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European Equities: German Business Confidence and Geopolitics in Focus
• German IFO Current Conditions /German IFO Expectations /German IFO Business Climate
• GfK German Consumer Climate (Jul)Thursday, 27thJune
• Spanish HICP (YoY) (Jun)
• Eurozone Business Confidence
• German CPI (MoM) (Jun) Prelim
• French Consumer Spending (MoM) (May)
• French CPI (MoM) (June) Prelim
• French HICP (MoM) (June) Prelim
• Spanish GDP (QoQ) (Q1)
• Italian CPI (MoM) (Jun) Prelim
• Eurozone Core CPI (YoY) (Jun) Prelim
• Eurozone CPI (YoY) (Jun) Prelim
The European majors ended the week on the back foot. The DAX30 and CAC40 both fell by 0.13%, while the EuroStoxx600 fell by 0.36%.
It was a bullish week, however. The CAC40 led the way, rallying by 2.99% with the DAX30 ending the week up by 2.01%. The EuroStoxx600 trailed with a 1.57% gain.
News of a planned meeting between Trump and Xi at the coming week’s G20 Summit provided support through the week.
Adding to the upside was a dovish FED and some ECB President jawboning mid-week. 7 FOMC members projected 2 rate cuts for the year. ECB President Draghi also assured the markets of ECB support should inflationary pressures fail to build.
Rising tensions between the U.S and Iran weighed on risk appetite at the end of the week, however. News of Trump pulling out from a military strike on Iran at the 11thhour raised the prospects of military action in the near-term.
A lack of support from allies left the U.S President isolated, with few world leaders wanting to be embroiled in a conflict with Iran.
Trump has now promised tougher sanctions to bring the country to its knees. It remains to be seen how Iran responds…
Economic data out of the Eurozone was on the heavier side on Friday.
June prelim private sector PMI numbers provided some direction in the early part of the day.
The numbers were skewed to the positive side on Friday.
The Eurozone’s manufacturing PMI rose from 47.7 to 47.8, with the services sector rising from 55.4 to 55.6. The upward trends led to the composite rising from 51.8 to 52.1. According to the latestEurozone Markit Composite,
• While growth remained weak, the prelim PMI hit a 7-month high in June.
• The service sector PMI activity index hit a 7-month high, while the manufacturing PMI output index hit a 2-month low.
• In spite of the 2-month low, the manufacturing PMI hit a 2-month high.
• While private sector activity picked up, optimism fell to its lowest level since late-2014.
• Export orders for both goods and services fell to the weakest level since January.
• On the positive labor market conditions improved.
From the U.S, the private sector PMI figures were less impressive. The services sector PMI fell from 50.9 to 50.7, with the manufacturing PMI falling from 50.5 to 50.1.
In spite of the negative sentiment towards the economic outlook, housing sector data was on the positive side. Existing homes sales rose by 2.5% in May, with falling mortgage rates providing support. 30-year fixed rates fell from 4.14% to 3.99% through the month.
From the DAX, Wirecard led the way on the day, rising by just 0.67%. Continental ended the day flat from the auto sector, while BMW (-0.67%), Daimler (-0.41%), and Volkswagen (-0.24%) saw red on the day.
The banking sector saw red on the day, with Deutsche Bank and Commerzbank falling by 0.66% and by 0.18% respectively.
From the CAC, BNP Paribas slid by 0.89%, with Credit Agricole ending the day down by 0.62%. From the auto sector, Renault found strong support, rallying by 2.37% to buck the trend on the day.
It’s a relatively quiet day ahead on the economic calendar. There are no material stats due out of the U.S, leaving the markets to focus on German business sentiment figures.
If the prelim Composite PMI is anything to go by, the IFO Business Climate Index could surprise this morning. According to theMarkit survey, while German service sector confidence fell to the lowest level since October 2014 confidence across the manufacturing sector improved in June.
Outside of the stats, any rising tensions between the U.S and Iran will need to be considered along with any chatter on trade.
At the time of writing, the DAX was down by 45 points. The Dow Mini was up by 51 points.
Thisarticlewas originally posted on FX Empire
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Have Insiders Been Buying Dacian Gold Limited (ASX:DCN) Shares This Year?
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It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares inDacian Gold Limited(ASX:DCN).
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia Universitystudyfound that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
View our latest analysis for Dacian Gold
Non-Executive Director Barry Patterson made the biggest insider purchase in the last 12 months. That single transaction was for AU$980k worth of shares at a price of AU$0.49 each. So it's clear an insider wanted to buy, at around the current price, which is AU$0.59. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Dacian Gold insider decided to buy shares at close to current prices. The only individual insider to buy over the last year was Barry Patterson.
The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at thisfreelist of companies. (Hint: insiders have been buying them).
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Dacian Gold insiders own about AU$16m worth of shares. That equates to 12% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Dacian Gold we think they are probably pretty confident of a bright future. Therefore, you should should definitely take a look at thisFREEreport showing analyst forecasts for Dacian Gold.
Of courseDacian Gold may not be the best stock to buy. So you may wish to see thisfreecollection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
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 Like EPS Growth Then Check Out Dev Information Technology (NSE:DEVIT) Before It's Too Late
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Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. But as Warren Buffett has mused, 'If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.' When they buy such story stocks, investors are all too often the patsy.
So if you're like me, you might be more interested in profitable, growing companies, likeDev Information Technology(NSE:DEVIT). Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.
View our latest analysis for Dev Information Technology
If a company can keep growing earnings per share (EPS) long enough, its share price will eventually follow. It's no surprise, then, that I like to invest in companies with EPS growth. We can see that in the last three years Dev Information Technology grew its EPS by 13% per year. That's a good rate of growth, if it can be sustained.
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. While we note Dev Information Technology's EBIT margins were flat over the last year, revenue grew by a solid 12% to ₹776m. That's a real positive.
In the chart below, you can see how the company has grown earnings, and revenue, over time. For finer detail, click on the image.
Dev Information Technology isn't a huge company, given its market capitalization of ₹486m. That makes it extra important to check on itsbalance sheet strength.
Personally, I like to see high insider ownership of a company, since it suggests that it will be managed in the interests of shareholders. So as you can imagine, the fact that Dev Information Technology insiders own a significant number of shares certainly appeals to me. Indeed, with a collective holding of 75%, company insiders are in control and have plenty of capital behind the venture. To me this is a good sign because it suggests they will be incentivised to build value for shareholders over the long term. Valued at only ₹486m Dev Information Technology is really small for a listed company. That means insiders only have ₹362m worth of shares, despite the large proportional holding. That might not be a huge sum but it should be enough to keep insiders motivated!
One positive for Dev Information Technology is that it is growing EPS. That's nice to see. If that's not enough on its own, there is also the rather notable levels of insider ownership. The combination sparks joy for me, so I'd consider keeping the company on a watchlist. 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 Dev Information Technology is trading on a high P/E or a low P/E, relative to 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. |
Exonerated Central Park Five Receive Standing Ovation At BET Awards
The exonerated five stand strong at the 2019 #BETAwards ! ✊🏾 pic.twitter.com/AyI3Q9DSnx — BET (@BET) June 24, 2019 The Central Park Five took center stage at the 2019 BET Awards on Sunday. Host Regina Hall introduced Antron McCray, Yusef Salaam, Raymond Santana Jr., Korey Wise and Kevin Richardson as the “exonerated five” at the 19th annual ceremony. Raymond Santana Jr., Kevin Richardson, Antron McCray, Korey Wise and Yusef Salaam -- aka the Central Park Five -- attend the 2019 BET Awards. (Photo: Leon Bennett via Getty Images) Audience members rose to their feet to cheer on the men, who each took a turn at the microphone to deliver a message about the power of truth in the face of injustice. “We are all on an individual journey in life. We don’t know where our journeys will take us or how they will collide with others,” they said. “I didn’t know that one day would bond me to these men for the rest of our lives. But I know that in telling our truth, our lives have been changed forever. Your truth is the foundation your legacy will be built upon. Your truth will be the memories people keep long after you’re gone.” McCray wore a T-shirt featuring each of their names and Santana Jr. wore one that prominently displayed his mugshot. The men, who were just teenagers at the time, were falsely accused and wrongfully convicted of attacking and raping a white woman jogging in New York City’s Central Park 30 years ago. After serving sentences that varied from six to 13 years, the men were exonerated in 2002 due to new DNA evidence and a confession from serial rapist and murderer Matias Reyes. The charges were subsequently dropped and the five men were awarded $41 million from the city in 2014. Their story has received renewed attention this month thanks to Ava DuVernay’s four-part Netflix series “When They See Us,” which documents their arrests and convictions, as well as the fallout from the case, in harrowing detail. Story continues DuVernay, like many people watching the awards show at home, tweeted in support of the men. ✊🏾✊🏾✊🏾✊🏾✊🏾 #BETAwards #WhenTheySeeUs We see you, brothers. We see you. https://t.co/A7Ty9MFBCS — Ava DuVernay (@ava) June 24, 2019 Related Coverage 'Central Park Five' Prosecutor Drops Columbia Law Teaching Post Amid Backlash Donald Trump Insists People Are On 'Both Sides' Of Exonerated Central Park 5 Case Ava DuVernay Isn't Surprised Trump Won't Apologize To Central Park Five Love HuffPost? Become a founding member of HuffPost Plus today. This article originally appeared on HuffPost . |
German Business Confidence and Iran Put the EUR and USD in Focus
There were no material stats released through the Asian session this morning to provide the majors with direction.
Market reaction to softer economic indicators out of the U.S, concerns over rising tensions in the Middle East, and sentiment towards this week’s G20 Summit provided direction on the day.
At the time of writing, theJapanese Yenwas down by 0.07% to ¥107.39 against the U.S Dollar.
TheAussie Dollarwas up by 0.36% to $0.6951, while theKiwi Dollarwas up by 0.05% to $0.6592.
It’s a relatively busy day ahead for the EUR.
Germany’s June IFO Business Climate Index and sub-indexes will provide the EUR with direction later this morning.
Following Germany’s private sector PMI numbers, optimism within the manufacturing sector improved, while service sector optimism slid. While forecasts are EUR negative, improved optimism in the manufacturing sector could limit any downside.
Outside of the stats, geopolitical risk will need to be factored in. In spite of rising tension between the U.S and Iran, Trump’s decision to hold back a military strike should support the EUR on the day.
At the time of writing, theEURwas up by 0.07% to $1.1377.
It’s a quiet day ahead, with no material stats due out of the UK.
With no material stats due out of the UK, the focus will remain on Parliament.
Will there be any fallout from Boris Johnson’s domestic woes? Expect the EU to continue to give their 10 cents worth in a bid to influence the outcome of the leadership race.
Few member states are likely to want Johnson to take the top spot, though an unwillingness to negotiate does suggest that a no deal Brexit is the only option should the Tories hold onto their very limited power.
