automakers Renault and Nissan to make its first journey outside the U.S. with a ride-hailing service that will dispatch a fleet of robotaxis in France and Japan. The partnership announced late Wednesday underscores Waymo's ambition to deploy its driverless technology throughout the world in an attempt to revolutionize the way people get around. The Mountain View, California, company can afford to try because it's backed by one of the world's richest companies, Google, which secretly began working on driverless technology a decade ago before spinning off that project into what is now known as Waymo. After launching its ride-hailing service in France and Japan, Waymo intends to explore other European and Asian markets with Renault and Nissan. "This is an ideal opportunity for Waymo to bring our autonomous technology to a global stage," Waymo CEO John Krafcik said. Waymo, Renault and Nissan didn't set a timetable for when their ride-hailing service will launch. They left most other details vague. It seems likely it will still be several years before Waymo will be in a position to pose a serious challenge to Uber, the world's largest ride-hailing service. Although Waymo's self-driving technology is widely considered to be the world's most advanced, it still isn't adept enough to be trusted without a human poised to take control in case something goes awry with the robot. Waymo had hoped to launch a fully autonomous ride-hailing service last year in the Phoenix area, but instead is still keeping human safety drivers in those vehicles more than six months after it rolled out. That service, known as Waymo One, is still only offering rides to a few hundred passengers that previously participated in a test program. Krafcik told the German newspaper Handelsblatt last year that Waymo will likely use a different brand for its ride-hailing services outside the U.S. That could be one reason Waymo is working with France-based Renault and Japan-based Nissan, household names in their home countries. Waymo has previously struck deals with two automakers, Fiat Chrysler and Jaguar, but those involved ordering tens of thousands of vehicles to be equipped with self-driving technology for services in the U.S. So far, Waymo is only using Fiat Chrysler minivans for its Phoenix service. The partnership with Renault and Nissan also involves a long-time alliance they formed with Mitsubishi. But the fate of that alliance has been in limbo since Carlos Ghosn, the former CEO of both Renault and Nissan, was arrested late last year on charges that included falsifying financial reports. |
GLOBAL MARKETS-Stocks rally, bond yields dive as Fed fuels easing hopes
* U.S. 10-year yield below 2%, gold hits near 6-year high
* Markets price in 75 bp Fed rate cuts by year-end in total
* BOJ stands pat, Fed stance seen prompting easing elsewhere
* European stocks seen 0.5% higher
By Hideyuki Sano
TOKYO, June 20 (Reuters) - Asian stock markets rallied on Thursday while the dollar dropped and global bond yields plunged, with the 10-year U.S. yield falling below two percent, after the Federal Reserve signalled possible interest rate cuts later this year.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.92%, led by gains in China, while Tokyo's Nikkei advanced 0.67%.
European stock futures point to gains of up to 0.5% for markets there.
The MSCI ACWI, which incorporates readings of 49 equity markets across the world, gained 0.33% on Thursday. It has recovered a large part of its 6.7% losses made after U.S. President Donald Trump threatened new tariffs on all of China's imports last month.
Signs that China and the United States are returning to the negotiating table after a six-week hiatus also bolstered risk sentiment.
The rally in stocks comes as a host of central banks in Asia and Europe are scheduled to hold policy meetings later in the day, with most expected to flag moves toward looser monetary settings.
The Bank of Japan kept monetary policy steady on Thursday, preferring to save its dwindling ammunition, but speculation is rising it may further loosen its ultra-easy stance later this year.
"As the Fed's policy is turning, central banks in many other countries will face pressure, including those from markets, to ease their policy," said Hiroshi Yokotani, portfolio strategist at State Street Global Advisors.
On Wall Street, the S&P 500 gained 0.30% to 2,926, just 19 points off its record closing high hit on April 30. Its futures rose another 0.42% in Asia on Thursday.
The U.S. Federal Reserve on Wednesday signalled interest rate cuts beginning as early as July, saying it is ready to battle growing global and domestic economic risks as it took stock of rising trade tensions and growing concerns about weak inflation.
The bulk of Fed policymakers slashed their rate outlook for the rest of the year by roughly half a percentage point, and Fed Chairman Jerome Powell said others agree the case for lower rates is building.
Many investors viewed the overall tone as more dovish than their expectations, sending the 10-year U.S. Treasuries yield to as low as 1.974%, its lowest level since November 2016. It was as high as 2.8% in January.
Japanese 10-year bond yields slipped 2.0 basis points to a three-year low of minus 0.160%, while the Australian yield hit a record low below 1.30%.
U.S. money market derivatives, such as Fed funds futures and overnight indexed swaps, are fully pricing in a rate cut of 25 basis points at the next policy review on July 30-31, with about one-third chance of a bigger 50 basis point cut.
A total of 75 basis points of easing is priced in by the end of year.
However, such aggressive rate cuts when the stock prices are so close to record peaks would be rare, if not unprecedented, suggesting market expectations of easings may have gone too far.
"It seems the Fed is getting ahead of risk and doing whatever it takes to avoid downside implications due to a potential slowdown," said Robin Anderson, senior global economist at Principal Global Investors in Des Moines, Iowa in the United States. "However, in the event inflation picks backs up, I'm apprehensive the Fed could be behind the curve if rates do in fact get cut too soon."
Many investors think rate cut expectations could be rolled back if Washington and Beijing make some headway in their talks.
"While we expect 'insurance' rate cuts this year, we think the timing and magnitude of any policy easing is uncertain and somewhat dependent on U.S.-China trade relations," said Andrew Wilson, CEO of Goldman Sachs Asset Management for EMEA and global Head of fixed income.
U.S. Trade Representative Robert Lighthizer said he will confer with his Chinese counterpart Vice Premier Liu He before next week's meeting between President Donald Trump and Chinese President Xi Jinping in Osaka.
The Chinese yuan has recovered over the past couple of days on hopes of U.S.-China talks next week on the sideline of the Group of 20 summit.
The offshore yuan rose 0.3% to at 6.8722 to the dollar , hitting a five-week high of 6.8677 at one point.
The euro rose 0.3% to $1.1265 after the Fed's dovish signals undermined the dollar's yield attraction.
The dollar fell 0.5% on the yen to hit a five-month low of 107.55 yen extending losses after the Bank of Japan stood pat on policy.
The British pound rebounded 0.35% to $1.2688 from Tuesday's 5-1/2-month low of $1.2507 as investors trimmed their short bets before the Bank of England's policy meeting on Thursday where it may strike a more hawkish tone than those of its peers.
Gold jumped above its long-held resistance around $1,350 per ounce to its highest level since September 2013, rising to as high as $1,392.3. It last stood at $1,381.00, up 1.56%.
Oil prices held firm, as official data showed U.S. crude stocks fell more than expected and as OPEC and other producers finally agreed a date for a meeting to discuss output cuts.
U.S. West Texas Intermediate (WTI) crude futures rose 1.5% to $54.57 a barrel.
Members of the Organization of the Petroleum Exporting Countries (OPEC) agreed to meet on July 1, followed by a meeting with non-OPEC allies on July 2, after weeks of wrangling over dates.
Oil producers will discuss whether to extend a deal on cutting 1.2 million barrels per day of production that runs out this month.
(Additional reporting by Tomo Uetake, Editing by Simon Cameron-Moore & Shri Navaratnam) |
Is Bunzl plc (LON:BNZL) A Financially Sound Company?
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Small and large cap stocks are widely popular for a variety of reasons, however, mid-cap companies such as Bunzl plc (LON:BNZL), with a market cap of UK£7.1b, often get neglected by retail investors. Despite this, the two other categories have lagged behind the risk-adjusted returns of commonly ignored mid-cap stocks. This article will examine BNZL’s financial liquidity and debt levels to get an idea of whether the company can deal with cyclical downturns and maintain funds to accommodate strategic spending for future growth. Remember this is a very top-level look that focuses exclusively on financial health, so I recommend a deeper analysisinto BNZL here.
Check out our latest analysis for Bunzl
BNZL has sustained its debt level by about UK£1.9b over the last 12 months which accounts for long term debt. At this constant level of debt, BNZL currently has UK£478m remaining in cash and short-term investments to keep the business going. Moreover, BNZL has produced UK£480m in operating cash flow over the same time period, resulting in an operating cash to total debt ratio of 26%, indicating that BNZL’s current level of operating cash is high enough to cover debt.
Looking at BNZL’s UK£2.1b in current liabilities, it seems that the business has been able to meet these obligations given the level of current assets of UK£3.0b, with a current ratio of 1.43x. The current ratio is the number you get when you divide current assets by current liabilities. For Trade Distributors companies, this ratio is within a sensible range since there is a bit of a cash buffer without leaving too much capital in a low-return environment.
BNZL is a highly-leveraged company with debt exceeding equity by over 100%. This is not uncommon for a mid-cap company given that debt tends to be lower-cost and at times, more accessible. No matter how high the company’s debt, if it can easily cover the interest payments, it’s considered to be efficient with its use of excess leverage. A company generating earnings after interest and tax at least three times its net interest payments is considered financially sound. In BNZL's case, the ratio of 9.35x suggests that interest is appropriately covered, which means that debtors may be willing to loan the company more money, giving BNZL ample headroom to grow its debt facilities.
Although BNZL’s debt level is towards the higher end of the spectrum, its cash flow coverage seems adequate to meet obligations which means its debt is being efficiently utilised. This may mean this is an optimal capital structure for the business, given that it is also meeting its short-term commitment. This is only a rough assessment of financial health, and I'm sure BNZL has company-specific issues impacting its capital structure decisions. I recommend you continue to research Bunzl to get a more holistic view of the mid-cap by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for BNZL’s future growth? Take a look at ourfree research report of analyst consensusfor BNZL’s outlook.
2. Valuation: What is BNZL worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether BNZL is currently mispriced by the market.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Renault, Nissan join Waymo in exploring driverless services in France, Japan
By Paul Lienert and Laurence Frost
DETROIT/PARIS (Reuters) - French automaker Renault SA, its Japanese partner Nissan Motor Co and tech giant Alphabet Inc's Waymo are exploring a partnership to develop and use self-driving vehicles to transport people and goods in France and Japan, the companies said on Thursday.
The proposed venture could also be expanded to other markets, the companies said.
If the partnership is realized, it will have ramifications for other alliances and other self-driving projects, most of which have yet to hit the road. Automakers across the world are re-thinking independent autonomous vehicle efforts, and instead looking for partners to share rising investment costs and regulatory risks.
In Japan, a potential competitor to a Renault-Nissan-Waymo venture would be Monet Technologies, a self-driving project involving Toyota Motor Corp and Honda Motor Co and backed by SoftBank Group Corp. SoftBank and Honda also have invested in General Motors Co's Cruise self-driving car unit.
The initial agreement among Waymo, Renault and Nissan aims to "develop a framework for deployment of mobility services at scale," according to Hadi Zablit, Renault-Nissan Alliance business development chief. Physical testing of vehicles and deployment of services would come in later phases.
The two automakers will set up 50-50 joint ventures in France and Japan to develop the driverless transportation services. Zablit said a later Waymo investment is "one of the options" under consideration.
With Waymo, they will also research commercial, legal and regulatory issues related to building automated transportation-as-a-service businesses in the two countries.
The agreement is time-limited and exclusive in both countries, barring either side from working with competitors. Its duration was not disclosed.
It is not clear how involving Waymo might affect the existing alliance between Renault and Nissan, which has been strained since the departure earlier this year of longtime chief executive Carlos Ghosn, or a proposed merger between Renault and Fiat Chrysler Automobiles.
FCA and Renault reached a preliminary agreement in late May to pursue a $35 billion merger. But FCA Chairman John Elkann abruptly withdrew the offer on June 6 after the French government, Renault's biggest shareholder, blocked a board vote and demanded more time to win backing from Nissan.
Waymo late last year began offering a self-driving service in Arizona called Waymo One, but with a human monitor on board.
Waymo also has an existing partnership with FCA under which the automaker is supplying Chrysler Pacifica minivans for Waymo's fledgling self-driving fleet in the United States and eventually may buy self-driving systems from Waymo for its own vehicles.
FCA also agreed in early June to partner with Aurora, the Silicon Valley startup co-founded by former Waymo chief Chris Urmson and funded in part by South Korean automaker Hyundai Motor Co.
The alliance took an earlier step towards working with Alphabet last year, when it agreed to adopt the Google Android operating system in its future vehicles.
(Reporting by Paul Lienert in Detroit and Laurence Frost in Paris; Editing by Sonya Hepinstall) |
Does Avast Plc (LON:AVST) Create Value For Shareholders?
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Today we'll evaluate Avast Plc (LON:AVST) to determine whether it could have potential as an investment idea. Specifically, we're going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business.
First of all, we'll work out how to calculate ROCE. Next, we'll compare it to others in its industry. And finally, we'll look at how its current liabilities are impacting its ROCE.
ROCE measures the amount of pre-tax profits a company can generate from the capital employed in its business. In general, businesses with a higher ROCE are usually better quality. Ultimately, it is a useful but imperfect metric. Renowned investment researcher Michael Mauboussinhas suggestedthat a high ROCE can indicate that 'one dollar invested in the company generates value of more than one dollar'.
Analysts use this formula to calculate return on capital employed:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
Or for Avast:
0.11 = US$249m ÷ (US$2.9b - US$572m) (Based on the trailing twelve months to December 2018.)
Therefore,Avast has an ROCE of 11%.
Check out our latest analysis for Avast
ROCE is commonly used for comparing the performance of similar businesses. It appears that Avast's ROCE is fairly close to the Software industry average of 9.6%. Separate from Avast's performance relative to its industry, its ROCE in absolute terms looks satisfactory, and it may be worth researching in more depth.
When considering this metric, keep in mind that it is backwards looking, and not necessarily predictive. Companies in cyclical industries can be difficult to understand using ROCE, as returns typically look high during boom times, and low during busts. ROCE is, after all, simply a snap shot of a single year. Since the future is so important for investors, you should check out ourfreereport on analyst forecasts for Avast.
Current liabilities include invoices, such as supplier payments, short-term debt, or a tax bill, that need to be paid within 12 months. The ROCE equation subtracts current liabilities from capital employed, so a company with a lot of current liabilities appears to have less capital employed, and a higher ROCE than otherwise. To counteract this, we check if a company has high current liabilities, relative to its total assets.
Avast has total assets of US$2.9b and current liabilities of US$572m. As a result, its current liabilities are equal to approximately 20% of its total assets. A fairly low level of current liabilities is not influencing the ROCE too much.
With that in mind, Avast's ROCE appears pretty good. Avast looks strong on this analysis,but there are plenty of other companies that could be a good opportunity. Here is afree listof companies growing earnings rapidly.
For those who like to findwinning investmentsthisfreelist of growing companies with recent insider purchasing, could be just the ticket.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
A Holistic Look At Atari SA (EPA:ATA)
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Atari SA (EPA:ATA) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of ATA, it is a financially-healthy company with a great history and a excellent growth outlook. In the following section, I expand a bit more on these key aspects. If you're interested in understanding beyond my broad commentary, read the fullreport on Atari here.
Investors in search for stocks with room to flourish should look no further than ATA, with its expected earnings growth of 20%. This growth in the bottom-line is bolstered by an impressive top-line expansion of 79% over the same period, which is a sustainable driver of high-quality earnings, as opposed to pure cost-cutting activities. Over the past few years, ATA has more than doubled its earnings, with its most recent figure exceeding its annual average over the past five years. Not only did ATA outperformed its past performance, its growth also surpassed the Entertainment industry expansion, which generated a -19% earnings growth. This is what investors like to see!
ATA's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. ATA seems to have put its debt to good use, generating operating cash levels of 6x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
For Atari, I've compiled three key factors you should further research:
1. Valuation: What is ATA worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether ATA is currently mispriced by the market.
2. Dividend Income vs Capital Gains: Does ATA return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Ourhistorical dividend yield visualizationquickly tells you what your can expect from ATA as an investment.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of ATA? Exploreour interactive list of stocks with large potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Should You Be Impressed By Société de Services, de Participations, de Direction et d'Elaboration's (EBR:SPA) ROE?