At the time of writing, thePoundwas up by 0.05% to $1.2744.
It’s a quiet day for the Greenback.
There are no material stats due out of the U.S.
The Greenback has taken a hiding in recent days and barring the threat of military action against Iran, a lack of stats today will limit any upside.
Any positive chatter ahead of the Trump – Xi G20 Summit meet would be Dollar positive. It would be unusual, however, if past performance has anything to go by. The U.S President tends to favor threatening remarks ahead of any meetings.
At the time of writing, theDollar Spot Indexwas down by 0.07% to 96.153.
There are no material stats due out of Canada.
Market sentiment towards the U.S – Iran relations, or lack of, will likely be the key driver on the day.
It’s a busy week ahead for the Loonie, but there are also a number of possible curveballs for the markets to consider.
TheLooniewas up by 0.20% to C$1.3196, against the U.S Dollar, at the time of writing.
Thisarticlewas originally posted on FX Empire
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BET Awards 2019: Rihanna Presents Mary J. Blige With Lifetime Achievement Award
Mary J. Blige 's incredible career was honored at the 2019 BET Awards . Rihanna took the stage to present her with the Lifetime Achievement Award, where she said the singer "changed the game with her unique sound and that Mary J. Blige style." "Mary J. Blige, you have set the bar for relatable, timeless, classic music," she continued. "You opened multiple doors for female artists in this industry. And on behalf of all the women that came after you, like myself, thank you for being you so we can feel comfortable being ourselves. Thank you for pouring yourself into every track and giving us a song for every feeling. Thank you for showing us that love is all that we need. But we didn't know how much we needed you." When Blige, 48, took the stage, she told those in attendance, "Wow, thank you so much," telling Rihanna, "You inspire me right back. ...I want to thank my BET family for all the love along the way." She later told her fans, "Words cannot express what your support means to me." Blige also briefly touched upon her spirituality, saying, "Although I'm a leader, a queen, a living legend... Although I'm all these things, I'm a servant as well and I'm here to serve. Being a servant is not always glamorous or popular, but it's the job and the assignment that I was given. Because in order to become an authority, I had to come under authority. It's because, when the glory is placed on me, I give it back to God." Afterward, she performed a medley of her hits including "My Life," "Share My World," "No Drama" and "I'm Going Down." Lil' Kim also came out to help her perform a snippet of "I Can Love You." And she performed "You're All I Need" with Method Man, who also joined her on stage. Speaking with ET backstage afterward, she proclaimed, "Oh my god, it was like a concert. BET, we are home." Story continues She followed up by stating that the performance was filled with "nostalgia." However, she added, "And we still fresh and new too!" While on the red carpet prior to the show, she spoke with ET's Kevin Frazier about the honor and the road that brought her to this moment. "It means so much to me, I mean...to be alive, to have lived through so much," she said while talking about the award. "A lot of times didn't think we were gonna make it but I'm here, you know, I worked hard… I had some triumphs. I had some trials. But my fans have been there the whole time, so I'm here to celebrate all of us." She also briefly touched upon learning to let go along the way, stating: "I just learned that you have to release people from their mistakes. You have to have the courage to do that and the strength to do that, so that you can be free and not have poison in you... I didn't look back. I just said, 'Hey, all right, it's over.' Everyone's not going on the journey. Everyone's not taking the ride." Blige's many accomplishments include eight multi-platinum albums, nine GRAMMY Awards, four American Music Awards and 12 Billboard Music Awards. Often called the "Queen of Hip-Hop Soul," she's also starred in a number of films, including 2012's Rock of Ages and 2017's Mudbound . She received both an Academy Award and a Golden Globe nomination for Best Supporting Actress for her role as a family matriarch in Mudbound , a critically acclaimed period drama. Last March, Beyonce and JAY-Z hosted an Oscars after-party at the Chateau Marmont in West Hollywood to honor Blige, and the star-studded guest list included Leonardo DiCaprio, Drake, Tracee Ellis Ross and Tiffany Haddish. Last January, Blige received a star on the Hollywood Walk of Fame and acknowledged that it wasn't always a smooth road to get to where she is today. "There have been times in my career when I didn't even want to step out of my house because I was hurt so bad," she said during her acceptance speech. "But God gave me the strength." ET spoke with Blige at the ceremony, where she shared her advice for her younger self. "You're beautiful, love yourself," she said. "People love you." Watch the video below for more: RELATED CONTENT: Mary J. Blige and Kendu Isaacs Are Officially Divorced Inside Beyonce and JAY Z's Epic Oscars After Party Honoring Mary J. Blige Mary J. Blige Confirms Party Thrown by Beyonce, JAY-Z: 'We Have the Fam Doing Something Big' (Exclusive) Related Articles: Hollywood Bikini Bods Over 40 Biggest Celebrity Breakups of 2019 -- So Far! Celebrities in Their Underwear |
Dreamscape Networks Limited (ASX:DN8): What Does Its Beta Value Mean For Your Portfolio?
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! If you're interested in Dreamscape Networks Limited ( ASX:DN8 ), then you might want to consider its beta (a measure of share price volatility) in order to understand how the stock could impact your portfolio. Volatility is considered to be a measure of risk in modern finance theory. Investors may think of volatility as falling into two main categories. 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 second sort is caused by the natural volatility of markets, overall. For example, certain macroeconomic events will impact (virtually) all stocks on the market. Some stocks see their prices move in concert with the market. Others tend towards stronger, gentler or unrelated price movements. Beta can be a useful tool to understand how much a stock is influenced by market risk (volatility). However, Warren Buffett said 'volatility is far from synonymous with risk' in his 2014 letter to investors. So, while useful, beta is not the only metric to consider. To use beta as an investor, you must first understand that the overall market has a beta of 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. View our latest analysis for Dreamscape Networks What DN8's beta value tells investors Looking at the last five years, Dreamscape Networks has a beta of 1.2. The fact that this is well above 1 indicates that its share price movements have shown sensitivity to overall market volatility. If the past is any guide, we would expect that Dreamscape Networks shares will rise quicker than the markets in times of optimism, but fall faster in times of pessimism. Beta is worth considering, but it's also important to consider whether Dreamscape Networks is growing earnings and revenue. You can take a look for yourself, below. Story continues ASX:DN8 Income Statement, June 24th 2019 How does DN8's size impact its beta? With a market capitalisation of AU$52m, Dreamscape Networks is a very small company by global standards. It is quite likely to be unknown to most investors. It takes less money to influence the share price of a very small company. This may explain the excess volatility implied by this beta value. What this means for you: Since Dreamscape Networks tends to moves up when the market is going up, and down when it's going down, potential investors may wish to reflect on the overall market, when considering the stock. In order to fully understand whether DN8 is a good investment for you, we also need to consider important company-specific fundamentals such as Dreamscape Networks’s financial health and performance track record. I urge you to continue your research by taking a look at the following: Future Outlook : What are well-informed industry analysts predicting for DN8’s future growth? Take a look at our free research report of analyst consensus for DN8’s outlook. Financial Health : Are DN8’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here . Other High-Performing Stocks : Are there other stocks that provide better prospects with proven track records? Explore our free 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 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. |
What Kind Of Shareholder Appears On The Dollar Industries Limited's (NSE:DOLLAR) Shareholder Register?
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Every investor in Dollar Industries Limited (NSE:DOLLAR) should be aware of the most powerful shareholder groups. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. 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.'
With a market capitalization of ₹14b, Dollar Industries is a small cap stock, so it might not be well known by many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about DOLLAR.
Check out our latest analysis for Dollar Industries
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
As you can see, institutional investors own 11% of Dollar Industries. 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 Dollar Industries's earnings history, below. Of course, the future is what really matters.
Dollar Industries is not owned by hedge funds. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders own a reasonable proportion of Dollar Industries Limited. Insiders own ₹2.1b worth of shares in the ₹14b company. 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, with a 14% stake in the company, will not easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Our data indicates that Private Companies hold 60%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
It's always worth thinking about the different groups who own shares in a company. But to understand Dollar Industries better, we need to consider many other factors.
Many find it usefulto take an in depth look at how a company has performed in the past. You can accessthisdetailed graphof past earnings, revenue and cash flow.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can checkthis free report showing analyst forecasts for its 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. |
How Much Are DFM Foods Limited (NSE:DFM) Insiders Taking Off The Table?
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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares inDFM Foods Limited(NSE:DFM).
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
Check out our latest analysis for DFM Foods
While there weren't any large insider transactions in the last twelve months, it's still worth looking at the trading.
Mohit Satyanand divested 13371 shares over the last 12 months at an average price of ₹261. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like DFM Foods better if I see some big insider buys. While we wait, check out thisfreelist of growing companies with considerable, recent, insider buying.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. DFM Foods insiders own about ₹2.6b worth of shares. That equates to 22% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
An insider sold DFM Foods shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But since DFM Foods is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. Therefore, you should should definitely take a look at thisFREEreport showing analyst forecasts for DFM Foods.
But note:DFM Foods may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
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 We Be Delighted With D. P. Abhushan Limited's (NSE:DPABHUSHAN) ROE Of 22%?
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One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. By way of learning-by-doing, we'll look at ROE to gain a better understanding of D. P. Abhushan Limited (NSE:DPABHUSHAN).
Over the last twelve monthsD. P. Abhushan has recorded a ROE of 22%. One way to conceptualize this, is that for each ₹1 of shareholders' equity it has, the company made ₹0.22 in profit.
See our latest analysis for D. P. Abhushan
Theformula for return on equityis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for D. P. Abhushan:
22% = ₹118m ÷ ₹529m (Based on the trailing twelve months to March 2019.)
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. You can calculate shareholders' equity by subtracting the company's total liabilities from its total assets.
ROE measures a company's profitability against the profit it retains, and any outside investments. 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. That means ROE can be used to compare two businesses.
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. Pleasingly, D. P. Abhushan has a superior ROE than the average (7.1%) company in the Specialty Retail industry.
That's clearly a positive. I usually take a closer look when a company has a better ROE than industry peers. One data point to check is ifinsiders have bought shares recently.
Most companies need money -- from somewhere -- to grow their profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the case of the first and second options, the ROE will reflect this use of cash, for growth. 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.
It's worth noting the significant use of debt by D. P. Abhushan, leading to its debt to equity ratio of 1.84. while its ROE is respectable, it is worth keeping in mind that there is usually a limit to how much debt a company can use. Debt increases risk and reduces options for the company in the future, so you generally want to see some good returns from using it.
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.
Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. Profit growth rates, versus the expectations reflected in the price of the stock, are a particularly important to consider. So I think it may be worth checking thisfreethisdetailed graphof past earnings, revenue and cash flow.