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). To keep the lesson grounded in practicality, we'll use ROE to better understand Société de Services, de Participations, de Direction et d'Elaboration ( EBR:SPA ). Our data shows Société de Services de Participations de Direction et d'Elaboration has a return on equity of 20% for the last year. That means that for every €1 worth of shareholders' equity, it generated €0.20 in profit. See our latest analysis for Société de Services de Participations de Direction et d'Elaboration How Do I Calculate Return On Equity? The formula for return on equity is: Return on Equity = Net Profit ÷ Shareholders' Equity Or for Société de Services de Participations de Direction et d'Elaboration: 20% = €38m ÷ €194m (Based on the trailing twelve months to December 2018.) It's easy to understand the 'net profit' part of that equation, but 'shareholders' equity' requires further explanation. It is the capital paid in by shareholders, plus any retained earnings. You can calculate shareholders' equity by subtracting the company's total liabilities from its total assets. What Does Return On Equity Signify? ROE looks at the amount a company earns relative to the money it has kept within the business. The 'return' is the amount earned after tax over the last twelve months. The higher the ROE, the more profit the company is making. So, as a general rule, a high ROE is a good thing . That means ROE can be used to compare two businesses. Does Société de Services de Participations de Direction et d'Elaboration Have A Good ROE? One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. As is clear from the image below, Société de Services de Participations de Direction et d'Elaboration has a better ROE than the average (11%) in the Beverage industry. Story continues ENXTBR:SPA Past Revenue and Net Income, June 20th 2019 That's what I like to see. We think a high ROE, alone, is usually enough to justify further research into a company. For example, I often check if insiders have been buying shares . How Does Debt Impact Return On Equity? Most companies need money -- from somewhere -- to grow their profits. That cash can come from issuing shares, retained earnings, or debt. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the use of debt will improve the returns, but will not change the equity. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same. Société de Services de Participations de Direction et d'Elaboration's Debt And Its 20% ROE Although Société de Services de Participations de Direction et d'Elaboration does use debt, its debt to equity ratio of 0.27 is still low. The fact that it achieved a fairly good ROE with only modest debt suggests the business might be worth putting on your watchlist. Judicious use of debt to improve returns can certainly be a good thing, although it does elevate risk slightly and reduce future optionality. But It's Just One Metric Return on equity is one way we can compare the business quality of different companies. A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE. But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. Profit growth rates, versus the expectations reflected in the price of the stock, are a particularly important to consider. You can see how the company has grow in the past by looking at this FREE detailed graph of past earnings, revenue and cash flow . Of course Société de Services de Participations de Direction et d'Elaboration may not be the best stock to buy . So you may wish to see this free collection of other companies that have high ROE and low debt. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Bernie Sanders Wants Companies to Give Employees Ownership—a Trend That's Already Growing in the U.K.
Bernie Sanders, one of the leading Democratic candidates for the presidency in 2020, recently revived his push togive American workers more ownershipof the businesses they work for. The Vermont senator told theWashington Postlate last month that businesses should be required to put some of their stocks into employee-controlled funds, so workers get dividends.
Two other Democratic presidential candidates, Sens. Elizabeth Warren and Kirsten Gillibrand, have alsojoined Sandersin sponsoring legislation to make it easier for people to set up employee-owned businesses.
There’s a big debate to be had about whether companies should beforcedto go down the employee-ownership route. Warren and Gillibrand have not suggested that, for instance. But the basic idea being floated in the U.S. is very similar to what an increasing number of company owners are doing voluntarily in the U.K.—handing over their pride and joy to the people who work for them.
Around 350 businesses in the U.K. are now employee-owned, with their bosses having made the decision to gradually transfer their shares into an employee ownership trust. Whoever is working for the company at the time gets to pocket dividends from the shares, though they don’t get to benefit once they’re gone. That’s different from the most common equivalent U.S. system, the employee stock ownership plan (ESOP), which sees employees retain their shares after they leave a firm.
The model is clearly gaining popularity in the U.K., with around 250 of those British businesses having adopted it in the last five years or so. According to the employee-owned John Lewis Partnership, the operator of the John Lewis department store and Waitrose supermarket chains, such businessesnow account for 4% of British GDP. But why would a business owner take this step?
The employee-ownership model is not exactly new—the John Lewis Partnership has been using it since the 1950s and the engineering giant Arup since the 1970s. However, more and more examples have been hitting the headlines recently.
Last month, Julian Richer, the founder of home electronics retail chain Richer Sounds,announcedhe was selling 60% of his company stock to a trust for his workers. And Petra Wetzel, the founder of a Glasgow-based brewery called West, put a tenth of the company’s shares into a similar fund, withthe promiseof more to follow.
“As a business owner, this means that I own less of the company that I created and will continue to own less of it each year,” Wetzel toldFortune. “On a personal level, it makes me feel good about myself as I am not being a selfish prat. I live a nice life, drive a nice car, own a nice house and go on nice holidays. I don’t need more.”
Julian Richer’s stated motivation was one of mortality. He recently turned 60, the age at which his father died, and he said he wanted to ensure a smooth transition for the company while he was still alive.
According to Deb Oxley, the CEO of the Employee Ownership Association, a group that promotes the model, the trend is largely driven by succession concerns. “If you sell a business, it doesn’t guarantee the future of those employees, or the company ethos, the supply chain, the money going into that regional economy,” she said.
If a founder or owner suddenly dies, “everybody gets nervous—suppliers, banks, creditors, insurers, colleagues,” said Richer Sounds chairman David Robinson, who formulated the company’s transition plan together with its founder. “At least this way, we’ve now avoided that.”
Meanwhile, continued independence was the motivating factor for Aardman Animations, the stop-motion outfit behindWallace & GromitandChicken Run,when it adopted the model last year. “This approach…is the best solution we have found for keeping Aardman doing what it does best, keeping the teams in place and providing continuity for our highly creative culture,” said founder Peter Lord and David Sproxton at the time.
There’s yet another consideration in making this move: money.
The U.K. government has promoted the employee-ownership model in recent years with financial incentives. Seeking toexpand the diversity of business modelsin the British economy, it decided five years ago that a worker can get up to £3,600 ($4,600) in shares from the scheme each year without having to pay income tax on it, and owners who sell a controlling interest in their business to an employee ownership fund don’t have to pay capital gains tax on the sale.
In the case of Richer Sounds, Julian Richer got £9.2 million for the shares he sold to the trust, and didn’t have to pay capital gains tax on the sale. The relevant tax rate in the U.K. would otherwise have been 20%.
However, he then gifted £3.5 million of the proceeds directly back to his 530 workers, each of whom got £1,000 for each year they’d worked at the company. Some had been with the firm for over 20 years.
“The reaction has been phenomenal,” said Robinson. “It’s been humbling to see the emails from colleagues saying what it means to them… People saying now they can replace the windows in their homes, pay off some debts, pay for a son or daughter’s wedding. That’s heartwarming.”
Fans of the model point out that employee ownership is a great way to ensure workers are fully behind the company, and making the firm a desirable place to work.
“It’s certainly the case that employee engagement and involvement is something every business should be considering now,” said Robinson. “It’s something that graduates coming into the workplace are really looking for in a business. It’s not just about [whether it’s] a company that pays a fair salary. It’s also about how it treats its employees.”
According to Tamsin Nicholds, a senior associate at law firm FieldFisher in London, the British model of employee ownership has an edge over the American ESOP approach because of the way it incentivizes workers.
“If you work in an employee-owned business and increase the profits of that business, you share more directly in those profits,” she said. “In the U.S. model, you might have a capital asset you can sell out at retirement.”
“You might say the U.S. model gives employees a more direct connection with shares, but the U.K. model can be partnered with individual share incentive schemes,” added Neil Palmer, a partner at the same office. “The U.K. model…is not just about money. It’s also about engagement and feeling you’re participating in something.”
That’s not to say the British model is for everyone, though.
While going the employee-ownership route means avoiding capital gains tax, it may also mean settling for a lower sale price—after all, there’s no bidding involved. The purchase price is also usually paid out on a deferred basis, over five years or so.
“A certain amount of patience is needed, which also requires a good long-term view of the business and confidence in the business and its ability to generate revenues for the short-to-medium-term future,” said Palmer. “You have to be willing to stay involved to ensure you get a good, sustainable platform left in place.”
On the other hand, founders also need to be willing to let go. They can’t just sell their controlling interest to the employee trust and then expect to maintain control over the business indefinitely—certainly in the U.K., the authorities check to make sure that isn’t happening, said Nicholds.
The shift also isn’t something that can be toyed with, especially if there might be a need for future investment from venture capitalists or private equity outfits.
“You can’t have a crack at it and then say, let’s change our mind and do something else,” said Palmer. “If you suddenly decide you need an injection of new capital, it’s more difficult to attract third-party investors because the majority of shares has to be held by a trust, and there’s a limit to the additional rights you can give to investors.”
A pressing question in conversations about the model is whether it’s good for business. The evidence suggests it is.
According tofiguresfrom the Employee Ownership Association, productivity at employee-owned firm went up by 7.3% from the first quarter of 2017 to Q1 of 2018, while general U.K. productivity fell by 0.1%. Other studies havealso foundemployee ownership may improve productivity, pay, job stability and the ability of companies to survive.
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Catch up withData Sheet,Fortune‘s daily digest on the business of tech. |
Resolute Mining determined to grow as adds London listing
* Says London a magnet for African mining investors
* Listing takes up some of the space left by Randgold
By Barbara Lewis
LONDON, June 20 (Reuters) - Australian-listed gold miner Resolute Mining lists on the London Stock Exchange on Thursday to broaden its investor base and pursue its ambition to be a high-tech, pan-African gold producer, partly through acquisitions.
New listings have been scant in London, where uncertainty over Britain's departure from the European Union has impacted decision-making. The junior mining sector, hit by concerns about sustainability and political risk, has found it particularly hard to raise money.
The Resolute listing fills some of the gap left by Randgold, which dropped out of the London market following its merger, completed at the start of this year, to form Barrick Gold .
That merger provides the kind of critical mass that attracts the passive, index-based institutional investors dominant on the London market, analysts said.
Resolute Mining's market capital based on its Australian listing is around $562 million, Refinitiv data shows, but CEO John Welborn has ambitions to grow.
"We are looking for the right project to construct or operate," he said. "We are looking at inorganic opportunities."
The company has stakes ranging from 11% to 27% in six gold exploration companies: Orca Gold, Oklo Resources , Mako Gold, Manas Resources, Loncor Resources and KiloGold.
These span countries including Sudan and Democratic Republic of Congo.
Welborn said in principle he did not favour dual-listings, but for an African-focused company, London was the obvious market.
"The reality is London has been the centre of investment in the African continent. I don't think it's going to be affected by short-term factors," he said.
He said Resolute is set apart by its use of technology as it ramps up its Syama mine in Mali, which is the world's first purpose-built, fully-automated underground gold mine and has capacity to produce 300,000 ounces of gold annually.
The company also owns the Ravenswood Gold Mine in Australia and the Bibiani Gold Mine in Ghana.
Resolute's Australian listing is unchanged and the company has not raised any additional funds or issued any new shares. ($1 = 1.4558 Australian dollars) (Reporting by Barbara Lewis; Editing by Alexander Smith) |
Facebook Libra’s Stark Reminder: Mass Regulation Before Mass Bitcoin Adoption
ByCCN Markets: As expected, the US governmenthas an interestin Facebook’s Libra project. The biggest regulatory organization in the world is sure to take notice when the world’s largest social network moves into the world of banking and personal finance.
Facebook’s aims are from limited to the US, however, and their cryptocurrency will be backed by a “basket” of assets including the dollar. In effect, during times of turmoil, the Libra could be one of the stable-r currencies for the everyday person to use.
As some in the industryhave pointed out, the hype is extreme around Libra.
The thing isnot even a valid blockchainby several accounts, and it struggles to establish itself in an industry whose talent is ideologically placed. Which is to say: you can’t just buy your way into blockchain. You need to come by it honestly.
Read the full story on CCN.com. |
First victim of listeria outbreak in UK hospitals named
Ian Hitchcock died after eating a sandwich at the Royal Hospital Derby (Photo by Rui Vieira/PA Images via Getty Images) The first victim of the outbreak of listeria at British hospitals has been named as 52-year-old company director Ian Hitchcock. According to The Times newspaper, the haulage firm boss from Matlock, Derbyshire, had been admitted to the Royal Hospital Derby five weeks ago for what his family thought would be treatment for cancer. During his time in the hospital he ate a chicken sandwich made by The Good Food Chain which contained meat provided by North Country Cooked Meats. Hitchcock soon became ill and died on June 8 in a Nottingham hospital that he was transferred to. Hitchcock’s brother Alan, 54, said that the family - wife Miranda, and twin son Andrew and John - was devastated by the death. “Miranda is distraught,” he told The Times . “They have been married for 20 years and were devoted to each other. “Ian was a hard-working man and did not like to take a day off sick. We have been in business together for 30 years. “When he went into hospital, I thought he would soon be back at work. I didn’t think he would die because of the food.” The Good Food Chain supplied sandwiches and salads to more than 40 NHS trusts Hitchcock’s sister-in-law Valerie also told the newspaper that the family were shocked as to how he had been infected while in hospital. “We just don’t understand how sandwiches being supplied to hospitals could contain something deadly like listeria.” Five people are believed to died so far from eating sandwiches and salads provided by the same supplier, The Good Food Chain. Deaths have also been recorded at Manchester University NHS Foundation Trust, Aintree University Hospital NHS Foundation Trust, and at University Hospitals of Leicester NHS Trust. The Good Food Chain supplies more than 40 NHS trusts across the UK and has now voluntarily ceased production. Public Health England has launched an investigation into the outbreak. The health secretary Matt Hancock told the Commons last week that there would be “severe consequences” if there is evidence of “wrongdoing” over the listeria outbreak. An inquest will open into Hitchcock’s death at noon on Friday at Derby coroner’s court. |
Does Senior plc (LON:SNR) Create Value For Shareholders?
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Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). We'll use ROE to examine Senior plc (LON:SNR), by way of a worked example.
Senior has a ROE of 8.8%, based on the last twelve months. Another way to think of that is that for every £1 worth of equity in the company, it was able to earn £0.088.
Check out our latest analysis for Senior
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Senior:
8.8% = UK£50m ÷ UK£568m (Based on the trailing twelve months to December 2018.)
Most know that net profit is the total earnings after all expenses, but the concept of shareholders' equity is a little more complicated. It is all earnings retained by the company, plus any capital paid in by shareholders. Shareholders' equity can be calculated by subtracting the total liabilities of the company from the total assets of the company.
ROE measures a company's profitability against the profit it retains, and any outside investments. The 'return' is the yearly profit. The higher the ROE, the more profit the company is making. So, all else being equal,a high ROE is better than a low one. Clearly, then, one can use ROE to compare different companies.
One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. If you look at the image below, you can see Senior has a similar ROE to the average in the Aerospace & Defense industry classification (9.9%).
That's neither particularly good, nor bad. ROE doesn't tell us if the share price is low, but it can inform us to the nature of the business. For those looking for a bargain, other factors may be more important. If you like to buy stocks alongside management, then you might just love thisfreelist of companies. (Hint: insiders have been buying them).
Most companies need money -- from somewhere -- to grow their profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.
Although Senior does use debt, its debt to equity ratio of 0.30 is still low. Although the ROE isn't overly impressive, the debt load is modest, suggesting the business has potential. Conservative use of debt to boost returns is usually a good move for shareholders, though it does leave the company more exposed to interest rate rises.
Return on equity is useful for comparing the quality of different businesses. A company that can achieve a high return on equity without debt could be considered a high quality business. All else being equal, a higher ROE is better.
But when a business is high quality, the market often bids it up to a price that reflects this. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So you might want to take a peek at thisdata-rich interactive graph of forecasts for the company.
Of courseSenior may not be the best stock to buy. So you may wish to see thisfreecollection of other companies that have high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Easy Come, Easy Go: How Theraclion (EPA:ALTHE) Shareholders Got Unlucky And Saw 92% Of Their Cash Evaporate
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Theraclion SA(EPA:ALTHE) shareholders will doubtless be very grateful to see the share price up 38% in the last quarter. But will that repair the damage for the weary investors who have owned this stock as it declined over half a decade? Probably not. Five years have seen the share price descend precipitously, down a full 92%. So we don't gain too much confidence from the recent recovery. The fundamental business performance will ultimately determine if the turnaround can be sustained.