Of courseD. P. Abhushan 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. |
BET Awards 2019: Watch Rihanna Honor Mary J. Blige With Lifetime Achievement Award
Mary J. Blige received the lifetime achievement honor at tonight’s BET Awards ceremony, broadcasting from the Microsoft Theater in Los Angeles. Rihanna was on hand to bestow the honor. “Mary J. Blige, you have set the bar for relatable, timeless, classic music. You opened multiple doors for female artists in this industry,” Rihanna said. “On behalf of all the women who came after you like myself, thank you for being you so we can be comfortable being ourselves.” Watch an excerpt of Rihanna’s speech below, and watch the entire thing here . When Blige took the stage, she turned to Rihanna and said, “You inspire me right back, so thank you.” Following her speech, Blige performed a medley featuring some of her biggest songs, including “My Life,” “No More Drama,” “Real Love,” “I’m Goin’ Down,” “Reminisce,” “Be Happy,” “You Remind Me,” “Love No Limit,” and more. During “I Can Love You,” Lil Kim came out. Method Man joined her for “You’re All I Need.” Watch the full performance below. Previous BET lifetime achievement honorees include Prince, James Brown, Whitney Houston, and Diana Ross. Mary J. Blige’s last studio LP was 2017’s Strength of a Woman , which featured “ Love Yourself ,” Blige’s joint track with Kanye West . Since that album, Blige has shared one-off single “ Only Love ,” as well as “ Thriving ” with Nas . Blige and Nas kick off a co-headlining tour later this summer. See the video. Originally Appeared on Pitchfork |
Gold climbs towards six-year peak on dovish central banks, Iran tensions
By Sethuraman N R
(Reuters) - Gold climbed on Monday towards the near six-year high reached in the previous session, driven by dovish signals from global central banks and increased tensions between the United States and Iran.
Spot gold was up 0.5% at $1,405 an ounce by 1240 GMT, heading for a fifth straight session of gains. Gold prices hit $1,410.78 on Friday, their highest since Sept. 4, 2013. U.S. gold futures rose 0.7% to $1,410 an ounce.
"The weakness of the U.S. dollar, gold's technical picture and interest from investors themselves have become self-sustaining factors, especially after the massive inflows into gold exchange-traded funds," Commerzbank analyst Eugen Weinberg said.
Tensions between the United States and Iran also supported gold, he added.
Holdings of the world's largest gold-backed ETF, SPDR Gold Trust, rose 4.6% on Friday from a day earlier, its biggest one-day percentage gain since September 2008. [GOL/ETF]
The U.S. Federal Reserve and the European Central Bank last week hinted that they were open to easing policy to counter a global economic slowdown, exacerbated by global trade tensions. Helping gold's appeal, the dollar fell to a three-month low against a basket of currencies on bets the U.S. central bank would start lowering interest rates as early as next month. [USD/]
Meanwhile, U.S. President Donald Trump said on Sunday he was not seeking war with Tehran, but tensions remain high between the longtime foes, with Washington due to announce "significant" sanctions on Iran on Monday.
Gold prices have risen nearly 8% so far this month, and more than $70 just over the past week.
Hedge funds and money managers boosted their bullish stance in COMEX gold in the week to June 18 and speculators switched to a net long in silver futures and options, the U.S. Commodity Futures Trading Commission said on Friday. [CFTC]
Gold holding above the psychologically important $1,400 level is a positive signal for consolidation after last week’s rally, said Carlo Alberto De Casa, chief analyst at ActivTrades.
"The gold rally pushed silver up too, but the scenario in this case is less strong, as prices keep bouncing on the resistance area at $15.50," he said.
Silver edged 0.3% lower to $15.31 per ounce and platinum was up 0.5% at $813.68.Palladium rose 1.2% to $1,517.23 an ounce.
The market's focus now shifts to whether Washington and Beijing can resolve their trade dispute at a summit in Japan this week of leaders from the Group of 20 leading world economies.
(Reporting by Nallur Sethuraman and Eileen Soreng in Bengaluru; Editing by Louise Heavens/Jan Harvey/Jane Merriman) |
Regina Hall and Taraji P. Henson Show Off Their Bootylicious Dance Moves During Epic 2019 BET Awards Opener
Regina Hall and Taraji P. Henson are channeling Beyonce ! Following Cardi B 's sexy opening performance at the 2019 BET Awards , the night's host, Regina Hall, took the stage with a marching band for a performance reminiscent of Beyonce's Homecoming . Wearing sparkling, red-and-black striped pants, a white cape and a crown, Hall looked incredible as she strutted down the stage. After the epic entrance, Hall encouraged the audience to their feet as Sugar Bear performed and she grooved alongside both him and the dancers. Hall's dancing really got the audience moving, with the Little actress shaking her butt for the crowd as she got into the fun jam. Henson eventually made her way up the stage and showed off her own epic moves in a black workout style outfit, complete with a matching fanny pack and red jacket. The pair quickly excited the crowd as they twerked and got down together, with Henson even busting out the running man move at one point. The choreographed butt shaking continued as the songs -- they performed "Do You Know What Time It Is?," "Da Butt" and "Run Joe" -- wrapped up and the show officially began. Fans were in awe of the women's epic performance, with one Twitter user calling Henson "a whole mood" and another gushing that their time on stage was "something I never knew I needed." @TherealTaraji a whole mood on the #BETAwards !! 🙌🏽🙌🏽🙌🏽🙌🏽 pic.twitter.com/vgFJLtBNB3 — PRETTY HU$TLAZ (@PrettyHustlaz) June 24, 2019 Regina Hall and Taraji twerking on stage is something I never knew I needed 😂😍and both of these ladies are 48😩 black don’t crack 🙌🏾 #BETAwards pic.twitter.com/OHN5MJ14Kc — James 😈 (@jamesss_101) June 24, 2019 Hall and Henson's performance was only one part of an epic night at this year's show. Watch the video below to see what else went down at the 2019 BET Awards. Story continues RELATED CONTENT: Cardi B Gives Husband Offset a Lap Dance During Sexy 2019 BET Awards Performance BET Awards 2019: The Complete Winners List Regina Hall Reveals What She Does Not Want to See in 'Girls Trip 2' (Exclusive) Related Articles: Hollywood Bikini Bods Over 40 Biggest Celebrity Breakups of 2019 -- So Far! Celebrities in Their Underwear |
What Does Thrace Plastics Holding and Commercial S.A.'s (ATH:PLAT) Share Price Indicate?
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Thrace Plastics Holding and Commercial S.A. (ATH:PLAT), which is in the chemicals business, and is based in Greece, saw a decent share price growth in the teens level on the ATSE over the last few months. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine Thrace Plastics Holding and Commercial’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Check out our latest analysis for Thrace Plastics Holding and Commercial
Great news for investors – Thrace Plastics Holding and Commercial is still trading at a fairly cheap price. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 12.06x is currently well-below the industry average of 17.57x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Thrace Plastics Holding and Commercial’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
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. However, with a relatively muted revenue growth of 3.1% expected in the upcoming year, short term growth doesn’t seem like a key driver for a buy decision for Thrace Plastics Holding and Commercial.
Are you a shareholder?Even though growth is relatively muted, since PLAT is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor?If you’ve been keeping an eye on PLAT for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy PLAT. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Thrace Plastics Holding and Commercial. You can find everything you need to know about Thrace Plastics Holding and Commercial inthe latest infographic research report. If you are no longer interested in Thrace Plastics Holding and Commercial, 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. |
Morning News Call - India, June 24
To access a PDF version of this newsletter, please click here http://share.thomsonreuters.com/assets/newsletters/Indiamorning/MNC_IN_06242019.pdf If you would like to receive this newsletter via email, please register at: http://solutions.refinitiv.com/MNCIndiaSubscriptionpage FACTORS TO WATCH No major events are scheduled for the day. LIVECHAT - FX WEEK AHEAD FX Buzz analyst Jeremy Boulton analyses G7 currencies at 5:00 pm IST. To join the conversation, click on the link: https://refini.tv/2P8N0Wp INDIA TOP NEWS • Pompeo to seek stronger strategic ties with India despite trade tensions U.S. Secretary of State Mike Pompeo will seek to further strengthen strategic ties with India during a visit next week despite increasing frictions over trade, data flows and arms from Russia, officials said. • RBI Deputy Governor Acharya resigns 6 months before term ends - Business Standard Reserve Bank of India Deputy Governor Viral Acharya has resigned six months before the scheduled end of his term in office, the Business Standard newspaper reported, citing people familiar with the matter. • India likely to let budget deficit rise as tax receipts fall short India's government is likely to overshoot the budget deficit target previously set for the current fiscal year, three officials have warned, as a slowing economy creates a big shortfall in tax collections and prompts new stimulus plans. • India asks scooter, bike makers to draw up plan for EVs - sources India's federal think-tank has asked scooter and motorbike manufacturers to draw up a plan to switch to electric vehicles, days after they publicly opposed the government's proposals saying they would disrupt the sector, two sources told Reuters. • India becomes investment darling for sovereign wealth and pension funds Sovereign wealth funds are piling into India, buying stakes in everything from airports to renewable energy, attracted by political stability, a growing middle class and reforms making it more enticing for foreigners to invest. • India steel ministry seeks higher duties to deter Chinese imports -document India's steel ministry has sought an immediate increase in import duties on finished steel products to 15% from a range of 7.5% to 12.5%, citing a threat from Chinese imports and excess global capacity, an internal note reviewed by Reuters showed. • India's space startups ignite investor interest From companies building palm-sized satellites to those aiming to propel satellites into space using cleaner fuels, a new wave of space technology startups are mushrooming in India, catching the attention of investors keen to join the space race. • Southeast Asian leaders emphasise economic strength in face of U.S.-China tensions Southeast Asian leaders agreed on Sunday to work together on the region's economy and security to strengthen their position to face growing U.S.-China tensions, as they wrapped up their summit in Bangkok. GLOBAL TOP NEWS • U.S. prods Iran for talks to ease Gulf tensions; Tehran dismisses sanctions threat U.S. President Donald Trump said on Sunday he was not seeking war with Tehran after a senior Iranian military commander warned any conflict in the Gulf region could spread uncontrollably and threaten the lives of U.S. troops. • China says U.S., China should make compromises in trade talks China and the United States should be willing to make compromises in trade talks and not insist only on what each side wants, Chinese Vice Commerce Minister Wang Shouwen said. • Turkey's opposition strikes blow to Erdogan with Istanbul mayoral win Turkey's opposition has dealt President Tayyip Erdogan a stinging blow by winning control of Istanbul in a re-run mayoral election, breaking his aura of invincibility and delivering a message from voters unhappy over his policies. LOCAL MARKETS OUTLOOK (As reported by NewsRise) • SGX Nifty nearest-month futures were little changed at 11,766.00. • The Indian rupee is expected to open lower against the U.S. currency amid rising crude oil prices, which offset broad-based losses in the dollar. • Indian government bonds could fall in early trade tracking gains in crude oil prices, traders said. However, the losses could be capped on media report that Viral Acharya, Reserve Bank of India’s deputy governor and a member of the Monetary Policy Committee, has resigned, they added. The yield on the benchmark 7.26% bond maturing in 2029 is likely to trade in a range of 6.83% - 6.90% today. GLOBAL MARKETS • Wall Street edged lower on Friday, as U.S. Vice President Mike Pence's decision to defer a speech on China policy increased optimism on upcoming trade talks between Washington and Beijing, while tensions between the United States and Iran undercut sentiment. • Asian shares were off to a cautious start as investors pinned their hopes on any signs of a thaw in Sino-U.S. trade negotiations. • The euro rose to a three-month high against the dollar, as bearish bets on the U.S. currency remained solid on prospects of a near-term interest rate cut by the Federal Reserve. • U.S. Treasury prices fell sharply on Friday, as investors cashed in on steep gains the last two days that saw yields drop to multi-year lows in the wake of a Federal Reserve statement that flagged interest rate cuts this year. • Oil prices climbed as tensions remain high between Iran and the United States, with U.S. Secretary of State Mike Pompeo saying "significant" sanctions on Tehran would be announced. • Gold prices extended gains in early Asian trade, hovering near a six-year peak touched in the previous session, as a weaker dollar and heightened tensions between the United States and Iran underpinned the precious metal. CLOSE FII INVESTMENTS EQUITIES DEBT PNDF spot 69.58/69.61 June 21 -$105.01 mln $111.80 mln 10-yr bond yield 6.86% Month-to-date -$17.30 mln $750.12 mln Year-to-date $11.17 bln -$1.38 bln For additional data: India govt bond market volumes Stock market reports Non-deliverable forwards data Corporate debt stories [IN CORPD] Local market closing/intraday levels [IN SNAPSHOT] Monthly inflows [INFLOWS RTRS TABLE IN] ($1 = 69.61 Indian rupees) (Compiled by Samrhitha Arunasalam in Bengaluru) |
Rihanna Presents Mary J. Blige With BET Lifetime Achievement Award
Rihanna took the Microsoft Theater stage on June 23 to present Mary J. Blige with the BET Lifetime Achievement Award. Hailing the legendary singer for her style and sound, Rihanna also made mention of Blige’s history-making two Oscar nominations in the same year, for best actress and original song for “Mudbound.” Accepting the trophy, Blige told Rihanna, ” I don’t think you know how much I love and respect you. I’m a huge fan and you inspire me right back.” Related stories BET Awards' Carpet Colored Blue in Honor of Late Nipsey Hussle BET Awards 2019: The Complete Winners List Seth Meyers Reveals How He Convinced Rihanna to Day Drink With Him Blige then gave a moving speech, in which she explained her resilience both in life and career. Said Blige: “ People always ask, how do I sustain and stay relevant in this industry? It’s because, although I am a leader, a queen, and a living legend. … I’m a servant as well and I’m here to serve. Being a servant is not always glamorous or popular but it’s the job and the assignment that I was given. It’s because in order to be an authority, I had to learn how to come under authority because when the glory is placed on me I give it back to God immediately. T his journey journey has always been bigger than me and my mission is not only just to survive r ight now, it’s to thrive and continue to make history while I do it .” Read Rihanna’s introductory speech in its entirety below: “What’s the 411? With one simple question, Uptown Records’ youngest female artist, Mary J. Blige , introduced herself to the world with a brand new vibe. Forever aligning the worlds of hip hop and R&B, she changed the game with her unique sound. And that Mary J style — the backwards cap, the knee pads, the baggy jerseys … y’all know the Mary J. look. And then she took it there … with those thigh-high boots. Story continues And then there are the awards and the accolades. And making history as the first person ever nominated for an Oscar in an acting and music category in the same year. Happy Mary. Sad Mary. Mad Mary. No more drama Mary. Dancing Mary. We’re here for all of it. Mary J. Blige: you have set the bar for relatable, timeless, classic music. You opened multiple doors for female artists in this industry. And on behalf of all the women [who] came after you — like myself — thank you for being you ao we can feel comfortable being ourselves. Thank you for pouring your soul into every track and giving us a song for every feeling. Thank you for showing us that love is all that we need. But we didn’t know how much we actually needed you. Ladies and gentlemen, get on your feet right now. The recipient of the 2019 BET Lifetime Achievement Award: the undeniable Queen of hip-hop and R&B, Mary J. Blige.” Sign up for Variety’s Newsletter . For the latest news, follow us on Facebook , Twitter , and Instagram . |
Rockets G Chris Paul shoots down trade request rumors
If theres trouble brewing between Chris Paul and his Houston Rockets teammates, the veteran point guard is doing his best to hide it. Paul spoke with the media on Sunday at his Go Hoop Day celebrations in Los Angeles on Sunday , where he shot down rumors that he is unhappy with his current team. Ill be in Houston, Paul said, via the Houston Chronicle . Im happy about that. Im very happy about that. Im good. Of course, Paul doesnt have a lot of options for what to say. If he did truly want a trade, giving any more credence to reports of him being a bad teammate would only hurt his trade value. Chris Paul-James Harden relationship is unsalvageable As first reported by Yahoo Sports Vincent Goodwill , Pauls relationship with the Rockets and James Harden has reached a breaking point, and it seems best for all parties to split up. Goodwill reported that Harden made a him or me ultimatum and that Paul requested a trade, although Paul made sure to deny that on Sunday: I never asked for a trade, Paul said. I never demanded a trade. Two seasons ago, the Rockets had the leagues best record and held a 3-2 lead over the eventual champion Golden State Warriors before Paul suffered a season-ending hamstring injury. The players differences might feel smaller had they come home with a ring instead of another playoff exit. Instead, the two ball-dominant guards found it hard to coexist. Paul reportedly is tired of Hardens style, and Harden didnt appreciate Pauls personality and injury problems. The only issue is that Paul still has $124 million over three years left on his contract. Chris Paul shot down rumors that he asked for a trade. (Photo by Yong Teck Lim/Getty Images) Can the Rockets find a taker for Chris Paul? Pauls $41 million salary might not sound so bad a year or two ago, but between his injuries and declining play two issues that wont get better with age he has one of the toughest contracts to move in the league. Paul's shooting numbers are particularly concerning. His 41.9 percent shooting from the field was a career-low, while his 35.8 percent three-point shot was a worst since 2012-13. From the all-important corner, he was even worse at 34.5 percent. Story continues The Rockets reportedly tried to swing Paul to the New York Knicks but were rebuffed. Even if the Knicks chances of landing at least one of Kevin Durant and Kyrie Irving are diminished, they still didnt want to take a chance on the nine-time All-Star. Finding a fit for Paul will be tricky, especially since they Rockets are reportedly trying to clear salary to land Jimmy Butler. Few teams with cap space are going to be gunning for the playoffs, so the Rockets may have to settle for swapping bad contracts. For example, Paul hails from North Carolina, and the Charlotte Hornets might hypothetically be a fit. However, they would only need him if Kemba Walker leaves , and if that happens, they may just prefer to rebuild from the ground up instead of taking on a disgruntled former star. More from Yahoo Sports: Is this the best USWNT of all time? One player says yes Morgan, Ertz expected to play for U.S. against Spain LaVar Ball talks again, makes First Take drama worse Sources: UConn move to the Big East inevitable |
Unit at Philadelphia refinery completely destroyed in fire: sources
By Jarrett Renshaw and Jessica DiNapoli
(Reuters) - The alkylation unit involved in a massive fire on Friday at Philadelphia Energy Solutions Inc's oil refinery has been completely destroyed, which will hamper the supply of gasoline from the U.S. East Coast's largest refinery, sources familiar with the matter said on Sunday.
The destruction of the unit, coupled with damage from the fire that ripped through the 335,000 barrel-per-day (bpd) refining complex, could force the 200,000 bpd Girard Point section of the two-section complex to remain shut for an extended period. [nL8N23S224]
Major units in the Point Breeze section of the plant were also shut down due to unrelated repairs, sources said.
Even when the Girard Point section restarts, it will run at reduced rates due to the loss of the alkylation unit, two sources told Reuters on Sunday.
It could take several years for the company to rebuild the unit.
The damage will test the resolve and the finances of the struggling refiner, which emerged from bankruptcy roughly a year ago and has embarked on a number of cash-saving measures in recent months. It will also have to contend with growing concern from the local community and public officials over whether it can safely operate amid its financial woes.
The fire, which began in a tank and involved several explosions that sent a huge fireball into the sky, engulfing the surrounding areas in smoke early on Friday morning, was extinguished Saturday afternoon, the Philadelphia Fire Department said on Sunday in a statement.
The gas valve that had been fueling the fire was shut off, and the tank involved in the blaze was isolated, the fire department said.
The department's hazmat unit and Philadelphia's department of public health are continuing to monitor the air quality around the refinery.
A source familiar with plant operations said one explosion occurred at the 30,000 bpd alkylation unit that uses hydrofluoric acid (HF), one of the deadliest chemicals in the refining business and a source of controversy for its use to make high-octane gasoline at refineries located in densely populated areas.[nL2N23S1BN]
Hydrofluoric acid can form a toxic cloud at room temperature, with exposure leading to severe health problems and even death.
PES confirmed the fire at the alkylation unit has been extinguished and that the company and a third party are monitoring the air quality insider the facility each hour.
Philadelphia Deputy Fire Commissioner Craig Murphy said in a press conference on Friday that the cause of the fire was unclear.
Federal officials including the Occupational Safety and Health Administration and the U.S. Chemical Safety and Hazard Investigation Board on Monday will begin an investigation into the cause and origin of the fire, according to the fire department statement.
Four workers were injured and treated on-site, according to a company statement, while city emergency workers treated one person, who did not need to go to a hospital.
The fire comes as the company has faced financial headwinds. Philadelphia Energy Solutions emerged from bankruptcy last year, after filing because of the costs of complying with the U.S. Renewable Fuel Standard, a 2005 law that requires refiners to either blend biofuels into their product or purchase credits from competitors who do.
The refinery has been financially struggling since then, Reuters has reported.
(Reporting by Jarrett Renshaw and Jessica DiNapoli; Editing by Phil Berlowitz and Marguerita Choy) |
A Look At Ester Industries Limited's (NSE:ESTER) Exceptional Fundamentals
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Ester Industries Limited (NSE:ESTER) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of ESTER, it is a financially-sound company with a a strong track record of performance, trading at a great value. Below, I've touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, take a look at thereport on Ester Industries here.