We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.
View our latest analysis for Theraclion
Given that Theraclion didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over five years, Theraclion grew its revenue at 34% per year. That's better than most loss-making companies. So on the face of it we're really surprised to see the share price has averaged a fall of 39% each year, in the same time period. It could be that the stock was over-hyped before. We'd recommend carefully checking for indications of future growth - and balance sheet threats - before considering a purchase.
Depicted in the graphic below, you'll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
You can see how its balance sheet has strengthened (or weakened) over time in thisfreeinteractive graphic.
While the broader market gained around 5.9% in the last year, Theraclion shareholders lost 66%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 39% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. Shareholders might want to examinethis detailed historical graphof past earnings, revenue and cash flow.
For those who like to findwinning investmentsthisfreelist of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on FR exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Are Investors Undervaluing Sogeclair SA (EPA:SOG) By 43%?
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Does the June share price for Sogeclair SA (EPA:SOG) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by taking the foreast future cash flows of the company and discounting them back to today's value. I will be using the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward.
Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
View our latest analysis for Sogeclair
We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate:
[{"": "Levered FCF (\u20ac, Millions)", "2019": "\u20ac5.70", "2020": "\u20ac6.60", "2021": "\u20ac7.75", "2022": "\u20ac8.64", "2023": "\u20ac9.35", "2024": "\u20ac9.91", "2025": "\u20ac10.34", "2026": "\u20ac10.69", "2027": "\u20ac10.96", "2028": "\u20ac11.18"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x2", "2020": "Analyst x2", "2021": "Analyst x2", "2022": "Est @ 11.45%", "2023": "Est @ 8.23%", "2024": "Est @ 5.98%", "2025": "Est @ 4.41%", "2026": "Est @ 3.31%", "2027": "Est @ 2.53%", "2028": "Est @ 1.99%"}, {"": "Present Value (\u20ac, Millions) Discounted @ 8.44%", "2019": "\u20ac5.26", "2020": "\u20ac5.61", "2021": "\u20ac6.08", "2022": "\u20ac6.25", "2023": "\u20ac6.24", "2024": "\u20ac6.09", "2025": "\u20ac5.87", "2026": "\u20ac5.59", "2027": "\u20ac5.29", "2028": "\u20ac4.97"}]
Present Value of 10-year Cash Flow (PVCF)= €57.24m
"Est" = FCF growth rate estimated by Simply Wall St
After calculating the present value of future cash flows in the intial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 10-year government bond rate (0.7%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 8.4%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = €11m × (1 + 0.7%) ÷ (8.4% – 0.7%) = €146m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= €€146m ÷ ( 1 + 8.4%)10= €65.02m
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is €122.27m. To get the intrinsic value per share, we divide this by the total number of shares outstanding.This results in an intrinsic value estimate of €44.4. Relative to the current share price of €25.2, the company appears quite undervalued at a 43% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind.
Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Sogeclair as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.4%, which is based on a levered beta of 1.158. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. What is the reason for the share price to differ from the intrinsic value? For Sogeclair, There are three relevant aspects you should further examine:
1. Financial Health: Does SOG have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does SOG's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of SOG? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. Simply Wall St updates its DCF calculation for every FR stock every day, so if you want to find the intrinsic value of any other stock justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Is Storytel AB (publ) (STO:STORY B) A Financially Sound Company?
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While small-cap stocks, such as Storytel AB (publ) (STO:STORY B) with its market cap of kr5.9b, are popular for their explosive growth, investors should also be aware of their balance sheet to judge whether the company can survive a downturn. Since STORY B is loss-making right now, it’s essential to evaluate the current state of its operations and pathway to profitability. Let's work through some financial health checks you may wish to consider if you're interested in this stock. However, this is not a comprehensive overview, so I suggest youdig deeper yourself into STORY B here.
STORY B has built up its total debt levels in the last twelve months, from kr163m to kr225m , which includes long-term debt. With this rise in debt, STORY B's cash and short-term investments stands at kr484m , ready to be used for running the business. We note it produced negative cash flow over the last twelve months. For this article’s sake, I won’t be looking at this today, but you can examine some of STORY B’soperating efficiency ratios such as ROA here.
At the current liabilities level of kr473m, the company has maintained a safe level of current assets to meet its obligations, with the current ratio last standing at 1.95x. The current ratio is calculated by dividing current assets by current liabilities. Usually, for Media companies, this is a suitable ratio since there's a sufficient cash cushion without leaving too much capital idle or in low-earning investments.
With debt reaching 42% of equity, STORY B may be thought of as relatively highly levered. This is somewhat unusual for small-caps companies, since lenders are often hesitant to provide attractive interest rates to less-established businesses. Though, since STORY B is currently unprofitable, there’s a question of sustainability of its current operations. Running high debt, while not yet making money, can be risky in unexpected downturns as liquidity may dry up, making it hard to operate.
STORY B’s high cash coverage means that, although its debt levels are high, the company is able to utilise its borrowings efficiently in order to generate cash flow. This may mean this is an optimal capital structure for the business, given that it is also meeting its short-term commitment. Keep in mind I haven't considered other factors such as how STORY B has been performing in the past. You should continue to research Storytel to get a more holistic view of the small-cap by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for STORY B’s future growth? Take a look at ourfree research report of analyst consensusfor STORY B’s outlook.
2. Historical Performance: What has STORY B's returns been like over the past? Go into more detail in the past track record analysis and take a look atthe free visual representations of our analysisfor more clarity.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Did Streamwide's (EPA:ALSTW) Share Price Deserve to Gain 43%?
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One simple way to benefit from the stock market is to buy an index fund. But if you choose individual stocks with prowess, you can make superior returns. For example,Streamwide S.A.(EPA:ALSTW) shareholders have seen the share price rise 43% over three years, well in excess of the market return (32%, not including dividends).
Check out our latest analysis for Streamwide
Because Streamwide is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Streamwide actually saw its revenue drop by 15% per year over three years. The revenue growth might be lacking but the share price has gained 13% each year in that time. Unless the company is going to make profits soon, we would be pretty cautious about it.
You can see how revenue and earnings have changed over time in the image below, (click on the chart to see cashflow).
You can see how its balance sheet has strengthened (or weakened) over time in thisfreeinteractive graphic.
It's good to see that Streamwide has rewarded shareholders with a total shareholder return of 38% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 1.3% per year over five years. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. You might want to assessthis data-rich visualizationof its earnings, revenue and cash flow.
If you are like me, then you willnotwant to miss thisfreelist of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on FR exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Iran claims to have shot down US spy drone
The US has confirmed Iran shot down a MQ-4C Triton drone over international waters (Wikipedia/file pic) The United States has confirmed Iranian claims that it had shot down one of its drones - but insists it was flying over international waters. Iran's Revolutionary Guard had said it shot down what it identified as a RQ-4 Global Hawk that had entered its airspace near the Kouhmobarak district in southern Iran's Hormozgan province earlier this morning. However, a US official said that the high-altitude drone - a US Navy MQ-4C Triton - was shot down by Iranian surface-to-air missile over the Strait of Hormuz in international airspace. BREAKING: U.S. Navy MQ-4C Triton high-altitude drone shot down by Iranian surface-to-air missile this evening over Strait of Hormuz in international airspace: U.S. official — Lucas Tomlinson (@LucasFoxNews) June 20, 2019 The alleged downing of the drone comes after an attack on two oil tankers near the Gulf of Oman (AP) Kouhmobarak is some 750 miles south-east of Tehran and is close to the Strait of Hormuz. Captain Bill Urban, a US Central Command spokesman, earlier declined to comment when asked if an American drone was shot down. However, he added: "There was no drone over Iranian territory.” Read more from Yahoo News UK: Toddler covered in 'burn marks' after spilling Daddies ketchup on herself Boris Johnson surges further into the lead in race to be Prime Minister Man becomes first person convicted of making a 3D printed gun in the UK The downing of the drone comes after the US military previously alleged Iran fired a missile at another drone last week that responded to the attack on two oil tankers near the Gulf of Oman . The US blames Iran for the attack on the ships , which Tehran denies. These attacks come against the backdrop of heightened tensions between the US and Iran following Donald Trump's decision to withdraw from Tehran's nuclear deal with world powers a year ago. In recent weeks, the US has sped an aircraft carrier to the Middle East (Reuters) Iran recently has quadrupled its production of low-enriched uranium and threatened to boost its enrichment closer to weapons-grade levels, trying to pressure Europe for new terms to the 2015 deal. Story continues In recent weeks, the US has sped an aircraft carrier to the Mideast and deployed additional troops to the tens of thousands already in the region. Mysterious attacks also have targeted oil tankers as Iranian-allied Houthi rebels launched bomb-laden drones into Saudi Arabia. All this has raised fears that a miscalculation or further rise in tensions could push the US and Iran into an open conflict, some 40 years after Tehran's Islamic Revolution. Watch the latest videos from Yahoo UK |
If You Had Bought Spineway Société Anonyme (EPA:ALSPW) Stock Five Years Ago, You'd Be Sitting On A 99% Loss, Today
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We're definitely into long term investing, but some companies are simply bad investments over any time frame. We don't wish catastrophic capital loss on anyone. For example, we sympathize with anyone who was caught holdingSpineway Société Anonyme(EPA:ALSPW) during the five years that saw its share price drop a whopping 99%. And it's not just long term holders hurting, because the stock is down 97% in the last year. Furthermore, it's down 63% in about a quarter. That's not much fun for holders.
While a drop like that is definitely a body blow, money isn't as important as health and happiness.
Check out our latest analysis for Spineway Société Anonyme
Because Spineway Société Anonyme is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last half decade, Spineway Société Anonyme saw its revenue increase by 7.3% per year. That's a fairly respectable growth rate. So it is unexpected to see the stock down 65% per year in the last five years. The truth is that the growth might be below expectations, and investors are probably worried about the continual losses.
The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).
Take a more thorough look at Spineway Société Anonyme's financial health with thisfreereport on its balance sheet.
Investors in Spineway Société Anonyme had a tough year, with a total loss of 97%, against a market gain of about 5.9%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 65% over the last half decade. We realise that Buffett has said investors should 'buy when there is blood on the streets', but we caution that investors should first be sure they are buying a high quality businesses. You might want to assessthis data-rich visualizationof its earnings, revenue and cash flow.
But note:Spineway Société Anonyme may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on FR exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Turkish lira firms after Fed rate cut signal
ISTANBUL, June 20 (Reuters) - Turkey's lira firmed more than 0.8% on Thursday after the Federal Reserve signalled possible interest rate cuts later this year.
The lira stood at 5.7390 to the dollar at 0657 GMT, hitting its firmest level in two weeks, after Wednesday's close of 5.7855.
The U.S. Federal Reserve on Wednesday said it was ready to battle growing global and domestic economic risks with interest rate cuts beginning as early as next month, as it decided to hold its rates steady.
Turkey's main BIST 100 index was up 1.13% while banking index was up 2%.
(Writing by Ezgi Erkoyun; Editing by Kevin Liffey) |
What Should You Know About Solutions 30 S.E.'s (EPA:ALS30) Long Term Outlook?
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The latest earnings release Solutions 30 S.E.'s (EPA:ALS30) announced in April 2019 confirmed that the business experienced a sizeable tailwind, eventuating to a high double-digit earnings growth of 60%. Below is my commentary, albeit very simple and high-level, on how market analysts predict Solutions 30's earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Check out our latest analysis for Solutions 30
Market analysts' consensus outlook for the coming year seems optimistic, with earnings rising by a significant 63%. This strong growth in earnings is expected to continue, bringing the bottom line up to €64m by 2022.
Even though it is informative understanding the growth year by year relative to today’s figure, it may be more insightful analyzing the rate at which the earnings are rising or falling on average every year. The advantage of this method is that it ignores near term flucuations and accounts for the overarching direction of Solutions 30's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 30%. This means that, we can anticipate Solutions 30 will grow its earnings by 30% every year for the next few years.
For Solutions 30, I've compiled three important factors you should further research:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is ALS30 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether ALS30 is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ALS30? Exploreour interactive list of stocks with large growth potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Here's Why We Think CS Communication & Systemes (EPA:SX) Is Well Worth Watching
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It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks with a good story, even if those businesses lose money. And in their study titledWho Falls Prey to the Wolf of Wall Street?'Leuz et. al. found that it is 'quite common' for investors to lose money by buying into 'pump and dump' schemes.
In contrast to all that, I prefer to spend time on companies likeCS Communication & Systemes(EPA:SX), which has not only revenues, but also profits. While profit is not necessarily a social good, it's easy to admire a business than can consistently produce it. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.
See our latest analysis for CS Communication & Systemes
In the last three years CS Communication & Systemes's earnings per share took off like a rocket; fast, and from a low base. So the actual rate of growth doesn't tell us much. As a result, I'll zoom in on growth over the last year, instead. It's good to see that CS Communication & Systemes's EPS have grown from €0.28 to €0.32 over twelve months. I doubt many would complain about that 15% gain.
One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. CS Communication & Systemes maintained stable EBIT margins over the last year, all while growing revenue 14% to €201m. That's progress.
You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.
Fortunately, we've got access to analyst forecasts of CS Communication & Systemes'sfutureprofits. You can do your own forecasts without looking, or you cantake a peek at what the professionals are predicting.
It makes me feel more secure owning shares in a company if insiders also own shares, thusly more closely aligning our interests. As a result, I'm encouraged by the fact that insiders own CS Communication & Systemes shares worth a considerable sum. Indeed, they hold €37m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. Those holdings account for over 31% of the company; visible skin in the game.
As I already mentioned, CS Communication & Systemes is a growing business, which is what I like to see. If that's not enough on its own, there is also the rather notable levels of insider ownership. That combination appeals to me, for one. So yes, I do think the stock is worth keeping an eye on. Of course, identifying quality businesses is only half the battle; investors need to know whether the stock is undervalued. So you might want to consider thisfreediscounted cashflow valuationof CS Communication & Systemes.
Although CS Communication & Systemes certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, then thisfreelist of growing companies that insiders are buying, could be exactly what you're looking for.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Prodware (EPA:ALPRO): Is It A Smart Long Term Opportunity?
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Since Prodware (EPA:ALPRO) released its earnings in December 2018, analysts seem extremely confident, with earnings expected to grow by a high double-digit of 78% in the upcoming year, against the historical 5-year average growth rate of 12%. Presently, with latest-twelve-month earnings at €9.1m, we should see this growing to €16m by 2020. Below is a brief commentary around Prodware's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you canresearch its fundamentals here.
See our latest analysis for Prodware
Longer term expectations from the 1 analysts covering ALPRO’s stock is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for ALPRO, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of €9.1m and the final forecast of €15m by 2022, the annual rate of growth for ALPRO’s earnings is 13%. This leads to an EPS of €1.96 in the final year of projections relative to the current EPS of €1.18. In 2022, ALPRO's profit margin will have expanded from 5.2% to 8.3%.
Future outlook is only one aspect when you're building an investment case for a stock. For Prodware, I've put together three important aspects you should look at:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is Prodware worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether Prodware is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of Prodware? Exploreour interactive list of stocks with large growth potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
LINE’s Crypto Exchange Could Win Japan License This Month, Report Says
Japanese messaging giant LINE may soon be able to open a cryptocurrency exchange for users based in the country, according to a report from Bloomberg.
LINE is close to winning a crypto exchange license from the Japanese Financial Services Agency (FSA), which could issue the approval as early as this month, the news outletreportedon Thursday, citing sources familiar with the matter.
With that regulatory clearance, LINE would be able to launch the platform – called BitMax– in a few weeks to offer cryptocurrency trading services to its 80 million users in Japan, the report added.
Related:Japan Scrutinizing Crypto Exchanges Ahead of G20 Summit
In July of 2018, LINElauncheda cryptocurrency exchange dubbed BitBox based in Singapore, which excludes users from the firm’s home nation due to lack of regulatory clearance.