In the past couple of years, ESTER has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. In addition to beating its historical values, ESTER also outperformed its industry, which delivered a growth of 14%. This is what investors like to see! ESTER'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 implies that ESTER manages its cash and cost levels well, which is a crucial insight into the health of the company. ESTER appears to have made good use of debt, producing operating cash levels of 0.22x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
ESTER's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts' consensus forecast growth be correct. Also, relative to the rest of its peers with similar levels of earnings, ESTER's share price is trading below the group's average. This further reaffirms that ESTER is potentially undervalued.
For Ester Industries, I've compiled three essential factors you should further examine:
1. Future Outlook: What are well-informed industry analysts predicting for ESTER’s future growth? Take a look at ourfree research report of analyst consensusfor ESTER’s outlook.
2. Dividend Income vs Capital Gains: Does ESTER 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 ESTER as an investment.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of ESTER? 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. |
ECB to pacify doves with a cut or easing guidance by end-September: Reuters poll
By Richa Rebello and Rahul Karunakar
BENGALURU (Reuters) - By the end of September, the European Central Bank will either cut its deposit rate or ease its forward guidance further by pledging to keep interest rates lower for longer, according to a majority of economists in a Reuters poll.
ECB President Mario Draghi in a speech last Tuesday called for "additional stimulus" in the absence of any improvement in weak growth and tepid inflation, which has languished below the central bank's target of close to 2% since 2013.
That brings the ECB in line with many of its major central bank peers who are already easing, or close to doing so.
But despite conviction among economists in the June 18-21 poll lining up with the ECB's plan for easing this year, the outlook for growth was lowered and inflation is still not expected to rise to the ECB's target.
That is despite years of record low interest rates and after the ECB allowed its balance sheet to soar with purchased assets, mostly government bonds, worth 2.6 trillion euros since 2015 under its quantitative easing programme. That ended in December.
"The ECB has the same problem that a number of other central banks have, notably the Bank of Japan, that they get diminishing returns from loosening policy, when you're already at or close to the effective lower bound," said Andrew Kenningham, chief Europe economist at Capital Economics.
"So clearly, that is a big problem. But there is really not much they can do about that; equally it would be a mistake for them to say, 'We are going to sit on our hands and do nothing, because we do not believe we have got any ammunition left'."
All but one of 45 economists who answered an extra question on the next policy measure expect the ECB to ease further in addition to extending already-announced long-term cheap loans to banks.
Over 80% of those economists said the ECB would either cut its deposit rate further and have a tiered system with conditions attached or tweak forward guidance by removing any reference to future interest rate hikes. The others expected the ECB to restart its quantitative easing programme (QE).
Of those who expect easing, about 80% forecast it to come before the end of September, including almost one-third predicting it to happen as early as next month.
While only a few respondents predicted a restart to the ECB's money printing, it is a complete U-turn in expectations: Economists in Reuters polls this year have repeatedly said it was not a mistake to shutter the QE programme in December.
"What changed in terms of communication from Draghi is that things would need to improve substantially, in order to not do more. Really the onus has shifted the other way now, to provide more accommodation," said Capital Economics' Kenningham, who has consistently said stopping QE last year was a policy error.
"Inflation expectations need to pick up, core inflation needs to improve, we need some of the external risks diminished, particularly around trade policy, in order for them to hold off from easing policy. The assumption now is that they will ease."
The last time the ECB cut its interest rates was in March 2016, when it lowered the deposit rate to -0.4% and the refinancing rate to zero.
While there are still some who expect hikes next year and the consensus remains unchanged in showing interest rates on hold through to end-2020, nearly 70% of common contributors have turned more dovish compared with the previous poll.
The most notable change was expectations for the deposit rate, which one bank now forecasts will go as low as -0.8% compared with a low of -0.5% in May.
"For the ECB, the biggest miscalculation was that inflation and underlying inflation have remained so low for so long," said Peter Vanden Houte, chief euro zone economist at ING. "The ECB has been slightly too optimistic on growth, but even more on inflation. And that is creating this change of heart."
With no let-up in world trade tensions, weak global growth and the uncertainties over Britain's withdrawal from the European Union, the probability of a euro zone recession in the next 12 months edged up to 25% from 20% the previous month.
The chance of a slump in the next two years held at 30%, lower than the 40% chance of a downturn in the United States. [ECILT/US]
"The deterioration in the outlook and uncertainty is to some extent the result of the geopolitical situation in the world, policy choices by other leaders in other countries and they also have to deal with that." said Elwin de Groot, head of macro strategy at Rabobank.
"Without the 'Whatever it takes', things would probably be much worse."
(For other stories from the Reuters global long-term economic outlook polls package,)
(Polling by Tushar Goenka and Manjul Paul; Editing by Jonathan Cable and Hugh Lawson) |
Euro Hits 3-Month Highs vs. Dollar on Fed Rate Cut View
Investing.com - The euro rose to its highest level in three months against the U.S. dollar on Monday as the greenback remained on the back foot amid expectations for the Federal Reserve to cuts interest rates later this year.
The euro built on gains from last week, when it added 1.4%, and rose to 1.1387 overnight, its highest since March 22. It was trading at 1.1379 by 03:12 AM ET (07:12 GMT).
The U.S. dollar index versus a basket of six major currencies was a shade lower at 95.63, having plumbed an overnight low of 95.57 after the Fed last week laid the groundwork for a potential rate cut as early as next month.
That weighed on the dollar and in turn reinvigorated its counterparts such as the euro, which has had troubles of its own including Italy's debt problem and the possibility of the European Central Bank having to ease policy.
"It is true that the ECB may have to ease policy especially with the Fed having shifted to an easing bias," said Yukio Ishizuki, senior currency strategist at Daiwa Securities.
"But the ECB already employs a negative interest rate policy and does not have much further room to ease even if they wanted to, unlike the Fed. It is factors like these which have seemingly supported the euro."
The dollar edged up 0.14% to 107.44 yen after hitting a near six-month low of 107.04 on Friday.
The U.S. currency was pressured further against the yen, which often serves as a safe haven in times of political angst, as tensions grew between Iran and the United States.
But it is difficult to see the greenback fall beyond 105 yen as a sustained flight from dollar-assets was unlikely, said Koji Fukaya, director at FPG Securities in Tokyo.
"For example the S&P 500 reached a record high thanks to prospective rate cuts. Stronger investor risk appetite slows any flight-to-quality into the yen," Fukaya said.
In focus was whether Washington and Beijing can resolve their trade dispute at a summit in Japan this week of leaders from the Group of 20 leading world economies.
Both China and the United States should make compromises in trade talks, Chinese Vice Commerce Minister Wang Shouwen said on Monday.
The Australian dollar rose to more than two-week high of 0.6961 earlier after Reserve Bank of Australia Governor Philip Lowe said it would be legitimate to question the effectiveness of global monetary policy easing to boost economic growth.
The comments were perceived to be slightly less dovish as just last week Lowe said a recent cut in Australia interest rates to an all-time low of 1.25% would not be enough to revive economic growth.
The Aussie was already on a steady footing after rebounding from a five-month low of 0.6832 last week when the Fed's tilt towards monetary easing helped offset bearishness from the probability of policy easing in countries including Australia and New Zealand.
The New Zealand dollar was at two-week highs of 0.6605, although the Reserve Bank of New Zealand is expected to echo the dovish sentiments of other central banks when it holds a policy meeting on Wednesday.
--Reuters contributed to this report
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PGA: Zack Sucher's second-place finish at Travelers is 'life-changing'
Though he came up short of the win, Zack Sucher's runner-up finish at the Travelers Championship changed everything and wiped out his family's credit card debt. (\Stan Badz/PGA TOUR/Getty Images) At one point on Saturday at TPC River Highlands, Zack Sucher had built up an incredible five-shot lead over the rest of the field at the Travelers Championship. While that lead dwindled fast, disappearing in just a few holes on the back nine, the 32-year-old is still leaving Connecticut a changed man. Sucher finished with a final round 67 on Sunday, thanks to four birdies in his final six holes and a chip-in par on No. 18, to finish in a tie for second place. Though he came up short of the ultimate goal Chez Reavie won the tournament at 17-under par, snapping an 11-year drought on the PGA Tour Sucher is beyond ecstatic. A chip-in on the 72nd hole gave @ZackSucherPGA a T2 finish @TravelersChamp . He leapt from No. 222 in the #FedExCup standings to No. 126. The top 125 reach the FedExCup Playoffs. He's never qualified. pic.twitter.com/Zu7vuoqT5h PGA TOUR (@PGATOUR) June 24, 2019 It's amazing. It's life changing to be honest, Sucher said, via the Associated Press. It changes the rest of our year, it changes our plans and we have a lot of work to do to figure what else we have to do now. Suchers win not only jumped him from 222nd to 126th in the FedExCup standings just outside the mark to qualify for the playoffs but it brought home a big check, something Sucher hasnt seen in his professional career. Suchers second place finish earned him $633,600. Before Sunday, Sucher had earned just more than $850,000 total in his six years prior in professional golf mainly on the Korn Ferry Tour, which replaced the Web.com Tour this weekend. Perhaps the toughest stretch during that time, however, was during the 2017 season, just his second on the PGA Tour. Story continues Sucher struggled early, missing 11 of 14 cuts. When he did make the cut, he never finished better than a tie for 42nd. Things got worse after the Travelers Championship that year. Sucher was forced to undergo surgery due to lingering ankle issues started impacting his knee. He had to step away from golf completely for 13 months, and went without any income for 210 days while waiting for the PGA Tour disability policy to kick in, according to the Golf Channel. We had seven months with no income at all coming in two years ago, Sucher said, via the Golf Channel. During that, we had to take out some credit cards. The last few months, though, Sucher found success on the course again. He finished in a tie for fourth at the Dormie Network Classic on the Korn Ferry Tour, and backed that up with a tie for second at the Rex Hospital Open earlier this month which secured his Korn Ferry Tour card for next year. He still has work to do to remain on the PGA Tour. He will use his final two starts left on his medical exemption at the Rocket Mortgage Classic and the John Deere Classic, and is just 77 points shy of retaining his Tour card. Sucher, though, isnt worried about the points or where he stands in the golf world. Hes just happy his family is in a better place again. To be honest, I'm not sure what all this does for points-wise, for next year, Sucher said, via the Golf Channel. I don't even know how that works. I know that like two months ago we had credit card debt. So I know we don't have that anymore. Chez Reavie celebrates on the 18th green after making a par to win the Travelers Championship at TPC River Highlands on Sunday in Cromwell, Connecticut. (Tim Bradbury/Getty Images) Chez Reavie ends 11-year PGA Tour drought with win at Travelers Championship Chez Reavies first win on the PGA Tour came at the 2008 RBC Canadian Open. Then, nothing for 11 years. Reavie kept coming up short. Finally, though, the 37-year-old broke through. Reavie picked up his second career win on Sunday at the Travelers Championship after going 17-under par, beating the field by four strokes. Zach Sucher and Keegan Bradley finished in second at 13-under, and Vaughn Taylor took fourth at 12-under. Brooks Koepka, fresh off his runner-up finish at the U.S. Open last week, finished in a tie for 57th at even par. It means everything, Reavie said, via the Associated Press. I went through some injuries, had some long years there in the middle. But it was great, because it gave good perseverance and good perspective of what life is and what golf is. Reavies Sunday was not his best by any means. He finished just 1-under par on the day. It was his Saturday, though, that put him in position to surge ahead. The Wichita, Kansas, native fired seven birdies on his back nine in the third round to finish with a 28, jumping him to the front of the pack at TPC River Highlands. On Sunday, he just had to hold on until a birdie on No. 17 finally did the trick sealing his first win in 3,983 days. No. 17, the hardest hole of the week @TravelersChamp . Its also the hole that sealed the victory for Chez Reavie. pic.twitter.com/N0NhVtTt1M PGA TOUR (@PGATOUR) June 24, 2019 I had to stay patient today. Keegan was playing great and I kept missing putts, Reavie said, via Golfweek. It felt like I was hitting good putts and they just weren't going in. Finally, I made one on 17 to turn the corner. More from Yahoo Sports: Is this the best USWNT of all time? One player says yes Morgan, Ertz expected to play for U.S. against Spain LaVar Ball talks again, makes First Take drama worse Sources: UConn move to the Big East inevitable |
Does eServGlobal Limited (ASX:ESV) Have A Particularly Volatile Share Price?