As of March this year, only 19 cryptocurrency exchanges in Japan had received a license from the FSA as the agency had tightened up its scrutiny following the $530 millionCoincheckhack in January 2018. Coincheckobtaineda license from the FSA earlier this year.
Bloomberg further said LINE now has another banking license pending in Japan, which is unlikely to be issued until next year. Under such a banking license, LINE would be able to create a cryptocurrency payments tunnel for other services like online shopping.
In March, the FSAgranteda license to cryptocurrency exchange Rakuten Wallet, which was rebranded from a bitcoin exchange called Everybody’s Bitcoin Inc that was acquired by Japan’s e-commerce giant Rakuten in 2018.
Related:Crypto Exchanges Huobi and Fisco Investigated by Japan Watchdog: Report
LINEimage via Shutterstock
• E-Commerce Giant Rakuten Wins License for New Crypto Exchange
• Coincheck Wins Crypto Exchange License 12 Months After Major Hack |
What Can We Expect From Softing AG's (ETR:SYT) Earnings In The Year Ahead?
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Based on Softing AG's (ETR:SYT) earnings update in March 2019, analyst forecasts seem pessimistic, with earnings expected to decline by 4.0% in the upcoming year. Though compared to its 5-year track record of the average earnings growth rate of -9.5%, this is still an improvement. Currently with a trailing-twelve-month profit of €3.3m, the consensus growth rate suggests that earnings will drop to €3.2m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you canresearch its fundamentals here.
View our latest analysis for Softing
The longer term expectations from the 1 analysts of SYT is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for SYT, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 13% based on the most recent earnings level of €3.3m to the final forecast of €5.1m by 2022. EPS reaches €0.46 in the final year of forecast compared to the current €0.38 EPS today. Margins are currently sitting at 3.8%, which is expected to expand to 5.5% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Softing, I've compiled three relevant factors you should further research:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is Softing worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether Softing is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of Softing? Exploreour interactive list of stocks with large growth potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Climate of guilt: Flying no longer the high road for some
NYKOPING, Sweden (AP) — School's out for summer and Swedish lawyer Pia Bjorstrand, her husband and their two sons are shouldering backpacks, ready to board the first of many trains on a whistle-stop vacation around northern Europe. The family is part of a small but growing movement in Europe and North America that's shunning air travel because it produces high levels of greenhouse gas emissions. While experts say fighting climate change will require bigger and bolder actions by governments around the world, some people are doing what they can to help, including changing long-held travel habits. The trend is most prominent in Sweden, where the likes of teen climate activist Greta Thunberg have challenged travelers to confront the huge carbon cost of flying. "Even I, who was climate aware 10 years ago, didn't think about flying in the way that I think now," said Bjorstrand as she waits on the platform of Nykoping station in eastern Sweden. "I didn't know that the effect of flying was so big. So we flew everywhere." Airlines argue that flying accounts for just 2% of man-made greenhouse gas emissions and increasingly efficient planes now use about the same amount of fuel per passenger as a half-full car. Yet the ease and falling cost of air travel is enabling more people to fly more often, meaning airline emissions are soaring even as other sources decline. In 2013, commercial carriers emitted 710 million tons of carbon dioxide. This year, industry group IATA predicts airlines' emissions of CO2 will reach 927 million tons, more than an industrial country like Germany. The figures don't include other factors that scientists say increase the greenhouse effect from flying. Compared with rail travel, planes fare particularly poorly. Bjorstrand's train journey from Nykoping to the Danish capital Copenhagen weighs in at 2.4 kilograms (5.3 pounds) of CO2 per person, according to an online calculator created by the Germany-based Institute for Energy and Environmental Studies consultancy. That compares with over 118 kilograms (260 pounds) of CO2 for a one-way flight. Story continues Such amounts quickly take a big chunk out of the annual carbon budget of 2,000 kilograms per person that scientists say would be sustainable. The rail journey is almost twice as long by train — 5 ½ hours compared with three hours of flying and transit — but that's fine with the family. There'll be plenty of time for Oscar, 9, to pore over his comic books and Gabriel, 11, to read up on World War II history or just watch the lush green forests and lakes of southern Sweden glide by. Last year, Sweden's forests literally went up in smoke as the country experienced a heat wave that led to wildfires unprecedented in its modern history, driving home the possible consequences of global warming for this rich Nordic nation. It was around that time that Thunberg, then a 15-year-old student in Stockholm, began staging weekly protests outside parliament that inspired similar demonstrations by teens and young adults elsewhere. Thunberg has become a celebrity among environmentalists for her heartfelt speeches, savvy use of social media and willingness to take long train journeys to attend events in Rome, Vienna or London. In Sweden, this stance against air travel has spawned the term "flygskam," or "flight shame." "I can see guilt growing," said Bjorstrand. "Some colleagues try not to talk to me about their long-haul flights." The main Swedish train operator, SJ, says it sold 1.5 million more tickets in 2018 than the previous year. Even the number of business travelers is up, rising 12% in the first three months of this year, the company said. Pushback against flight-shaming is coming from some unlikely sources. Anders Levermann, a scientist at the Potsdam Institute for Climate Impact Research, believes that the world needs to stop adding carbon to the atmosphere by mid-century if it wants to keep average temperature increases below 2 degrees Celsius (3.6 Fahrenheit) as outlined in the 2015 Paris accord. But an abrupt end to air travel could have disastrous consequences for society, Levermann warns. "I think travelling in general brings people together," he said. "That includes aviation." Levermann argues that the climate movement shouldn't focus only on air travel. "At the moment it is treated like whales for biodiversity," he said. "It's a poster child." A more effective way to reduce carbon emissions would be to pressure political leaders into taking decisions that have a nationwide or global effect, rather than guilt-tripping individuals into minimizing their carbon footprint, said Levermann. There is some hope that governments will act. Environmental parties were one of the big winners of last month's European Union Parliament elections. Leaders of the 28-nation bloc will this week debate a long-term strategy on climate change, while lower-ranking officials meet in The Hague to discuss taxing aviation fuel and airline tickets. "For decades, governments have failed to regulate aviation emissions," said Andrew Murphy, an aviation expert at Belgium-based pressure group Transport and Environment. Some pin their hopes on technological advances in aviation, including electric planes, though viable battery-powered models aren't on the horizon yet. In the meantime, airlines are trying to address customer concerns even as they prepare to fight new emissions taxes. "It's obviously a hot topic and something we're seeing particularly in the European market," said Steffen Milchsack, spokesman for Lufthansa. The German airlines group wants to start using synthetic kerosene produced with renewable energy in coming years and recently began paying a small fee to compensate the carbon emissions caused by staff travel. Such small, voluntary payments — known as offsets — are preferred by airlines over government-imposed taxes or carbon caps. So far, a majority of passengers are still unwilling to pay more for flights or fly less. A survey by the German travel agents' association, DRV, found that only 2% of air travel last year was offset. But Julia Zhu, a spokeswoman for Atmosfair, a German nonprofit organization, says the amount of CO2 offsets it processed rose from 550,000 tons in 2017 to 800,000 tons last year. "The summer of 2018 was sort of a turning point," she said. Atmosfair uses money from offsets — typically a few euros (dollars) per person for a short-haul flight — to support small-scale carbon reduction efforts, such as buying efficient cooking stoves for families in Africa and Asia. Zhu said companies are increasingly deciding to offset business travel, with a similar effort underway among U.S. academics. Murphy believes grassroots efforts to fly less could ultimately have a significant impact if they change the public perception of air travel. Pia Bjorstrand isn't prepared to give up flying altogether just yet. Last winter, like many sun-starved Scandinavians, the family took a long-distance flight. They bought carbon credits to offset the trip to Namibia. "The U.S. or Africa or Southeast Asia, it's hard to go by train," she said. ___ Frank Jordans reported from Berlin. Mark Carlson in Brussels contributed to this report. ___ Follow Frank Jordans on Twitter at http://www.twitter.com/wirereporter |
What You Should Know About Prismaflex International, S.A.'s (EPA:ALPRI) Financial Strength
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Prismaflex International, S.A. (EPA:ALPRI) is a small-cap stock with a market capitalization of €7.5m. While investors primarily focus on the growth potential and competitive landscape of the small-cap companies, they end up ignoring a key aspect, which could be the biggest threat to its existence: its financial health. Why is it important? Understanding the company's financial health becomes crucial, as mismanagement of capital can lead to bankruptcies, which occur at a higher rate for small-caps. Let's work through some financial health checks you may wish to consider if you're interested in this stock. However, this is not a comprehensive overview, so I suggest youdig deeper yourself into ALPRI here.
ALPRI's debt levels surged from €11m to €16m over the last 12 months , which includes long-term debt. With this rise in debt, ALPRI's cash and short-term investments stands at €2.6m to keep the business going. Additionally, ALPRI has generated cash from operations of €4.1m over the same time period, resulting in an operating cash to total debt ratio of 25%, indicating that ALPRI’s debt is appropriately covered by operating cash.
Looking at ALPRI’s €20m in current liabilities, the company has been able to meet these obligations given the level of current assets of €27m, with a current ratio of 1.38x. The current ratio is the number you get when you divide current assets by current liabilities. Usually, for Media companies, this is a suitable ratio as there's enough of a cash buffer without holding too much capital in low return investments.
ALPRI is a relatively highly levered company with a debt-to-equity of 98%. This is somewhat unusual for small-caps companies, since lenders are often hesitant to provide attractive interest rates to less-established businesses. We can check to see whether ALPRI is able to meet its debt obligations by looking at the net interest coverage ratio. A company generating earnings before interest and tax (EBIT) at least three times its net interest payments is considered financially sound. In ALPRI's, case, the ratio of 8.85x suggests that interest is appropriately covered, which means that lenders may be willing to lend out more funding as ALPRI’s high interest coverage is seen as responsible and safe practice.
ALPRI’s high cash coverage means that, although its debt levels are high, the company is able to utilise its borrowings efficiently in order to generate cash flow. Since there is also no concerns around ALPRI's liquidity needs, this may be its optimal capital structure for the time being. This is only a rough assessment of financial health, and I'm sure ALPRI has company-specific issues impacting its capital structure decisions. I suggest you continue to research Prismaflex International to get a better picture of the small-cap by looking at:
1. Valuation: What is ALPRI worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether ALPRI is currently mispriced by the market.
2. Historical Performance: What has ALPRI's returns been like over the past? Go into more detail in the past track record analysis and take a look atthe free visual representations of our analysisfor more clarity.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
UAW opposes Trump plan to freeze fuel rules at 2020 levels: testimony
By David Shepardson and Timothy Gardner
WASHINGTON (Reuters) - The United Auto Workers (UAW) will tell Congress on Thursday the union opposes the Trump administration's proposal to freeze fuel efficiency requirements at 2020 levels through 2026, according to written testimony.
UAW Legislative Director Josh Nassar will tell two subcommittees of the U.S. House Energy and Commerce Committee that the union shares automakers' concerns that the proposal "could lead to protracted litigation and uncertainty in the industry that will limit growth."
The union represents workers at General Motors Co, Ford Motor Co and Fiat Chrysler Automobiles NV.
Deputy National Highway Traffic Safety Administrator (NHTSA) Heidi King told the U.S. Senate Commerce Committee on Wednesday that existing fuel efficiency standards have hiked the cost of new vehicles and may "discourage consumers from replacing their older car with a newer car that is safer, cleaner and more fuel efficient."
She will raise concerns before the House panel Thursday that the United States is "facing an affordability crisis in the new car market," according to her testimony seen by Reuters.
King said NHTSA and the Environmental Protection Administration are reviewing more than 650,000 comments. King and Bill Wehrum, the EPA's assistant administrator for air and radiation, will testify on Thursday at the House hearing. The agencies are working to finalize the rule "as soon as possible," according to Wehrum's written testimony.
The "preferred alternative will prevent thousands of on-road fatalities and injuries" compared to the Obama-era standards "as more people can afford safer, new cars," his testimony said. Environmentalists and California strongly disagree with that analysis.
California and 17 other states have vowed to sue to block any freeze of the emissions requirements.
The Trump administration's "preferred alternative" would increase U.S. oil consumption by about 500,000 barrels a day by the 2030s but reduce automakers' regulatory costs by more than $300 billion, the two agencies contend.
Mary Nichols, who heads the California Air Resources Board, will also testify Thursday on a separate panel. The Trump proposal will cost Americans millions more in fuel costs, kill jobs, add smog, undermine the auto industry and worsen the climate crisis, according to her written testimony.
She said the White House ended discussions that automakers have urged be restarted.
"We have been open to accommodations that would adjust compliance timing and flexibility, that would create new paths to promote innovative technologies and zero emission vehicles, and that would benefit the public," she said, adding her agency estimates "the net cost of the federal rollback nationally at $168 billion."
Louisiana Attorney General Jeffrey Landry will tell the House panel Thursday that "California should not be able to effectively dictate fuel economy standards, tailpipe emission requirements, and mandates for zero emission vehicles."
"California has circumvented Congress and used its size to create a de facto national fuel efficiency framework," according to his testimony.
Earlier this month, 17 major automakers including GM, Volkswagen AG and Toyota Motor Corp, urged the White House to resume talks with California to avoid a lengthy legal battle. Automakers backed a compromise, warning that the lack of a deal could lead to "an extended period of litigation and instability."
The carmakers urged a compromise "midway" between the Obama-era standards that require annual decreases of about 5% in emissions and the Trump administration's proposal.
Energy company BP Plc weighed into the debate urging the EPA and NHTSA to work with automakers and others to find a path that "continues the impressive trajectory of efficiency improvements" already seen in engines, as they balance vehicle safety and affordability. The June 13 letter, seen by Reuters on Wednesday, was sent to Administrator Andrew Wheeler.
Nassar will say that the UAW urged California, the White House and others "to develop balanced regulations that are good for the environment, American workers, U.S. manufacturing, and the economy."
David Friedman, a former deputy NHTSA administrator under President Barack Obama and a vice president at Consumers Reports, will testify on Thursday that "automakers have the technology to make better, safer, more efficient vehicles, and federal agencies should strengthen the current standards to save Americans' money."
(Reporting by David Shepardson; Editing by Sonya Hepinstall and Richard Chang) |
UPDATE 1-New York lawmakers pass aggressive law to fight climate change
(Updates with passage of the bill, details throughout)
By Barbara Goldberg
NEW YORK, June 20 (Reuters) - New York state lawmakers passed early Thursday one of the nation's most ambitious plans to slow climate change by reducing greenhouse gas emissions to zero by 2050.
If signed into law, it would make New York the second U.S. state to aim for a carbon-neutral economy, following an executive order signed by then California Governor Jerry Brown last year to make that state carbon neutral by 2045.
The marathon session stretched past 2 a.m. Thursday before the votes were tallied with 104 in favor to 35 against.
Assembly member Thomas Abinanti said, before voting yes, that the bill represents hope for the future.
"There's an old adage, that we don't inherit the Earth from our ancestors, but borrow it from our grandchildren," he said.
Assembly member Steve Englebright, a sponsor of the bill, said that the problems posed by climate change stretch beyond the borders of New York, but the state can "inspire others to act."
"This means that despite the mood of anti-science in our nation, the disbelief in Washington to climate change, that states can lead the way," he said.
The New York Assembly's vote in the state capital Albany followed a Senate vote that passed the measure on Tuesday.
It mandates reducing emissions by 85% from 1990 levels by 2050, and offsetting the remaining 15%, making the state carbon neutral.
"I want New York to have the most aggressive climate change program in the United States of America," New York Governor Andrew Cuomo told public radio WCNY in Syracuse after he reached an agreement with legislators on the bill's language. "Climate change is the issue of our lifetime."
Cuomo is expected to sign the measure into law.
Democratic-led U.S. states and cities have been developing environmental policies that advance action on climate change after President Donald Trump vowed to pull the United States out of a 2015 global accord to fight climate change and has backed continuing planet-warming extraction and use of fossil fuels.
On Wednesday, the Trump administration finalized a new carbon emissions rule for U.S. power plants, mainly coal-fired facilities, that replaced a much tougher Obama-era version to fight climate change.