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Anyone researching eServGlobal Limited (ASX:ESV) might want to consider the historical volatility of the share price. Volatility is considered to be a measure of risk in modern finance theory. Investors may think of volatility as falling into two main categories. The first type is company specific volatility. Investors use diversification across uncorrelated stocks to reduce this kind of price volatility across the portfolio. The second sort is caused by the natural volatility of markets, overall. For example, certain macroeconomic events will impact (virtually) all stocks on the market.
Some stocks are more sensitive to general market forces than others. Beta can be a useful tool to understand how much a stock is influenced by market risk (volatility). However, Warren Buffett said 'volatility is far from synonymous with risk' in his 2014 letter to investors. So, while useful, beta is not the only metric to consider. To use beta as an investor, you must first understand that the overall market has a beta of one. Any stock with a beta of greater than one is considered more volatile than the market, while those with a beta below one are either less volatile or poorly correlated with the market.
View our latest analysis for eServGlobal
Zooming in on eServGlobal, we see it has a five year beta of 1.95. This is above 1, so historically its share price has been influenced by the broader volatility of the stock market. If the past is any guide, we would expect that eServGlobal shares will rise quicker than the markets in times of optimism, but fall faster in times of pessimism. Share price volatility is well worth considering, but most long term investors consider the history of revenue and earnings growth to be more important. Take a look at how eServGlobal fares in that regard, below.
With a market capitalisation of AU$120m, eServGlobal is a very small company by global standards. It is quite likely to be unknown to most investors. It has a relatively high beta, suggesting it is fairly actively traded for a company of its size. Because it takes less capital to move the share price of a small company like this, when a stock this size is actively traded it is quite often more sensitive to market volatility than similar large companies.
Beta only tells us that the eServGlobal 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 eServGlobal’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 ESV’s future growth? Take a look at ourfree research report of analyst consensusfor ESV’s outlook.
2. Past Track Record: Has ESV 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 ESV's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how ESV 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. |
UK consumer spending growth in 2019 to be slowest in six years: EY ITEM Club
LONDON (Reuters) - Britain will see the slowest growth in consumer spending in 2019 in six years, piling even more pressure on retailers, EY ITEM Club forecast on Monday.
It said it expects spending to rise by 1.6% over last year, although that would be faster than an estimated 1.3% growth in the broader UK economy in 2019.
Consumer spending benefited from robust employment growth and a strong pick-up in real earnings growth in the second half of 2018 and early 2019 but the outlook was now weaker, the economic forecasting group said.
"The improvement in purchasing power has meant that consumers have been significantly less affected in their spending decisions than businesses by uncertainties over the economy and Brexit," said Howard Archer, chief economic advisor to the EY ITEM Club, which produces quarterly UK economic forecasts.
"While consumer confidence in late 2018/early 2019 weakened to the lowest level since mid-2013, perceptions of personal finances and a willingness to spend generally held up much better than views of the economy."
The forecaster, which is sponsored by business consultancy EY, said it suspected earnings growth peaked in early 2019. It was likely to remain modestly below that level over the rest of 2019 and possibly beyond.
It said strength in the labour market would increasingly fray over the coming months as companies tailored their behaviour to a lacklustre domestic economy, prolonged Brexit uncertainties, an unsettled domestic political situation and a challenging global environment.
As a result, it forecast employment growth would slow to 1.0% in 2019 and 0.6% in 2020, from 1.2% in 2018.
Slower growth in consumer spending will add to the pressures high street retailers face from changing shopping habits and more spending moving online.
Debenhams and Marks & Spencer have announced store closures, while Philip Green's Topshop-to-Dorothy Perkins fashion empire staved off a collapse into administration this month, as retailers struggle with rising labour costs, business property taxes and growing online competition.
EY head of UK retail Julie Carlyle said despite consumer spending comparing favourably to other parts of the economy, it was far weaker than it has been in previous years.
"Retailers are therefore fighting for a shrinking piece of the pie and this is reflected in the recent turbulence on British high streets," she said.
"And, while the economy won't deliver retailers growth, they will have to find it from other areas and this means having a strong understanding of their customers."
(Reporting by Paul Sandle; Editing by Susan Fenton) |
eServGlobal Limited (ASX:ESV) Is Expected To Breakeven
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eServGlobal Limited's (ASX:ESV): eServGlobal Limited provides telecommunications software solutions to mobile and financial service providers in the Middle East, the Asia Pacific, Europe, Africa, and Central and South America. On 31 December 2018, the AU$120m market-cap posted a loss of -AU$19.9m for its most recent financial year. Many investors are wondering the rate at which ESV will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for ESV, its year of breakeven and its implied growth rate.
See our latest analysis for eServGlobal
ESV is bordering on breakeven, according to Software analysts. They anticipate the company to incur a final loss in 2019, before generating positive profits of AU$1.8m in 2020. So, ESV is predicted to breakeven approximately a few months from now. What rate will ESV have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 99%, which signals high confidence from analysts. If this rate turns out to be too aggressive, ESV may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of ESV’s upcoming projects, however, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one aspect worth mentioning. ESV currently has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which typically has high debt relative to its equity. ESV currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
There are too many aspects of ESV to cover in one brief article, but the key fundamentals for the company can all be found in one place –ESV’s company page on Simply Wall St. I’ve also put together a list of important aspects you should look at:
1. Historical Track Record: What has ESV's performance 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.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look atwho sits on eServGlobal’s board and the CEO’s back ground.
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. |
Bitsdaq Loyalty Rewards Carnival: BXBC to BQQQ Exchange in Conjunction with Trading Contest Grand Prize
SINGAPORE / ACCESSWIRE / June 23, 2019 /In order to give back to the long term support provided by the community, Bitsdaq recently launched the Bitsdaq Loyalty Rewards Carnival, which will include the commencement of the BXBC airdrop token to BQQQ swap activities, the trading contest plus the global limited watch giveaway. In addition, Bitsdaq has opened theBQQQ withdrawal servicea few days ago.
Bitsdaq will open the BXBC candy deposit service on June 20th and open BXBC to BQQQ swap activities the following day. This airdrop exchange is one of the events for Bitsdaq to give back to the community. In order to encourage users to actively participate in the exchange, the platform will also conduct airdrop activities for the conversion event. The sooner the participating users convert BXBC to BQQQ, the better the exchange rate that they will be awarded.Details have beenannouncedon the official website.
Bitsdaq founder and CEO Ricky Ng said that Bitsdaq is based on the principle that the interests of the users are of the topmost importance, and hopes to achieve the development of a tokenized community-based economic model to operate on. Bitsdaq will strive to build a positive community feedback system to build value for the platform.
"We have started the BXBC to BQQQ conversion event, and also are giving out to our user an airdrop, the purpose is to give back to the real community supporters, cultivate loyal fans, and achieve a win-win situation. With the realization of the long-term value of BQQQ, early Bitsdaq supporters will also benefit."
Limited edition Colletrix x Bitsdaq x Ultraman watches created by former Rolex artisans, with the autograph of Bitsdaq's CEO, Ricky Ng, will be awarded to 10 lucky participants of the BXBC to BQQQ swap for the Loyalty Awards Event.The watch is a limited edition model where only 10 are available globally, and it will be autographed by the CEO of Bitsdaq, Ricky Ng. Details have beenannouncedon the official website.
Currently, the Bitsdaq Launchpad platform has received over 100 applications for listing. After strict review and consideration, several projects have emerged. Bitsdaq will announce the project details and the timetable for the joint feedback activities to gauge sentiment. Recently, Bitsdaq announced that the first IEO project, MediLOT, which will be conducted through the exchange token BQQQ. This has already attracted resounding user interest. Details of the LOT IEO will be released in time to come.
Bitsdaq has accumulated more than 2 million registered users in 3 months and is currently ranked third after Binance and Coinbase in traffic to global digital currency exchange, with 11.4 million monthly visits. Bitsdaq has over 100,000 community members, and the candy token BXBC is held by over 2 million active wallet address. Bitsdaq also received investment from prestigious institutions, including the NGC and Consensus Venture Group. Last but not least, Bitsdaq has been given a rare high score of 8.5/10 by the world's leading blockchain agency, CryptoPotato.
Scan the QR code below to download the latest version of the Bitsdaq APP.
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Contact:marketing@bitsdaq.com
SOURCE:Bitsdaq
View source version on accesswire.com:https://www.accesswire.com/549631/Bitsdaq-Loyalty-Rewards-Carnival-BXBC-to-BQQQ-Exchange-in-Conjunction-with-Trading-Contest-Grand-Prize |
When Can We Expect A Profit From eServGlobal Limited (ASX:ESV)?
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eServGlobal Limited's (ASX:ESV): eServGlobal Limited provides telecommunications software solutions to mobile and financial service providers in the Middle East, the Asia Pacific, Europe, Africa, and Central and South America. On 31 December 2018, the AU$120m market-cap posted a loss of -AU$19.9m for its most recent financial year. As path to profitability is the topic on ESV’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for ESV, its year of breakeven and its implied growth rate.