But in another challenge to Trump, Oregon's lawmakers in the House voted to cap climate emissions earlier this week, but the measure must still pass the state Senate.
The Oregon "cap-and-trade" system would reward those who slash their planet-warming emissions with credits they can sell to others who produce higher emissions and exceed government-mandated limits.
New York's "Climate and Community Protection Act" calls for reducing emissions by 40% by 2030 and using only carbon-free sources such as solar and wind to generate electricity by 2040.
Achieving the ambitious goal could require New York state to take drastic steps including eliminating gasoline-powered automobiles and oil-burning furnaces, as well as restoring wetlands or planting trees to remove carbon dioxide from the atmosphere.
Business advocates denounced the plan as a job killer that would force industries to move toward using wind, solar, hydropower and other alternative energy sources and would ultimately fail.
"A zero emissions mandate is unrealistic," The Business Council of New York State said in a statement.
A study published in March by the New York-based think tank Demos said that the act would create and sustain about 150,000 jobs, a little over half of which would be held by people without a college degree.
"Jobs created in renewable energy and energy efficiency can't be outsourced, it's always local," said Daniela Lapidous, organizer for NY Renews, a coalition of over 100 environmental groups.
"New York is mostly purchasing fossil fuel products out of state," she said. "So when we transition to a renewable economy we will be spending New York dollars in New York, creating good local jobs that pay well and are meant to be accessible to women, communities of color, low-income communities."
While California has long held the lead in aggressive policies to fight climate change, backers of the New York measure note that it would be the most ambitious if signed into law. (Reporting by Barbara Goldberg; Additional reporting by Rich McKay; Editing by Scott Malone/ Alistair Bell/Susan Fenton) |
How Do Analysts See Thermador Groupe SA (EPA:THEP) Performing Over The Next Few Years?
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The latest earnings announcement Thermador Groupe SA (EPA:THEP) released in February 2019 revealed that the business experienced a robust tailwind, leading to a double-digit earnings growth of 11%. Below, I've laid out key numbers on how market analysts predict Thermador Groupe's earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
View our latest analysis for Thermador Groupe
Market analysts' prospects for this coming year seems positive, with earnings climbing by a robust 13%. This growth seems to continue into the following year with rates reaching double digit 22% compared to today’s earnings, and finally hitting €37m by 2022.
Even though it is informative understanding the growth rate year by year relative to today’s level, it may be more insightful analyzing the rate at which the earnings are growing on average every year. The benefit of this technique is that it ignores near term flucuations and accounts for the overarching direction of Thermador Groupe's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I've appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 7.7%. This means that, we can expect Thermador Groupe will grow its earnings by 7.7% every year for the next couple of years.
For Thermador Groupe, I've compiled three relevant aspects you should look at:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is THEP worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether THEP is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of THEP? Exploreour interactive list of stocks with large growth potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
‘A Clear Threat’: Big Four Australian Bank Fears Facebook’s Crypto Libra
ByCCN Markets: Facebook’sforay into cryptocurrencieswith Libra has met with a ton of mixed reactions. While some are going gaga over the social media giant’s latest effort that’s supposed to enable cross-border payments at the tap of a button, the traditionalists are taking a dim view.
Governments across the globe are calling forstrict scrutinyand regulation of Libra, but there’s one category of people who are really afraid of what Facebook’s cryptocurrency can do.
Banks, it seems, are shaking at the sight of Facebook Libra. The banking system is afraid that they will be rendered as dinosaurs in a fast-moving world where payments are becoming incredibly fast, cheap, and convenient. This is evident from the comments made by National Australia Bank’s (NAB – one of Australia’s ‘big four’ banks) business banking head Anthony Healy, asreportedby the Sydney Morning Herald:
“They’re not the first company to launch a crypto payment solution, but they do have immense reach obviously through their Facebook platform.With a billion plus users on its platform, it is clearly a threat.” |
How Much Of MyBest Group S.p.A. (EPA:ALMBG) Do Insiders Own?
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If you want to know who really controls MyBest Group S.p.A. (EPA:ALMBG), then you'll have to look at the makeup of its share registry. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Warren Buffett said that he likes 'a business with enduring competitive advantages that is run by able and owner-oriented people'. So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.
MyBest Group is a smaller company with a market capitalization of €28m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutional investors have not yet purchased much of the company. We can zoom in on the different ownership groups, to learn more about ALMBG.
Check out our latest analysis for MyBest Group
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
Since institutions own under 5% of MyBest Group, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.
Hedge funds don't have many shares in MyBest Group. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Shareholders would probably be interested to learn that insiders own shares in MyBest Group S.p.A.. It has a market capitalization of just €28m, and insiders have €2.5m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board, though I generally prefer to see bigger insider holdings. But it might be worth checkingif those insiders have been selling.
With a 31% ownership, the general public have some degree of sway over ALMBG. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
We can see that Private Companies own 57%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.
I like to dive deeperinto how a company has performed in the past. You can accessthisinteractive graphof past earnings, revenue and cash flow for free.
Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of interesting companies.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Does Albis Leasing AG's (ETR:ALG) P/E Ratio Signal A Buying Opportunity?
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Today, we'll introduce the concept of the P/E ratio for those who are learning about investing. To keep it practical, we'll show how Albis Leasing AG's (ETR:ALG) P/E ratio could help you assess the value on offer.What is Albis Leasing's P/E ratio?Well, based on the last twelve months it is 13.48. In other words, at today's prices, investors are paying €13.48 for every €1 in prior year profit.
See our latest analysis for Albis Leasing
Theformula for P/Eis:
Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
Or for Albis Leasing:
P/E of 13.48 = €2.78 ÷ €0.21 (Based on the year to December 2018.)
A higher P/E ratio means that buyers have to paya higher pricefor each €1 the company has earned over the last year. That isn't necessarily good or bad, but a high P/E implies relatively high expectations of what a company can achieve in the future.
If earnings fall then in the future the 'E' will be lower. That means unless the share price falls, the P/E will increase in a few years. So while a stock may look cheap based on past earnings, it could be expensive based on future earnings.
Albis Leasing's earnings per share fell by 4.7% in the last twelve months. And EPS is down 1.7% a year, over the last 3 years. So you wouldn't expect a very high P/E.
We can get an indication of market expectations by looking at the P/E ratio. We can see in the image below that the average P/E (22.4) for companies in the diversified financial industry is higher than Albis Leasing's P/E.
This suggests that market participants think Albis Leasing will underperform other companies in its industry. Many investors like to buy stocks when the market is pessimistic about their prospects. You should delve deeper. I like to checkif company insiders have been buying or selling.
It's important to note that the P/E ratio considers the market capitalization, not the enterprise value. That means it doesn't take debt or cash into account. Theoretically, a business can improve its earnings (and produce a lower P/E in the future) by investing in growth. That means taking on debt (or spending its cash).
Such spending might be good or bad, overall, but the key point here is that you need to look at debt to understand the P/E ratio in context.
Net debt totals a substantial 259% of Albis Leasing's market cap. If you want to compare its P/E ratio to other companies, you must keep in mind that these debt levels would usually warrant a relatively low P/E.
Albis Leasing's P/E is 13.5 which is below average (19.5) in the DE market. When you consider that the company has significant debt, and didn't grow EPS last year, it isn't surprising that the market has muted expectations.
Investors have an opportunity when market expectations about a stock are wrong. If the reality for a company is not as bad as the P/E ratio indicates, then the share price should increase as the market realizes this. Although we don't have analyst forecasts, shareholders might want to examinethis detailed historical graphof earnings, revenue and cash flow.
But note:Albis Leasing may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with strong recent earnings growth (and a P/E ratio below 20).
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Car dealerships in Delhi wear a deserted look as there’s no end to India’s auto blues
Nitin Kumar, a young automobile salesman in South Delhi’s Lajpat Nagar, isn’t having the best of days at work. Customer footfall at his showroom, which sells Indian carmaker Mahindra & Mahindra’s (M&M) vehicles, has fallen in the recent times. Chinese buyers are pulling out of New York real estate in droves “The situation has worsened in the past six months,” Kumar said. “Earlier, 60-70% of customers who made enquiries through phone calls and other channels, used to visit the showroom. This has now gone down to 10-20%.” Falling footfalls and poor sales at Kumar’s showroom is not a one-off instance. India’s automobile sector is witnessing its worst-ever slowdown . In May, passenger vehicle sales in the country fell 20.55% year-on-year to 239,347 units. It was the steepest drop in nearly 18 years, according to data released by industry body Society of Indian Automobile Manufacturers (SIAM). Facebook’s Libra isn’t the next bitcoin, but you can make money off it anyway Several major automakers are being forced to cut production as inventory piles up. Mahindra Vehicle Manufacturers, an arm of M&M, informed the stock exchanges (pdf) on June 8 that it would be observing “no production days ranging between 5–13 days” in the April-June quarter as part of “aligning its production with sales requirements.” Market leader Maruti Suzuki will also shut its plants between June 23 and June 30 to curb the rise in unsold vehicles. What caused the downturn? A host of factors has brought India’s automobile industry, the world’s fourth largest by sales, to this sorry state. First, the Indian economy is going through a slump. The country’s gross domestic product (GDP) ( growth ) fell from 7.2% in financial year 2018 to 6.8% in financial year 2019, data from Central Statistics Office showed. This has resulted in cautious consumer spending. Second, automakers are struggling to comply with the government’s new policies, including a total ban on polluting petrol and diesel vehicles, forcing them to discontinue some old models. The government think tank Niti Aayog has recommended that only electric vehicles be sold in the country after 2030 . Story continues Besides, the Bharat VI emission standards are set to kick in from April 2020, forcing brands like Maruti Suzuki to remove diesel cars from their portfolio from next year. “Customers know buying diesel cars will no longer be fruitful, and we cannot convince them otherwise. Petrol variants can still find buyers, but diesel ones continue to wait,” said a Maruti salesperson from East Delhi’s Preet Vihar showroom, who did not wish to be named. Hope for better tomorrow Some, though, see the weak sales as just a passing phase. “The scorching heat and a lack of festive flavour in May, June, and July are the primary reasons for customers losing interest in buying. Besides, more than a month-long general election in May has added to the woes,” Shadaan Qureshi, Maruti Suzuki’s senior regional manager in Noida, told Quartz. Consumers tend to put off vehicle purchases during the election season hoping that the new government will dole out some benefits in its general budget. The second Narendra Modi government, which came to power on May 26 this year, is scheduled to present its first budget on July 5. Qureshi also adds that his brand is in a better position than most others. “In Noida itself, we have seen more than three showrooms of various brands being shut down. Maruti, too, experienced a decline but with wedding season around the corner, we expect the consumers to come back.” Qureshi was referring to showrooms in remote parts of Noida that shuttered a few months ago. New launches The hope that sales will soon turn the corner has prompted some carmakers to announce new models. For instance, South Korean auto giant Hyundai’s maiden sports utility vehicle (SUV), Venue, is moving the needle in at least some showrooms in the Delhi National Capital Region. Launched less than a month ago, the compact SUV is in high demand due to its competitive price—starting Rs6.5 lakh ($9,300) in the capital—and has a waiting period of over two months . “Our salespersons are busy dealing with customers who want to book Venue irrespective of the long waiting period. We have received over 15,000 bookings even before the pricing was revealed on May 21,” said Ankur Gupta, team leader at Hyundai’s Dilshad Garden showroom in East Delhi. “If it weren’t be for Venue, we, too, would have been dealing with low sales.” Sign up for the Quartz Daily Brief , our free daily newsletter with the world’s most important and interesting news. More stories from Quartz: The underlying tension behind Ethiopia’s flawed federal system and its risks Indians can worry less as the US denies capping H-1B visa quota |
Estimating The Fair Value Of Tristel Plc (LON:TSTL)
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Does the June share price for Tristel Plc (LON:TSTL) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by taking the expected future cash flows and discounting them to their present value. I will use the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward.
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
Check out our latest analysis for Tristel
We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars:
[{"": "Levered FCF (\u00a3, Millions)", "2019": "\u00a34.00", "2020": "\u00a35.50", "2021": "\u00a36.25", "2022": "\u00a36.88", "2023": "\u00a37.38", "2024": "\u00a37.79", "2025": "\u00a38.11", "2026": "\u00a38.38", "2027": "\u00a38.61", "2028": "\u00a38.80"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x1", "2020": "Analyst x1", "2021": "Est @ 13.69%", "2022": "Est @ 9.95%", "2023": "Est @ 7.33%", "2024": "Est @ 5.5%", "2025": "Est @ 4.22%", "2026": "Est @ 3.32%", "2027": "Est @ 2.69%", "2028": "Est @ 2.25%"}, {"": "Present Value (\u00a3, Millions) Discounted @ 7.22%", "2019": "\u00a33.73", "2020": "\u00a34.78", "2021": "\u00a35.07", "2022": "\u00a35.20", "2023": "\u00a35.21", "2024": "\u00a35.13", "2025": "\u00a34.98", "2026": "\u00a34.80", "2027": "\u00a34.60", "2028": "\u00a34.39"}]
Present Value of 10-year Cash Flow (PVCF)= £47.89m
"Est" = FCF growth rate estimated by Simply Wall St
The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 10-year government bond rate of 1.2%. We discount the terminal cash flows to today's value at a cost of equity of 7.2%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = UK£8.8m × (1 + 1.2%) ÷ (7.2% – 1.2%) = UK£149m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= £UK£149m ÷ ( 1 + 7.2%)10= £74.11m
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is £122.01m. To get the intrinsic value per share, we divide this by the total number of shares outstanding.This results in an intrinsic value estimate of £2.74. Relative to the current share price of £2.93, the company appears around fair value at the time of writing. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.
We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Tristel as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.2%, which is based on a levered beta of 0.901. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For Tristel, I've compiled three important factors you should further research:
1. Financial Health: Does TSTL have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does TSTL's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of TSTL? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the LON every day. If you want to find the calculation for other stocks justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Is There An Opportunity With Fountaine Pajot SA's (EPA:ALFPC) 48% Undervaluation?
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Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Fountaine Pajot SA (EPA:ALFPC) as an investment opportunity by projecting its future cash flows and then discounting them to today's value. This is done using the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple!
Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. Anyone interested in learning a bit more about intrinsic value should have a read of theSimply Wall St analysis model.
Check out our latest analysis for Fountaine Pajot
We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars:
[{"": "Levered FCF (\u20ac, Millions)", "2019": "\u20ac16.20", "2020": "\u20ac18.85", "2021": "\u20ac21.10", "2022": "\u20ac20.60", "2023": "\u20ac20.30", "2024": "\u20ac20.14", "2025": "\u20ac20.07", "2026": "\u20ac20.06", "2027": "\u20ac20.11", "2028": "\u20ac20.18"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x1", "2020": "Analyst x2", "2021": "Analyst x1", "2022": "Est @ -2.39%", "2023": "Est @ -1.45%", "2024": "Est @ -0.8%", "2025": "Est @ -0.34%", "2026": "Est @ -0.02%", "2027": "Est @ 0.21%", "2028": "Est @ 0.37%"}, {"": "Present Value (\u20ac, Millions) Discounted @ 8.09%", "2019": "\u20ac14.99", "2020": "\u20ac16.14", "2021": "\u20ac16.71", "2022": "\u20ac15.09", "2023": "\u20ac13.76", "2024": "\u20ac12.63", "2025": "\u20ac11.64", "2026": "\u20ac10.77", "2027": "\u20ac9.99", "2028": "\u20ac9.27"}]
Present Value of 10-year Cash Flow (PVCF)= €130.99m
"Est" = FCF growth rate estimated by Simply Wall St
The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 10-year government bond rate of 0.7%. We discount the terminal cash flows to today's value at a cost of equity of 8.1%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = €20m × (1 + 0.7%) ÷ (8.1% – 0.7%) = €276m
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= €€276m ÷ ( 1 + 8.1%)10= €127.04m
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is €258.03m. To get the intrinsic value per share, we divide this by the total number of shares outstanding.This results in an intrinsic value estimate of €233.56. Relative to the current share price of €120.5, the company appears quite good value at a 48% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind.
Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Fountaine Pajot as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.1%, which is based on a levered beta of 1.106. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Whilst important, DCF calculation shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. What is the reason for the share price to differ from the intrinsic value? For Fountaine Pajot, There are three additional factors you should further research:
1. Financial Health: Does ALFPC have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does ALFPC's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of ALFPC? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. Simply Wall St updates its DCF calculation for every FR stock every day, so if you want to find the intrinsic value of any other stock justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Study destroys the myth millennials wasting money in the UK
Millennials have been accused of wasting money on avocadoes on toast. Photo: Matthew Horwood/Getty Images Millennials in the UK have seen their spending power plummet while baby boomers have grown wealthier over the past two decades, according to a new report. A study by the Resolution Foundation said British young people are now 7% poorer in real terms after housing costs than their counterparts were in 2001. It said people aged 18 to 29 spent most of their spare cash on groceries, education and bills, while people aged 65 and over spent a higher share on hotels, culture, restaurants and recreation. The findings suggest stereotypes of millennials being the most likely to waste money on eating and going out could be wide of the mark. Two years ago an Australian millionaire made headlines worldwide by telling millennials to stop frittering away cash on “smashed avocado and coffee” if they wanted to get on the property ladder. The ‘Intergenerational Audit’ by the think tank suggests young people’s incomes have been squeezed since the financial crisis, just as they face higher housing costs. It suggests there is a “long road” ahead for younger people trying to get on the property ladder at rates similar to older generations. The report also warns the increased costs of pensions, care, welfare and healthcare for the older generation, living longer with more complex conditions, will be a “major demographic headwind” Younger working taxpayers will be contributing to the additional costs, estimated at an additional £36bn a year by 2030. David Willetts, president of the Intergenerational Centre, said: “From frustrations about buying a first home to fears about the cost of care, Britain faces many intergenerational challenges. The big living standards gains that each generation used to enjoy over their predecessors have stalled. But he added: “Welcome steps are being made, from stronger pay growth for young millennials to the success of auto-enrolment into pension saving.” |
SEO Malaysia Agency Robin Ooi Celebrates 5th Anniversary With Updated Website
The Malaysia-based search engine optimisation firm continues to growand expand its services, as its reputation for quality strategies andinternet marketing techniques grows. Founded in 2014, the agency has nowreached five years in operation
GEORGETOWN, PENANG, MALAYSIA / ACCESSWIRE / June 20, 2019 /Robin Ooi is pleased to announce that theSEO Malaysiaorganization has reached the milestone of five years in operation. The firm has built a significant reputation largely created by Robin's experience in internet marketing. He has helped in the online success of hundreds of local business owners. The team is dedicated to achieving the promised results made to clients. Success is manifested as clients experience a sizable return on their investment and a dramatic increase in the revenue from their business.
Optimization techniques applied to business or organization websites results in a good rank on the major search engine results pages. Instead of using paid advertising strategies such as pay-per-click, SEO brings a stream of interested visitors at no charge when the business site ranks high with Google, Bing, Yahoo and other major search engine platforms. In order to achieve the highest number of visitors to the site, it must appear within the first few listings on the first page of search engine results.
For more information click herehttps://www.robin-ooi.com
The choice of a professional firm to provide the most substantial and effective optimization is crucial. The Malaysia firm headed by Ooi helps clients to achieve great search engine ranks by focusing on three areas. These are: the website content; the way the website is organized and the number and quality of links and citations for the website.
A spokesperson for the company explained, "By focusing on improving your SEO scores in each of these three categories, we are able to move your site up. We may suggest content to take advantage of good terms that can earn you more business. We may suggest organizational changes to your website that will make it easier for search engine bots and human beings to find all of the pages of your site. Finally, we will search for quality sources of links and citations that will get your site noticed by people and search engines in a positive way".
Location information is available atRobin Ooi
Facebook:https://www.facebook.com/RobinOoiSEOMalaysia
Contact Info:Name: Robin OoiEmail:Send EmailOrganization: Robin OoiAddress: 390-G, Jalan Panchor, Taman Continental, 11600 George Town, Pulau PinangPhone: 011-1442 6865Website:https://www.robin-ooi.com
SOURCE:Robin Ooi
View source version on accesswire.com:https://www.accesswire.com/549340/SEO-Malaysia-Agency-Robin-Ooi-Celebrates-5th-Anniversary-With-Updated-Website |
Norfolk Broads home starts to sink
A couple discovered their cottage on the Norfolk Broads sinking (SWNS) A devastated couple have been forced to flee their idyllic £850,000 riverside cottage after they woke up to find it had started sinking overnight. Ken Pitts and wife Gail, who have been married for 41 years, discovered to their horror that their thatched home on the River Bure at Horning in Norfolk had developed a severe tilt around three months ago. Neighbours have claimed the 1970s-built cottage started sinking shortly after it was re-thatched because wooden pile foundations had broken under the weight. The couple have now been forced to move out of their home of 17 years while they wait to find out whether it will have to be demolished. Signs have been erected around the property with the words 'Danger; Unsafe." The site of their reed-thatched home leaning significantly to one side has caused a stir among locals and passers-by (SWNS) Ken said there had been no warning signs that the west side of their home starting to sink and that it simply happened "overnight", leaving them "devastated". He and his wife declined to speak further and said they are working with their insurers to try and find a resolution. The site of their reed-thatched home leaning significantly to one side has caused a stir among locals and passers-by. Read more from Yahoo News UK: US confirms spy drone shot down by Iran in international airspace First victim of listeria outbreak in British hospitals named Boris Johnson surges further into the lead in race to be Prime Minister Some locals took to Facebook to express their concern for the couple. Local Maggie Tuck said: "I heard one end was steel piles the other was old wooden piles . It's the wood piles that have collapsed. "They are going to take off the thatch to save it and then demolish . Very sad." Signs have been erected around the property with the words 'Danger; Unsafe' (SWNS) Sally Blackburn added wrote: "We passed this last week and I actually couldn't bear to look at it, too upsetting!" Viv Garner added: "I used to dream of living there when I was a child. So sad to see this." A Broads Authority spokesperson said: "It is a huge shame that this lovely cottage appears to be in such a precarious position. "Unfortunately it is something that can be an ongoing danger for properties built on unstable ground. Story continues "We wish the owners all the best as they assess what can be done. "If the cottage is within our area as a planning authority we would offer free pre-planning advice should this be needed in the future." The three-bedroom house offers a large garden with a river frontage, along with allocated boat mooring and fishing opportunities (SWNS) Building surveyor at North & Hawkins Building Consultancy, Tom North, 40, said he believed something was “going on underground”. He added: "Obviously the area is extremely wet and most of those properties, and certainly the old ones, will have timber pile foundations which will be driven down to the ground. "One possibility is the house may have timber pile foundations and the timber piles may have broken because the ground below has shifted or has decayed and deteriorated. Because the timber piles have broken it may be imposed by the mass and isn't able to support it anymore. "It is similar to a rock on top of a wet sponge. "You can put new foundations in. The questions is whether you try and stabilise it. Sometimes you don't want to risk the damage it may cause." |
Imagine Owning Alfen (AMS:ALFEN) And Wondering If The 25% Share Price Slide Is Justified
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Investors can approximate the average market return by buying an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. Investors inAlfen N.V.(AMS:ALFEN) have tasted that bitter downside in the last year, as the share price dropped 25%. That's well bellow the market return of 5.7%. Because Alfen hasn't been listed for many years, the market is still learning about how the business performs. Furthermore, it's down 19% in about a quarter. That's not much fun for holders.
See our latest analysis for Alfen
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Alfen fell to a loss making position during the year. Some investors no doubt dumped the stock as a result. We hope for shareholders' sake that the company becomes profitable again soon.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Thisfreeinteractive report on Alfen'searnings, revenue and cash flowis a great place to start, if you want to investigate the stock further.
Given that the market gained 5.7% in the last year, Alfen shareholders might be miffed that they lost 25%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. With the stock down 19% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. You might want to assessthis data-rich visualizationof its earnings, revenue and cash flow.
If you like to buy stocks alongside management, then you might just love thisfreelist of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on NL exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Malaysian PM says Russia being made a scapegoat for downing of flight MH17
KUALA LUMPUR (Reuters) - Malaysian Prime Minister Mahathir Mohamad said on Thursday Russia is being made a scapegoat for the downing of Malaysia Airlines flight MH17 and questioned the objectivity of the investigations into the 2014 disaster. The international investigative team set up to look into the crash said on Wednesday three Russians and one Ukrainian will face murder charges for the deaths of 298 people aboard the flight that was shot down over eastern Ukraine. "We are very unhappy, because from the very beginning it was a political issue on how to accuse Russia of the wrongdoing," Mahathir told reporters at a government event. "Even before they examine, they already said Russia. And now they said they have proof. It is very difficult for us to accept that." MH17 was shot out of the sky on July 17, 2014, over territory held by pro-Russian separatists in eastern Ukraine as it was flying from Amsterdam to Kuala Lumpur. Everyone on board was killed. Russia has denied any involvement. Mahathir's remarks seemed at odds with comments a day earlier from Malaysia's representative on the five-country joint investigative team set up to prosecute suspects. At a press conference in the Netherlands on Wednesday, the Dutch-led international team named four suspects as Russians Sergey Dubinsky, Oleg Pulatov and Igor Girkin, and Ukrainian Leonid Kharchenko. Dutch Chief Prosecutor Fred Westerbeke said the suspects were believed to be responsible for bringing a Russian-made missile into eastern Ukraine "with the aim to shoot down an airplane". At the same press conference, Malaysian prosecutor Mohamad Hanafiah bin Zakaria told reporters the findings "are based on extensive investigations and also legal research." "We support the findings," he said. The three other members of the team are from Australia, Ukraine and Belgium. Moscow has called the murder charges against the Russian suspects groundless. Story continues Mahathir said he did not think the Russians were involved and that the investigative team's findings were based on "hearsay". "I expect everybody to go for the truth," he said. (Reporting by Joseph Sipalan; Additional reporting by Toby Sterling in Amsterdam; Editing by Nick Macfie and Andrew Heavens) |
QuadrigaCX Co-Founder Used User Deposits for His Own Trading, Created Fake Accounts
The deceased owner of the now-defunct Canadian crypto exchangeQuadrigaCXwas allegedly transferring user funds off the exchange and using them as a security for his own margin trading on other platforms.
The news was revealed in thefifth reportfrom court monitor Ernst & Young (EY), filed on June 19 with the Supreme Court of Nova Scotia.
EY has outlined its principal concerns in relation to the exchange, noting that its operations were “significantly flawed from a financial reporting and operational control perspective.”
In addition to most of the activities being directed by a single individual — the now-deceased co-founder Gerald Cotton — EY notes that there was neither segregation between duties and basic internal controls, nor any segregation of assets between Quadriga’s and user funds.
In this context, EY adds, Quadriga did not have any visibility into its profitability. Users’ crypto, the report states, was not exclusively maintained in the exchange’s wallets. Moreover:
“Significant volumes of Cryptocurrency were transferred off Platform outside Quadriga to competitor exchanges into personal accounts controlled by Mr. Cotten. It appears that User Cryptocurrency was traded on these exchanges and in some circumstances used as security for a margin trading account established by Mr. Cotten.”
In addition, Cotten reportedly created fake “identified” accounts on Quadriga under multiple aliases “into which unsupported Deposits were deposited and used to trade within the platform.” This, EY, states, resulted in “inflated revenue figures, artificial trades with Users and ultimately the withdrawal of Cryptocurrency deposited by Users.”
In his trading on competitor exchanges, EY notes that Cotten incurred trading losses and incremental fees that subsequently adversely affected Quadriga’s cryptocurrency reserves.
Notably, EY says it has been unable to confirm the identity of wallet holders to which substantial sums of crypto were transferred. As of the filing date, a reported 76,000 users are owed a combination of fiat and crypto by Quadriga, at an aggregate value of CD$214.6 million ($162.2 million).
Competitor exchanges reportedly received multiple forms of crypto from Quadriga wallets from 2016-19 including 9,450bitcoin(BTC), 387,738ether(ETH) and 239,020litecoin(LTC).
The report outlines in detail the crypto transfers and liquidations that EY identified from Quadriga to date, with varying success — among which CD$80 million ($60.5 million) in BTC remains unaccounted for, having been sold via an unnamed third-party exchange.
As previously reported, Quadriga had initiallyfiledfor creditor protection when — following the death of its co-founder Gerald Cotten — the exchange ostensibly lost access to its cold wallets and corresponding keys that allegedly held the assets owed to its clients.
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Bank investments in technology not yet driving significant revenue growth -Accenture
By Anna Irrera
NEW YORK, June 20 (Reuters) - The $1 trillion invested by traditional banks globally over the past three years to improve their technology has not yet delivered the revenue growth that had been expected, according to an Accenture report released on Thursday.
The consultancy analyzed more than 160 of the largest retail and commercial banks in 21 countries to determine whether those making the most progress on technology were achieving better financial performance.
It found that banks that had advanced the most on digital were the most profitable and highly valuable, but that the higher profitability was driven by having reduced costs rather than revenue growth.
Banks had hoped that by creating better digital products and experiences for customers they would have achieved the same fast user and revenue growth as new tech-savvy competitors or large technology firms, Alan McIntyre, a senior managing director at Accenture and head of its global banking practice, said in an interview.
"Having a good digital offering is not enough to move customers," McIntyre said. "If it doesn't change, the industry is going to end up looking more like a utility."
The study comes as incumbent banks continue to dedicate vast amounts of funding to overhaul their old technology systems and offer more digital services to customers.
Banks are seeking to meet the higher expectations of customers who have grown accustomed to the user-friendly products and services offered by consumer technology companies and new financial services entrants.
Accenture did not discount investments in technology, but noted that reducing costs was only the first step banks needed to make to become more competitive in the changing landscape.
The move to digital is likely to reduce banks' income from fees, such as those customers pay for advice or transactions, according to the report.
It recommends that moving forward banks focus on making more income from taking risks linked with running the balance sheet, such as interest rate and credit, or by creating new revenue streams in areas not in their traditional domain. (Reporting by Anna Irrera; editing by Diane Craft) |
Italy’s Banking Sector Will Boost Reconciliations With Blockchain
The Italian Banking Association (ABI) will deploy blockchain technology to run reconciliations beginning March 2020, Finextrareported.
The first use of the blockchain among Italy’s banks willintegrate distributed ledger technology in interbank processes to accelerate settlements.
The move is part of the Spunta Project, a program managed by ABI Lab, the association’s research and innovation arm, to improve transparency and efficiency of communication between banking counterparts.
The banking consortium also aims to enact daily rather than monthly reconciliations. The Italian word “spunta” translates to check.
The latest round of tests reportedly began in February with participation from 18 banks, which together represent 78% of the Italian banking sector by number of employees.
Last October marked thesuccessful completionof the first trial round, lead by Intesa Sanpaolo, Italy’s second largest bank, and 13 others. In the 10-month proof-of-concept and testing phase each bank was assigned a node and the banks uploaded actual data bank data, processing 1,200,000 transactions through the course of the trial.
The trial validated the use of blockchain and smart contracts to assist in knotty banking operations to reduce discrepancies between banking ledgers.
In February of this year, the Italian House of Representatives approved a bill defining DLT and blockchain, as well as the technical criteria that smart contracts will have to comply with in order to have legal validity.
Intesa Sanpaolo bank pavilionimage via Shutterstock |
We know about challenger banks but what about challenger currency?