See our latest analysis for eServGlobal
According to the industry analysts covering ESV, breakeven is near. They expect the company to post a final loss in 2019, before turning a profit of AU$1.8m in 2020. ESV is therefore projected to breakeven around a few months from now. What rate will ESV have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 99%, which is rather optimistic! If this rate turns out to be too aggressive, ESV may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of ESV’s upcoming projects, however, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I’d like to point out is that ESV has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which typically has high debt relative to its equity. ESV currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
This article is not intended to be a comprehensive analysis on ESV, so if you are interested in understanding the company at a deeper level, take a look atESV’s company page on Simply Wall St. I’ve also compiled a list of important factors you should further research:
1. Historical Track Record: What has ESV's performance 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.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look atwho sits on eServGlobal’s board and the CEO’s back ground.
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. |
Here's Why I Think Escorts (NSE:ESCORTS) Is An Interesting Stock
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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 Warren Buffett has mused, 'If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.' When they buy such story stocks, investors are all too often the patsy.
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested inEscorts(NSE:ESCORTS). While profit is not necessarily a social good, it's easy to admire a business than can consistently produce it. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.
View our latest analysis for Escorts
Over the last three years, Escorts has grown earnings per share (EPS) like young bamboo after rain; fast, and from a low base. So I don't think the percent growth rate is particularly meaningful. As a result, I'll zoom in on growth over the last year, instead. Like a falcon taking flight, Escorts's EPS soared from ₹41.62 to ₹55.68, over the last year. That's a impressive gain of 34%.
I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. While we note Escorts's EBIT margins were flat over the last year, revenue grew by a solid 24% to ₹63b. That's a real positive.
In the chart below, you can see how the company has grown earnings, and revenue, over time. For finer detail, click on the image.
You don't drive with your eyes on the rear-view mirror, so you might be more interested in thisfreereport showing analyst forecasts for Escorts'sfutureprofits.
Like the kids in the streets standing up for their beliefs, insider share purchases give me reason to believe in a brighter future. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, small purchases are not always indicative of conviction, and insiders don't always get it right.
Not only did Escorts insiders refrain from selling stock during the year, but they also spent ₹11m buying it. That's nice to see, because it suggests insiders are optimistic. Zooming in, we can see that the biggest insider purchase was by Ritu Nanda for ₹6.2m worth of shares, at about ₹618 per share.
On top of the insider buying, it's good to see that Escorts insiders have a valuable investment in the business. Given insiders own a small fortune of shares, currently valued at ₹6.4b, they have plenty of motivation to push the business to succeed. That holding amounts to 9.7% of the stock on issue, thus making insiders influential, and aligned, owners of the business.
Given my belief that share price follows earnings per share you can easily imagine how I feel about Escorts's strong EPS growth. On top of that, insiders own a significant stake in the company and have been buying more shares. So it's fair to say I think this stock may well deserve a spot on your watchlist. Of course, just because Escorts is growing does not mean it is undervalued. If you're wondering about the valuation, check outthis gauge of its price-to-earnings ratio, as compared to its industry.
The good news is that Escorts is not the only growth stock with insider buying. Here'sa a list of them... with insider buying in the last three months!
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. |
Tyler Perry Gives Rousing Speech At BET Awards: Own Your Way
In one of the most impactful speeches at Sunday nights BET Awards , Tyler Perry brought the audience to their feet talking about creating opportunities and taking control of his own destiny. The writer, producer, director was honored with BETs Ultimate Icon Award. Taraji P. Henson, who has appeared in a string of Perrys films including The Family That Preys (2008), I Can Do Bad All By Myself (2009) and Acrimony (2018), presented him with the award. Related stories BET Awards Full Winners List: Cardi B, 'BlacKkKlansman', Regina King, Michael B. Jordan Among Honorees Viacom Confirms BET-Tyler Perry Subscription Streaming Launch This Fall - Update Nipsey Hussle Gets Moving Tribute At BET Awards In a time when my counterparts were making way more money than I was, Tyler Perry was the first to pay me my exact worth, Henson said. In his powerful speech at the Microsoft Theaters in Los Angeles, Perry recalled growing up with a father who beat his mother. To make her laugh, five-year-old Tyler started imitating the women she played cards with every Friday. Then Perry spoke of starting a new school when he was 11 or 12. To get there, he had to walk past pimps, prostitutes and through a graveyard. One day, a man was standing at a major intersection asking passersby for help cross. No one would stop but Perry did and the two became good friends. That moment reminded me of my mother, bringing out of her pain with laughter, helping her cross. In fact, Perry said that the first 10 movies he made were all about his mother, subconsciously, wanting her to know shes worthy, to let black women know you are worthy, you are special, you are powerful, you are amazing. All of that that was about helping her cross. He extended the metaphor to casting actors like Henson, Viola Davis and Idris Elba when they couldnt get jobs in this town. God blessed me to be in a position to be able to hire them. I was trying to help somebody cross. Story continues Perry then spoke about building his Tyler Perry Studios in Atlanta. When I built my studio, I built it in a neighborhood that is one of the poorest black neighborhoods in Atlanta so that young black kids could see that a black man did that, and they can do it too. I was trying to help somebody cross. The studio was once a Confederate Army base, which meant that there was Confederate soldiers on that base, plotting and planning on how to keep 3.9 million Negroes enslaved. Now that land is owned by one Negro. The comments received a long standing ovation. Its all about trying to help somebody cross. While everybody else is fighting for a seat at the table, talking about #OscarsSoWhite, #OscarsSoWhite, I said, Yall go ahead and do that. While youre fighting for a seat at the table, Ill be down in Atlanta building my own. Because what I know for sure is that if I could just build this table, God will prepare it for me in the presence of my enemies. Referring to the name of award he was receiving, Ultimate Icon Award, Perry said, rather than being an icon, I want to be an inspiration. I want you to hear this, every dreamer in this room. There are people whose lives are tied to your dream. Own your stuff, own your business, own your way. You can watch Perrys speech above. Perry recently inked a multi-year content deal with BET and parent company Viacom. Last week he set his first series at BET , a White House drama titled The Oval , starring Ed Quinn, Kron Moore, Paige Hurd and Daniel Croix Henderson. It will begin principal photography this summer at Tyler Perry Studios. Here is the video intro to Perrys award. Sign up for Deadline's Newsletter . For the latest news, follow us on Facebook , Twitter , and Instagram . |
Escorts Limited (NSE:ESCORTS) Has Got What It Takes To Be An Attractive Dividend Stock
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Could Escorts Limited (NSE:ESCORTS) be an attractive dividend share to own for the long haul? Investors are often drawn to strong companies with the idea of reinvesting the 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.
Investors might not know much about Escorts's dividend prospects, even though it has been paying dividends for the last nine years and offers a 0.5% yield. A low yield is generally a turn-off, but if the prospects for earnings growth were strong, investors might be pleasantly surprised by the long-term results. Remember that the recent share price drop will make Escorts's yield look higher, even though recent events might have impacted the company's prospects. Some simple analysis can reduce the risk of holding Escorts for its dividend, and we'll focus on the most important aspects below.
Explore this interactive chart for our latest analysis on Escorts!
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. Escorts paid out 4.5% 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.
Remember, you can always get a snapshot of Escorts'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 Escorts paid its first dividend at least nine years ago. The company has been paying a stable dividend for a while now, which is great. However we'd prefer to see consistency for a few more years before giving it our full seal of approval. During the past nine-year period, the first annual payment was ₹1.00 in 2010, compared to ₹2.50 last year. Dividends per share have grown at approximately 11% per year over this time.
We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.
The other half of the dividend investing equation is evaluating whether earnings per share (EPS) are growing. Growing EPS can help maintain or increase the purchasing power of the dividend over the long run. It's good to see Escorts has been growing its earnings per share at 32% a year over the past 5 years. Earnings per share have grown rapidly, and the company is retaining a majority of its earnings. We think this is ideal from an investment perspective, if the company is able to reinvest these earnings effectively.
We'd also point out that Escorts issued a meaningful number of new shares in the past year. Regularly issuing new shares can be detrimental - it's hard to grow dividends per share when new shares are regularly being created.
Dividend investors should always want to know if a) a company's dividends are affordable, b) if there is a track record of consistent payments, and c) if the dividend is capable of growing. It's great to see that Escorts is paying out a low percentage of its earnings and cash flow. Next, earnings growth has been good, but unfortunately the company has not been paying dividends as long as we'd like. All things considered, Escorts looks like a strong prospect. At the right valuation, it could be something special.
Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 8 analysts we track are forecasting for Escortsfor freewith publicanalyst estimates for the company.
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. |
Escorts Limited's (NSE:ESCORTS) 0.5% Dividend Yield Looks Pretty Interesting
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Dividend paying stocks like Escorts Limited (NSE:ESCORTS) 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. On the other hand, investors have been known to buy a stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations.
Investors might not know much about Escorts's dividend prospects, even though it has been paying dividends for the last nine years and offers a 0.5% yield. A low yield is generally a turn-off, but if the prospects for earnings growth were strong, investors might be pleasantly surprised by the long-term results. Remember though, given the recent drop in its share price, Escorts's yield will look higher, even though the market may now be expecting a decline in its long-term prospects. Before you buy any stock for its dividend however, you should always remember Warren Buffett's two rules: 1) Don't lose money, and 2) Remember rule #1. We'll run through some checks below to help with this.
Explore this interactive chart for our latest analysis on Escorts!
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. In the last year, Escorts paid out 4.5% of its profit as dividends. Given the low payout ratio, it is hard to envision the dividend coming under threat, barring a catastrophe.
Remember, you can always get a snapshot of Escorts'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 Escorts 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 ₹1.00 in 2010, compared to ₹2.50 last year. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year over that time.
We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.
The other half of the dividend investing equation is evaluating whether earnings per share (EPS) are growing. Growing EPS can help maintain or increase the purchasing power of the dividend over the long run. It's good to see Escorts has been growing its earnings per share at 32% a year over the past 5 years. The company is only paying out a fraction of its earnings as dividends, and in the past been able to use the retained earnings to grow its profits rapidly - an ideal combination.
We'd also point out that Escorts issued a meaningful number of new shares in the past year. Regularly issuing new shares can be detrimental - it's hard to grow dividends per share when new shares are regularly being created.
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. First, we like that the company's dividend payments appear well covered, although the retained capital also needs to be effectively reinvested. We were also glad to see it growing earnings, although its dividend history is not as long as we'd like. Overall we think Escorts scores well on our analysis. It's not quite perfect, but we'd definitely be keen to take a closer look.
Earnings growth generally bodes well for the future value of company dividend payments. See if the 8 Escorts analysts we track are forecasting continued growth with ourfreereport on analyst estimates for the company.