(Illustration: Getty Images) There are many challenger banks out there, but they all use the same fiat money principle. We explore fiat, ask whether challenger banks really challenge, and profile a new reserve banking platform that strives to be a better form of mainstream money: one that’s based on a physical asset and protected from inflation and systemic bank risks. What is fiat money? Fiat money is a national currency that’s not tied to the price of a commodity such as gold. Fiat money’s value is based on our faith in the currency issuer – usually a government or central bank. We trust the issuer that the paper money can be exchanged for its face value in goods and services, which is why you’ll find the phrase, ‘I promise to pay the bearer on demand the sum of x pounds’ on British banknotes. The pros of fiat currencies Because fiat money isn’t dependent upon a fixed or scarce resource, governments can control its value and supply – it’s literally a licence to print money. They can manage credit supply, liquidity and interest rates. ...And the cons For fiat currency to work, the government’s fiscal policy, financial system and regulation must be responsible, control inflation and avoid hyperinflation . This is not always so, as demonstrated by the 2008 global financial crisis and in Venezuela currently, and many people feel they can no longer rely on the government and big banks to be in charge of their money. Even controlled inflation erodes savings by design. With an unlimited supply of money, there is more risk of bubbles – those economic cycles of rapid price increase followed by a price crash, such as the property bubble of the 1980s . Governments can take it upon themselves to decide to stimulate the economy through quantitative easing – this can cause greater inflation: impacting house prices, increasing national debt, bloating the financial markets – and decimating the value of your savings. (Illustration: Getty Images) Are challenger banks really that challenging? Challenger banks are anything other than the recognised main high street banks (Barclays, HSBC, Lloyds, RBS or Santander). They can be split into four broad groups, each with different target markets and delivery models: Story continues Digital-only banks (eg. Starling) Innovative, and promising exceptional customer experience, these solely app-based banks serve the mobile banking digital megatrend Specialist banks (eg. Secure Trust) cover customers underserved by other banks, such as some SMEs, and buy-to-let. Their physical presence is limited, using call centres, third-party distribution and, increasingly, digital platforms Mid-sized full service banks (eg. TSB) that have physical branches and digital platforms Non-bank brands (eg. Sainsbury’s Bank) trade on their trusted parent company branding and customer loyalty At first glance, these four groups seem pretty innovative and different from traditional banks. Then, you realise that, behind the slick interfaces, your money is still held in the fiat currency monopoly: controlled, regulated and distributed by government and central banks, eroded by inflation, currency crises and black swans like another global credit crunch. Same old same old. What’s challenging fiat currency? Tally . Tally is a physical asset money, accessed through a customer’s individual banking account and debit card. So what is the physical asset? Gold. Yes, really. Physical gold is the oldest, and historically the most reliable form of money. And innovative new banking brand Tally has created a self-contained monetary system that enables you to use physical gold held outside the banking system, yet fully connected with the global banking network and transacting seamlessly with fiat currency. Tally is 100% reserve banking, meaning your deposit is not lent out, so it’s protected from bank lending and default risk, as well as inflation. To be clear, Tally is not a speculative investment on the gold market; you don’t buy the precious metal as a commodity and watch its value go up and down, selling on a high. Rather, it is used like any other mainstream currency but this one is your personal reserve currency. You deposit your money via the app which converts into Tally, with 1 Tally being 1 milligram of gold. The value is added to your Tally banking account linked to a Tally debit Mastercard® which is used to spend seamlessly every day like a regular account. Because gold historically holds its purchasing power over time (despite its fluctuations), whatever you save in Tally today should buy you just as much in the future, unlike fiat money which is devalued by design (i.e. inflation) and which is also exposed to the systemic risks of fractional reserve banking and fiat currency. (Illustration: Getty Images) How does Tally work? For the first time, you can choose a mainstream currency to use and sign up within minutes. You buy Tally units: each unit is a physical asset being 1 milligram of LBMA -approved physical gold, held in a Swiss vault, allocated to and directly owned by you. You can spend your Tally seamlessly worldwide using Tally’s smartphone banking app and debit Mastercard, and there are no transaction fees, FX fees, hidden commissions or mark-ups. Just a single monthly charge of 0.1% of your average monthly holding which covers storage, security, insurance and operational costs. The monthly charge reduces to 0.05% on any holding above half a million Tally (t500,000). Your physical asset (i.e. gold) is also 100% insured to your deposit’s full value – not limited to the £85k protection offered under the Financial Services Compensation Scheme. At last, you can get control and peace of mind with 100% reserve banking, using a physical asset as money. Tally is money that adds up. Find out more at www.tallymoney.com and download the Tally app from the App Store or Google Play . Tally relative to GBP (£) can rise or fall due to fluctuations in the global gold price. TallyMoney Ltd is an Electronic Money Directive Agent (Financial Conduct Authority Reference Number 902059) of the FCA-licensed E-Money Institution, PayrNet Limited (FCA Reg. No. 900594). Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated. |
A Look At The Intrinsic Value Of Dollar Industries Limited (NSE:DOLLAR)
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In this article we are going to estimate the intrinsic value of Dollar Industries Limited (NSE:DOLLAR) by taking the expected future cash flows and discounting them to today's value. This is done using the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple!
Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
Check out our latest analysis for Dollar Industries
We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars:
[{"": "Levered FCF (\u20b9, Millions)", "2019": "\u20b9250.00", "2020": "\u20b9379.00", "2021": "\u20b9713.00", "2022": "\u20b91.03k", "2023": "\u20b91.38k", "2024": "\u20b91.74k", "2025": "\u20b92.10k", "2026": "\u20b92.45k", "2027": "\u20b92.79k", "2028": "\u20b93.12k"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x1", "2020": "Analyst x1", "2021": "Analyst x1", "2022": "Est @ 45.11%", "2023": "Est @ 33.84%", "2024": "Est @ 25.96%", "2025": "Est @ 20.43%", "2026": "Est @ 16.57%", "2027": "Est @ 13.86%", "2028": "Est @ 11.97%"}, {"": "Present Value (\u20b9, Millions) Discounted @ 15.39%", "2019": "\u20b9216.66", "2020": "\u20b9284.66", "2021": "\u20b9464.10", "2022": "\u20b9583.67", "2023": "\u20b9677.03", "2024": "\u20b9739.04", "2025": "\u20b9771.37", "2026": "\u20b9779.27", "2027": "\u20b9768.98", "2028": "\u20b9746.20"}]
Present Value of 10-year Cash Flow (PVCF)= ₹6.03b
"Est" = FCF growth rate estimated by Simply Wall St
After calculating the present value of future cash flows in the intial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 10-year government bond rate (7.6%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 15.4%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = ₹3.1b × (1 + 7.6%) ÷ (15.4% – 7.6%) = ₹43b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= ₹₹43b ÷ ( 1 + 15.4%)10= ₹10.24b
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is ₹16.27b. The last step is to then divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of ₹286.88. Compared to the current share price of ₹230.15, the company appears about fair value at a 20% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind.
The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Dollar Industries as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 15.4%, which is based on a levered beta of 0.911. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Whilst important, DCF calculation shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For Dollar Industries, I've put together three further aspects you should look at:
1. Financial Health: Does DOLLAR have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does DOLLAR's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of DOLLAR? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NSE every day. If you want to find the calculation for other stocks justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
What Can We Make Of Dynemic Products Limited’s (NSE:DYNPRO) High Return On Capital?
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Today we'll look at Dynemic Products Limited (NSE:DYNPRO) and reflect on its potential as an investment. Specifically, we'll consider its Return On Capital Employed (ROCE), since that will give us an insight into how efficiently the business can generate profits from the capital it requires.
Firstly, we'll go over how we calculate ROCE. Second, we'll look at its ROCE compared to similar companies. Then we'll determine how its current liabilities are affecting its ROCE.
ROCE measures the 'return' (pre-tax profit) a company generates from capital employed in its business. All else being equal, a better business will have a higher ROCE. Ultimately, it is a useful but imperfect metric. Author Edwin Whitingsaysto be careful when comparing the ROCE of different businesses, since 'No two businesses are exactly alike.'
Analysts use this formula to calculate return on capital employed:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
Or for Dynemic Products:
0.23 = ₹264m ÷ (₹1.6b - ₹452m) (Based on the trailing twelve months to March 2019.)
Therefore,Dynemic Products has an ROCE of 23%.
Check out our latest analysis for Dynemic Products
When making comparisons between similar businesses, investors may find ROCE useful. Dynemic Products's ROCE appears to be substantially greater than the 17% average in the Chemicals industry. We consider this a positive sign, because it suggests it uses capital more efficiently than similar companies. Independently of how Dynemic Products compares to its industry, its ROCE in absolute terms appears decent, and the company may be worthy of closer investigation.
When considering this metric, keep in mind that it is backwards looking, and not necessarily predictive. ROCE can be deceptive for cyclical businesses, as returns can look incredible in boom times, and terribly low in downturns. ROCE is only a point-in-time measure. If Dynemic Products is cyclical, it could make sense to check out thisfreegraph of past earnings, revenue and cash flow.
Liabilities, such as supplier bills and bank overdrafts, are referred to as current liabilities if they need to be paid within 12 months. Due to the way the ROCE equation works, having large bills due in the near term can make it look as though a company has less capital employed, and thus a higher ROCE than usual. To check the impact of this, we calculate if a company has high current liabilities relative to its total assets.
Dynemic Products has total liabilities of ₹452m and total assets of ₹1.6b. As a result, its current liabilities are equal to approximately 29% of its total assets. Low current liabilities are not boosting the ROCE too much.
This is good to see, and with a sound ROCE, Dynemic Products could be worth a closer look. Dynemic Products looks strong on this analysis,but there are plenty of other companies that could be a good opportunity. Here is afree listof companies growing earnings rapidly.
For those who like to findwinning investmentsthisfreelist of growing companies with recent insider purchasing, could be just the ticket.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Do Insiders Own Lots Of Shares In Vicore Pharma Holding AB (publ) (STO:VICO)?
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A look at the shareholders of Vicore Pharma Holding AB (publ) (STO:VICO) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.'
Vicore Pharma Holding is not a large company by global standards. It has a market capitalization of kr805m, which means it wouldn't have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about VICO.
See our latest analysis for Vicore Pharma Holding
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
Vicore Pharma Holding already has institutions on the share registry. Indeed, they own 34% of the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Vicore Pharma Holding's earnings history, below. Of course, the future is what really matters.
Vicore Pharma Holding is not owned by hedge funds. There is some analyst coverage of the stock, but it could still become more well known, with time.
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
It seems insiders own a significant proportion of Vicore Pharma Holding AB (publ). It has a market capitalization of just kr805m, and insiders have kr127m worth of shares in their own names. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You canclick here to see if those insiders have been buying or selling.
The general public holds a 22% stake in VICO. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
With an ownership of 28%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.
I like to dive deeperinto how a company has performed in the past. You can accessthisinteractive graphof past earnings, revenue and cash flow, for free.
But ultimatelyit is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look atthis free report showing whether analysts are predicting a brighter future.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Do Institutions Own Vectura Group plc (LON:VEC) Shares?
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A look at the shareholders of Vectura Group plc (LON:VEC) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that have been privatized tend to have low insider ownership.
Vectura Group is a smaller company with a market capitalization of UK£552m, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about VEC.
Check out our latest analysis for Vectura Group
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors own 89% of Vectura Group. This suggests some credibility amongst professional investors. But we can't rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Vectura Group's earnings history, below. Of course, the future is what really matters.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in Vectura Group. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our information suggests that Vectura Group plc insiders own under 1% of the company. It appears that the board holds about UK£842k worth of stock. This compares to a market capitalization of UK£552m. I generally like to see a board more invested. However it might be worth checkingif those insiders have been buying.
The general public, with a 10% stake in the company, will not easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
It's always worth thinking about the different groups who own shares in a company. But to understand Vectura Group better, we need to consider many other factors.
I like to dive deeperinto how a company has performed in the past. You can accessthisinteractive graphof past earnings, revenue and cash flow, for free.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss thisfreereport on analyst forecasts.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Stocks - Oracle, Boeing, Netflix Rise Premarket; Tesla Falls
Investing.com - Stocks in focus in premarket trading on Thursday:
• Oracle (NYSE:ORCL) stock jumped 6.5% by 8:15 AM ET (12:15 GMT) after itsreportedprofit of $1.16 per share was better than expected, as the company benefited from growth in its on-premise IT offerings.
•Tesla (NASDAQ:TSLA) stock fell 0.4% after Goldman lowered its price target to $158 per share from $200, as it seems less likely that upside volume scenarios will be reached, according to CNBC.
• Boeing (NYSE:BA) stock rose 1.3% as it began talks with more airlines for its 737 Max jet, after IAG (LON:ICAG) committed to buying 200 of the grounded models.
• Netflix (NASDAQ:NFLX) stock was up 1.5% after its “Murder Mystery” had the biggest opening ever for a Netflix film, at 30.9 million account holders in the first three days.
• Carnival (NYSE:CCL) Corp stock slumped 7.9% after it lowered its full-year forecasts due to new restrictions on travel to Cuba.
• Hershey Company (NYSE:HSY) stock was unchanged even after it was downgraded to underweight from neutral at Piper Jaffray, according to CNBC.
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Why letting young people plunder their pensions to buy property is a terrible idea
Young people should think of the long-term consequences of dipping into their pension pot. Photo: Getty Housing minister James Brokenshire floated recently the controversial idea that young people should be allowed to raid their pension pots to fund a home deposit as first-time buyers. He’s not the first to do so and he probably won’t be the last. Brokenshire argued in a Policy Exchange speech intended to influence the Conservative party’s leadership contest that this would help aspiring home buyers to make that all-important, first-time purchase in a difficult housing market, where prices relative to incomes are stubbornly high. “It seems rather obtuse that we would deny people the opportunity to do this, given that we know those who own their own home by retirement are on average a) wealthier and b) do not have the burden of the largest expense in retirement—accommodation,” Brokenshire said. “And it is, after all, their money. Not the fund’s, not the state’s, it’s yours, and the next Conservative government should free that capital up, and trust the individual to make the choice for themselves.” It’s not clear exactly how Brokenshire’s idea would work in practice. It could work in a way similar to the 100% mortgage products currently available to first-time buyers, where family members front the deposit in a savings account, which is returned to them after a few years. This would carry risks, such as lower investment returns, but this might be mitigated by the eventual return of the money to the pension pot. But Brokenshire may also have meant it as quite literally dipping into the pension pot to remove the required amount of savings and putting it into home equity. There are several reasons this could be a terrible idea with potentially dreadful consequences for those who were to opt for such a scheme, as well as the wider housing market. Here are some of the main arguments against the proposal. Young people are under-saving for retirement Studies consistently show that, thanks to low incomes and a high cost of living, young people are simply not saving enough for their retirement. Though the auto-enrolment scheme is helping, the low minimum contribution rates for employees and employers put a brake on its success. Story continues Letting young people raid what little they do have saved for a pension to buy property will worsen this unpreparedness problem and leave some facing pensioner poverty. They can’t rely on a state pension top-up Our population is ageing and state pensions are putting a huge strain on the treasury. The state retirement age is being pushed later and later, meaning it will take many more years for today’s young people to be entitled to claim their state pension. And the truth is, it probably won’t be worth much by then anyway, eroded by inflation and rises suppressed by the treasury’s bean counters. So it is imperative that private pensions are sufficiently large to offset this loss and allow today’s young people to retire at a reasonable age. Your home is not a good investment The property market is turbulent and returns are typically not as good as other investments, such as stock market tracker funds. Tying your pension savings up in your property puts your wealth at greater risk because the housing market is volatile. In order to cash in if you need the money for a retirement income, you must sell your home. You might find you’ve lost money because its value has fallen, not to mention the costs of moving, such as stamp duty, if you’re downsizing. It fuels housing demand not supply The fundamental problem in the housing market is a severe shortage of homes. That is why house prices are so high, locking out many aspiring homeowners from the market. This supposed pension savings solution actually worsens that problem by fuelling more demand, pushing prices higher and benefiting existing property owners. It does nothing to address supply-side issues, such as planning reform, and delivering more homes. |
UPDATE 2-Indonesia c.bank cuts bank reserves requirements, say next rate move is down
* Key rate left at 6%, where it's been since Nov
* BI to cut bank reserve requirements to boost liquidity
* BI governor says rate cut a "matter of timing and magnitude"
* Says U.S.-China trade war main issue for global markets
*
* (Adds quotes from economist, details)
By Gayatri Suroyo and Maikel Jefriando
JAKARTA, June 20 (Reuters) - Indonesia's central bank held its policy interest rate unchanged on Thursday, but moved to cut the reserve requirement for banks and said it was now appeared a "matter of timing and magnitude" before it made its first cut in rates since September of 2017.
Bank Indonesia (BI) left its 7-day reverse repurchase rate at 6.00%, in line with the expectations of 19 out of 22 analysts surveyed by Reuters.
Governor Perry Warjiyo said BI would from July lower the reserve requirement for banks by 50 basis points to boost liquidity. The decision came hours after the Federal Reserve said it was ready to battle growing global and domestic economic risks with interest rate cuts beginning as early as next month.
Southeast Asia's biggest economy missed market forecasts for its economic growth in the first quarter due to cooling investment, boosting the case for a rate cut to begin unwinding last year's tightening.
Dovish signals coming from the Fed and other major central banks, along with rate cuts in other emerging market economies will heighten speculation that Indonesia will join a global switch to an easier monetary policy.
Central banks in India, Malaysia and the Philippines have all cut rates this year to boost growth. But like Indonesia, the Philippine held its benchmark rate steady at the end of a policy review on Thursday while also saying there was room to ease.
Bank Indonesia's Warjiyo said: "we have conveyed that we are monitoring two things - global financial market conditions and balance of payments - in considering rate cuts."
"So cutting rates is an action that we will take in the future. It is a matter of time and magnitude," he told BI's monthly policy meeting, adding the main issue currently impacting global markets was the U.S.-China trade war.
The rupiah currency edged up a fraction after the rate announcement, while the main stock index briefly firmed before slipping 0.3%. The yield of the benchmark 10-year government bond was unchanged at 7.482%.
Last year, between May and November, BI raised the benchmark six times by a total of 175 basis points to support the rupiah in the wake of U.S. rate hikes by the Fed.
LIQUIDITY INJECTION
Warjiyo said economic growth was currently on track to be below the midpoint of its 5.0%-5.4% outlook.
He said efforts were needed to support domestic consumption and said there was room to boost credit growth, noting the cut in reserve requirements would give the banking system 25 trillion rupiah ($1.8 billion) of liquidity that they could use to lend to customers.
Finance Minister Sri Mulyani Indrawati last week told parliament the government's 5.3% GDP growth target for this year may not be achieved due to slowing global growth, though she vowed to try to reach it.
Andry Asmoro, chief economist Bank Mandiri, said there now appeared to be room for BI to cut its benchmark by 25 bps in the third quarter, "sooner than our previous expectation, which was in Q419."
He said this would hinge on relatively low and stable inflation, an improving domestic investment climate, a shrinking current account deficit and a stable rupiah.
The annual inflation rate accelerated in May to 3.32% on the back of Ramadan festivities spending, but was still comfortably within BI's 2.5%-4.5% target range.
Warjiyo said BI still sees the current account deficit in a range of 2.5%-3%. The central bank and the government have targeted a reduction to 2.5% from the 3% gap posted in 2018.
The current account deficit is a source of vulnerability for Southeast Asia's largest economy because it relies on portfolio investment to fund it. ($1 = 14,175.0000 rupiah) (Additional reporting by Fransiska Nangoy and Tabita Diela; Editing by Ed Davies & Simon Cameron-Moore) |
Estimating The Intrinsic Value Of Vidhi Specialty Food Ingredients Limited (NSE:VIDHIING)
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In this article we are going to estimate the intrinsic value of Vidhi Specialty Food Ingredients Limited (NSE:VIDHIING) by projecting its future cash flows and then discounting them to today's value. This is done using the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple!
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
Check out our latest analysis for Vidhi Specialty Food Ingredients
We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To start off with, we need to estimate the next ten years of cash flows. Seeing as no analyst estimates of free cash flow are available to us, we have extrapolate the previous free cash flow (FCF) from the company's last reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today's value:
[{"": "Levered FCF (\u20b9, Millions)", "2019": "\u20b9297.61", "2020": "\u20b9328.22", "2021": "\u20b9359.28", "2022": "\u20b9391.22", "2023": "\u20b9424.43", "2024": "\u20b9459.26", "2025": "\u20b9496.04", "2026": "\u20b9535.09", "2027": "\u20b9576.69", "2028": "\u20b9621.14"}, {"": "Growth Rate Estimate Source", "2019": "Est @ 11.46%", "2020": "Est @ 10.28%", "2021": "Est @ 9.46%", "2022": "Est @ 8.89%", "2023": "Est @ 8.49%", "2024": "Est @ 8.21%", "2025": "Est @ 8.01%", "2026": "Est @ 7.87%", "2027": "Est @ 7.78%", "2028": "Est @ 7.71%"}, {"": "Present Value (\u20b9, Millions) Discounted @ 15.84%", "2019": "\u20b9256.92", "2020": "\u20b9244.61", "2021": "\u20b9231.15", "2022": "\u20b9217.29", "2023": "\u20b9203.50", "2024": "\u20b9190.10", "2025": "\u20b9177.25", "2026": "\u20b9165.06", "2027": "\u20b9153.57", "2028": "\u20b9142.80"}]
Present Value of 10-year Cash Flow (PVCF)= ₹1.98b
"Est" = FCF growth rate estimated by Simply Wall St
We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 10-year government bond rate of 7.6%. We discount the terminal cash flows to today's value at a cost of equity of 15.8%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = ₹621m × (1 + 7.6%) ÷ (15.8% – 7.6%) = ₹8.1b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= ₹₹8.1b ÷ ( 1 + 15.8%)10= ₹1.85b
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is ₹3.84b. The last step is to then divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of ₹77.08. Compared to the current share price of ₹68.25, the company appears about fair value at a 11% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.
We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Vidhi Specialty Food Ingredients as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 15.8%, which is based on a levered beta of 0.964. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Although the valuation of a company is important, it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For Vidhi Specialty Food Ingredients, There are three further factors you should further research:
1. Financial Health: Does VIDHIING have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of VIDHIING? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. Simply Wall St updates its DCF calculation for every IN stock every day, so if you want to find the intrinsic value of any other stock justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
The Verditek (LON:VDTK) Share Price Has Gained 26% And Shareholders Are Hoping For More
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These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But you can significantly boost your returns by picking above-average stocks. To wit, theVerditek plc(LON:VDTK) share price is 26% higher than it was a year ago, much better than the market return of around -3.1% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! Verditek hasn't been listed for long, so it's still not clear if it is a long term winner.
View our latest analysis for Verditek
With zero revenue generated over twelve months, we don't think that Verditek has proved its business plan yet. As a result, we think it's unlikely shareholders are paying much attention to current revenue, but rather speculating on growth in the years to come. It seems likely some shareholders believe that Verditek will significantly advance the business plan before too long.
As a general rule, if a company doesn't have much revenue, and it loses money, then it is a high risk investment. You should be aware that there is always a chance that this sort of company will need to issue more shares to raise money to continue pursuing its business plan. While some companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing.
Verditek had liabilities exceeding cash by UK£68,407 when it last reported in June 2018, according to our data. That puts it in the highest risk category, according to our analysis. So the fact that the stock is up 26% in the last year shows that high risks can lead to high rewards, sometimes. It's clear more than a few people believe in the potential. You can see in the image below, how Verditek's cash levels have changed over time (click to see the values).
Of course, the truth is that it is hard to value companies without much revenue or profit. One thing you can do is check if company insiders are buying shares. It's usually a positive if they have, as it may indicate they see value in the stock. Luckily we are in a position to provide you with thisfreechart of insider buying (and selling).
Verditek shareholders should be happy with thetotalgain of 26% over the last twelve months. A substantial portion of that gain has come in the last three months, with the stock up 46% in that time. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. Shareholders might want to examinethis detailed historical graphof past earnings, revenue and cash flow.
Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Airbus demands chance to bid for IAG's surprise Boeing 737 MAX order
By Eric M. Johnson and Tim Hepher
PARIS (Reuters) - Airbus called on Thursday for a chance to compete for a blockbuster plane order by British Airways owner IAG, which stunned industry executives at this week's Paris Airshow by ordering 200 of Boeing's grounded 737 MAX.
Airbus announced a new version of its best-selling A321 with close to 240 orders and commitments in Paris, only to see its grip on IAG's European short-haul networks damaged by the Boeing deal which analysts said shores up the embattled 737 MAX.
Boeing's top-selling aircraft has been taken out of service worldwide since an Ethiopian Airlines 737 MAX crashed in March, five months after a Lion Air 737 MAX plunged into the sea off Indonesia. A total of 346 people died in the two disasters.
Tuesday's blockbuster order, worth more than $24 billion at list prices, was partly seen as an effort to preserve competition between planemakers, damaged by the three-month-old grounding crisis. But it jolted Airbus which was caught unawares after signing a smaller order for A321XLRs with IAG.
Wrapping up the world's largest air show on Thursday, Airbus publicly voiced its frustration over the deal and urged IAG to run a competition for the planes, which would be deployed at Vueling, Iberia, Aer Lingus, Level and part of BA.
"We would like a chance to compete for that business," Chief Commercial Officer Christian Scherer told reporters, adding that IAG had not issued a formal tender for the narrow-body order.
IAG was not immediately available for comment, but said earlier in the week that it did not comment on negotiations.
Boeing declined comment.
FRAYED TRUCE
The shock announcement of a tentative order for 200 737 MAX jets from IAG stunned the industry and frayed an unusual PR truce between the world's largest planemakers after Airbus had publicly supported Boeing over the grounding.
Commercial rivalry remains fierce, with Airbus launching its A321XLR - a longer-range version of its A321 - to try to reduce the space left for Boeing as it draws up designs for a new 220-270-seater in the so-called middle of the jet market.
Airbus reported 383 orders and commitments including 239 for the A321XLR. Boeing's firm and tentative orders came to 247. Both are suffering from slower in demand after a long upswing.
Shares in both companies rose less than 1 percent.
Airbus announced a last-minute order for 13 of the XLR jets from U.S. budget carrier JetBlue Airways, which is expanding into the cut-throat transatlantic market, joining a varied list of backers including American Airlines.
Airbus hopes to derail Boeing's plans for a mid-market jet in a gap between traditional narrow-body and wide-body jets by dominating the lower end, where its A321 outsells Boeing.
But it is more vulnerable at the top end where its A330neo wide-body jet is up against tough competition from the newer Boeing 787. Airbus grabbed key orders from Philippines carrier Cebu Air and Virgin Atlantic, while Korean Air took 20 787s.
Yet the biggest issue hovering over the show was the grounding of the MAX, which secures supplier profits for the next decade, while on the defence side of the show a Franco-German pairing and Turkey each unveiled new fighter designs.
The IAG deal marked a psychological turning point for the five-decade-old 737 series though Boeing avoided wading into the traditional ding-dong with Airbus over who won the show, as it strikes a more sombre tone than usual following the crashes.
Boeing did, however, say it was in talks with other airlines for sales of its 737 MAX after the IAG deal.
Senior Vice-President Ihssane Mounir dismissed the A321XLR as suitable for only a "sliver" of the market that Boeing hopes to win with its proposed all-new mid-market plane.
The two sides also traded blows over competition for wide-body jets, with each scoring key wins in Asia.
Boeing had opened the show on a subdued note with apologies over lives lost in the MAX crashes. It suffered a further setback when General Electric disclosed a delay of months in supplying engines for the new 777X wide-body aircraft.
Mounir said he still expected the world's largest twin-engined plane to fly this year and to be delivered in 2020.
(Additional reporting by Alistair Smout, Andrea Shalal; Editing by Keith Weir/Alexander Smith/David Evans) |
Do Insiders Own Shares In Vijay Shanthi Builders Limited (NSE:VIJSHAN)?
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Every investor in Vijay Shanthi Builders Limited (NSE:VIJSHAN) should be aware of the most powerful shareholder groups. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Warren Buffett said that he likes 'a business with enduring competitive advantages that is run by able and owner-oriented people'. So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.
With a market capitalization of ₹140m, Vijay Shanthi Builders is a small cap stock, so it might not be well known by many institutional investors. In the chart below below, we can see that institutions are not really that prevalent on the share registry. We can zoom in on the different ownership groups, to learn more about VIJSHAN.
Check out our latest analysis for Vijay Shanthi Builders
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
Since institutions own under 5% of Vijay Shanthi Builders, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.
We note that hedge funds don't have a meaningful investment in Vijay Shanthi Builders. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our most recent data indicates that insiders own the majority of Vijay Shanthi Builders Limited. This means they can collectively make decisions for the company. That means they own ₹75m worth of shares in the ₹140m company. That's quite meaningful. It is good to see this level of investment. You cancheck here to see if those insiders have been buying recently.
The general public, with a 42% stake in the company, will not easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.
I like to dive deeperinto how a company has performed in the past. You can findhistoric revenue and earnings in thisdetailed graph.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss thisfreelist of interesting companies, backed by strong financial data.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
What to Watch: Bank of England rates, EU top jobs, Tory leadership
Bank of England governor Mark Carney. Photo: Matt Dunham/ Pool/ AP Photo Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad: The Bank of England’s interest rates decision At noon (BST), the Bank of England will publish the minutes of its latest Monetary Policy Committee meeting and its decision on interest rates. The bank is widely expected to leave interest rates unchanged , even though it may try to convince investors that rate hikes are around the corner. But analysts think hikes are unlikely until there is a resolution to the seemingly never-ending Brexit debacle. The US Federal Reserve on Wednesday opened the door to a rate cut in 2019, noting that it had to “act as appropriate” to sustain economic growth. That followed suggestions on Monday by European Central Bank chief Mario Draghi that his bank could expand its stimulus programme. The big week for central banking continues “in theory” with the Bank of England’s Thursday decision, said Connor Campbell, an analyst with Spreadex, in a note. “In practice it might be a bit bland in comparison with what has been produced by its US and Eurozone peers. Mark Carney and co’s hands are still tied by Brexit.” Tories decide on the final two The four remaining candidates in the Conservative Party leadership contest — Boris Johnson, Jeremy Hunt, Michael Gove, and Sajid Javid — will be whittled down to the final two on Thursday. Boris Johnson is all but guaranteed to come out on top once again. On Wednesday, only a handful of votes separated Hunt and Gove, meaning that the battle for second place seems like a wide open contest. The contest has now very much taken a hard Brexit direction. Nevertheless, the pound made some gains on Wednesday, reaching $1.27 against the dollar. It was up further in early trading, by 0.6% against the dollar ( GBPUSD=X ) and by 0.02% against the euro ( GBPEUR=X ). “Brexit is keeping the lid on sterling’s gains – the prospect of Boris Johnson taking Britain out of the EU come 31 October is a risk,” said Neil Wilson, an analyst with Markets.com. Story continues Australia’s Resolute Mining lists in London Australia’s Resolute Mining ( RSG.L ) began trading on the London Stock Exchange on Thursday — part of its ambition to attract a broader base of investors and become a pan-African gold producer. It comes at a time when new entrants to the London Stock Exchange are few and far between, mainly as a result of Brexit-related uncertainty. Gold prices spiked in early trading on Thursday following the US Federal Reserve’s latest pronouncements. Spot gold prices climbed to levels not seen in five years, while gold futures hit $1,385.30 per ounce ( GC=F ). Dixons Carphone reported a steep profit decline The UK’s largest seller of electrical products and mobile phones, Dixons Carphone ( DC.L ), reported on Thursday that pre-tax profits had slumped 22% to £298m. It said that profits would fall further in its 2020 financial year, to £210m. CEO Alex Baldock said the UK mobile market was changing faster that it expected, but that it had renegotiated its legacy network contracts and that it was developing new customer offers and accelerating the integration of its business. Shares in the company declined 18% on Thursday. European markets climbed Stocks in Europe followed their peers in Asia, with the Federal Reserve’s dovish stance having a knock-on effect across global markets. The FTSE 100 ( ^FTSE ) jumped by 0.19% in early trading. Germany’s DAX ( ^GDAXI ) made bigger gains, of 0.78%, while France’s CAC 40 ( ^FCHI ) climbed by 0.60%. What to expect in the US Slack, the makers of the workplace chat application, debuts on the New York Stock Exchange with a direct listing. Shares will start trading at $26 per share. US stock futures are pointing to a higher open. S&P 500 futures ( ES=F ) are up 0.6%, Dow Jones Industrial Average futures ( YM=F ) are up by 0.52%, and Nasdaq futures ( NQ=F ) are up by 0.96%. |
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