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. |
Buttigieg criticized at emotional town hall after shooting
SOUTH BEND, Ind. (AP) — Democratic presidential candidate Pete Buttigieg faced criticism Sunday from angry residents of South Bend, Indiana, at an emotional town hall meeting a week after a white police officer fatally shot a black man in the city where he is mayor. Buttigieg (BOO'-tuh-juhj) said he would call for an outside investigation of the shooting of 54-year-old Eric Logan by Sgt. Ryan O'Neill. The 37-year-old mayor said he would send a letter to the federal Department of Justice's civil rights division and notify the local prosecutor that he'd like an independent investigator appointed. He conceded that his administration had failed on two key initiatives. "The effort to recruit more minority officers to the police department and the effort to introduce body cameras have not succeeded and I accept responsibility for that," Buttigieg said. Prosecutors investigating said that the shooting was not recorded by O'Neill's body camera. The town hall grew contentious when some community members questioned whether the mayor had done enough to reform the police department in the city of 100,000 people, which is about a quarter black. "Get the people that are racist off the streets," one woman in the audience said. "Reorganize your department. You can do that by Friday." Buttigieg left the campaign trail for several days to deal with the reaction to the shooting, holding a late night news conference, meeting with the family of the man killed and addressing a protest rally where he was heckled by some in the crowd. The June 16 shooting happened after O'Neill responded to a call about a suspicious person going through vehicles, a prosecutor investigating the case said. O'Neill spotted Logan leaning inside a car. When confronted, Logan approached O'Neill with a 6- to 8-inch knife raised over his head, the prosecutor said. O'Neill fired twice, with the other shot hitting a car door. Story continues Violence flared again in South Bend early Sunday when a shooting at a pub left a Michigan man dead. Police identified the man as Brandon Williams, 27, of Niles, Michigan. Another 10 people suffered gunshot injuries in South Bend Sunday, the St. Joseph County Metro Homicide Unit said. Five of the wounded remained in hospital in stable condition later Sunday. County Sheriff William Redmond said his officers assisted South Bend police in controlling a crowd of more than 100 "upset and angry citizens" who came from the pub to the hospital where the wounded were taken. It was not immediately clear what prompted the shooting. Asked after the town hall meeting about the latest shootings, Buttigieg described them as a "reversal" after progress in curbing violence in South Bend earlier this year and in 2018. Buttigieg had surged from obscurity to become a top-tier candidate in a crowded Democratic presidential field. But he has struggled to connect with minority voters. The white mayor has had a sometimes-tense relationship with the black community dating back to his first term in office, when he fired the city's first black police chief. He has also faced criticism for his handling of police misconduct cases, including a case involving an officer who was twice disciplined for civil rights violations but not fired, and for not having a police department that reflects South Bend's diversity. The police department is almost 90 percent white. In the wake of the shooting, Buttigieg called on his police chief to remind officers to have their body cameras on at all times when they are engaging with citizens. ___ AP writer Sara Burnett in Chicago contributed to this story. |
Easy Come, Easy Go: How Energy Resources of Australia (ASX:ERA) Shareholders Got Unlucky And Saw 83% Of Their Cash Evaporate
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Long term investing is the way to go, but that doesn't mean you should hold every stock forever. It hits us in the gut when we see fellow investors suffer a loss. For example, we sympathize with anyone who was caught holdingEnergy Resources of Australia Ltd(ASX:ERA) during the five years that saw its share price drop a whopping 83%. And some of the more recent buyers are probably worried, too, with the stock falling 53% in the last year. The falls have accelerated recently, with the share price down 31% in the last three months.
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.
Check out our latest analysis for Energy Resources of Australia
Energy Resources of Australia isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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 half a decade Energy Resources of Australia reduced its trailing twelve month revenue by 13% for each year. That puts it in an unattractive cohort, to put it mildly. So it's not altogether surprising to see the share price down 30% per year in the same time period. This kind of price performance makes us very wary, especially when combined with falling revenue. Ironically, that behavior could create an opportunity for the contrarian investor - but only if there are good reasons to predict a brighter future.
The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.
You can see how its balance sheet has strengthened (or weakened) over time in thisfreeinteractive graphic.
Energy Resources of Australia shareholders are down 53% for the year, but the market itself is up 11%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 30% 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 could get a better understanding of Energy Resources of Australia's growth by checking outthis more detailed historical graphof earnings, revenue and cash flow.
We will like Energy Resources of Australia better if we see some big insider buys. While we wait, check out thisfreelist of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU 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. |
Did You Manage To Avoid Engineers India's (NSE:ENGINERSIN) 24% Share Price Drop?
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The main aim of stock picking is to find the market-beating stocks. But every investor is virtually certain to have both over-performing and under-performing stocks. So we wouldn't blame long termEngineers India Limited(NSE:ENGINERSIN) shareholders for doubting their decision to hold, with the stock down 24% over a half decade. The good news is that the stock is up 1.3% in the last week.
See our latest analysis for Engineers India
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).
During the five years over which the share price declined, Engineers India's earnings per share (EPS) dropped by 4.0% each year. This reduction in EPS is less than the 5.4% annual reduction in the share price. So it seems the market was too confident about the business, in the past.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Thisfreeinteractive report on Engineers India'searnings, revenue and cash flowis a great place to start, if you want to investigate the stock further.
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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Engineers India, it has a TSR of -14% for the last 5 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!
Investors in Engineers India had a tough year, with a total loss of 3.5% (including dividends), against a market gain of about 0.3%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 2.9% 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. Importantly, we haven't analysed Engineers India's dividend history. Thisfreevisual report on its dividendsis a must-read if you're thinking of buying.
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 IN 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. |
RPT-UPDATE 1-Pompeo to seek stronger strategic ties with India despite trade tensions
(Repeats story that ran late Friday.)
* Disputes over trade, e-commerce rules, Russian defence system
* Modi, Trump expected to meet at G20 in Japan
* India, U.S. build defence ties
By Sanjeev Miglani and David Brunnstrom
NEW DELHI/WASHINGTON, June 21 (Reuters) - U.S. Secretary of State Mike Pompeo will seek to further strengthen strategic ties with India during a visit next week despite increasing frictions over trade, data flows and arms from Russia, officials said.
Pompeo arrives in New Delhi on Tuesday for talks that are aimed at laying the ground for a meeting between U.S. President Donald Trump and Indian Prime Minister Narendra Modi later in the week at a G20 meeting in Japan.
India is embroiled in disputes with the United States over tariffs, Indian price caps on imported medical devices, most from the United States, and Indian rules on e-commerce that impose conditions on the operations of major U.S. companies such as Amazon and Walmart.
Another issue that has alarmed India is the possibility of U.S. restrictions on work visas for Indian professionals in retaliation for India's insistence on local data storage by big foreign firms, even though the State Department said on Thursday it had no such plan.
"U.S.-India trade ties, at least between our capitals, are certainly worsening. We both have leaders who look at trade as a zero-sum game," said Richard Rossow, a U.S.-India expert at Washington's the Center for Strategic and International Studies.
The Indian government led by Modi, who was re-elected last month with a big majority, says it has been trying to negotiate solutions to the disputes with the United States but that, as a developing country, it has to protect the interests of its people.
Trump has repeatedly criticised India for its high tariffs and last month raised the stakes with the withdrawal of a decades-old trade privilege.
Indian and U.S. officials said trade would be addressed during Pompeo's visit but emphasised the broader political and security relationship.
"There will be certain issues between us that will be on the table at all points of time," an Indian government official said. "But it should not detract from the overall direction of the relationship, which is positive."
ARMS SALES
Both countries are wary of the growing might of China.
U.S. officials said Pompeo will seek to advance the U.S. strategic partnership with India.
"India is a crucial partner in the Trump administration’s vision for a free and open Indo-Pacific region; It shares our concerns about challenges to our shared interests in the region," a senior official of the U.S. State Department told reporters on Friday.
The official said Pompeo would "talk specifically ... about expanding security, energy and space cooperation," and noted that the two countries were gearing up for their first-ever tri-service military exercises in the Bay of Bengal later this year.
At the same time, the U.S. side was hoping the visit would provide a "kick-start" to move quickly to resolve longstanding irritants over trade and market access for U.S. firms.
"A serious process, a credible process and a candid process is going to be critical," the official said. "We need to get a conversation started quickly."
India and the United States eyed each other warily over decades of Cold War suspicion, when India was closer to the then Soviet Union.
But the United States has become one of India's top arms suppliers over the past decade, selling more than $15 billion of weapons such as transport planes, long-range submarine hunters and helicopter gunships.
U.S. firms Lockheed Martin and Boeing are in the race for a contract to build 110 fighter planes in a deal estimated at $20 billion.
In 2016, the United States declared India a major defence partner, opening the way for sales of high-tech military equipment seen as part of a U.S. aim to build up the country as a counterweight to China in the region.
But here too, new strains have emerged over an Indian plan to buy S-400 surface-to-air missile systems from Russia, which can trigger U.S. sanctions under the Countering American Adversaries Through Sanctions Act (CAATSA), prohibiting any engagement with Russia's defence sector.
India, which signed the deal with Russia last year, has been hoping for a waiver, but that has not been forthcoming.
U.S. principal deputy assistant secretary for South and Central Asia, Alice Wells, told Congress this month Washington had "serious concerns" about the possible Indian purchase and there was no available CAATSA waiver when it came to the S-400.
"We are continuing our conversations about how the U.S. or other defence providers could assist India," she added. (Additional reporting by David Brunnstrom in Washington; Editing by Robert Birsel and James Dalgleish) |
Introducing Energy Resources of Australia (ASX:ERA), The Stock That Tanked 83%
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Long term investing is the way to go, but that doesn't mean you should hold every stock forever. We don't wish catastrophic capital loss on anyone. Spare a thought for those who heldEnergy Resources of Australia Ltd(ASX:ERA) for five whole years - as the share price tanked 83%. We also note that the stock has performed poorly over the last year, with the share price down 53%. The falls have accelerated recently, with the share price down 31% in the last three months.
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.
Check out our latest analysis for Energy Resources of Australia
Because Energy Resources of Australia 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over half a decade Energy Resources of Australia reduced its trailing twelve month revenue by 13% for each year. That's definitely a weaker result than most pre-profit companies report. So it's not that strange that the share price dropped 30% per year in that period. We don't think this is a particularly promising picture. Ironically, that behavior could create an opportunity for the contrarian investor - but only if there are good reasons to predict a brighter future.
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.
Energy Resources of Australia shareholders are down 53% for the year, but the market itself is up 11%. 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 30% per year over five years. 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 could get a better understanding of Energy Resources of Australia's growth by checking outthis more detailed historical graphof 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 AU 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. |
Those Who Purchased Emkay Taps and Cutting Tools (NSE:EMKAYTOOLS) Shares A Year Ago Have A 24% Loss To Show For It
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The simplest way to benefit from a rising market is to buy an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. Investors inEmkay Taps and Cutting Tools Limited(NSE:EMKAYTOOLS) have tasted that bitter downside in the last year, as the share price dropped 24%. That's well bellow the market return of 0.3%. Emkay Taps and Cutting Tools hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. Unfortunately the last month hasn't been any better, with the share price down 25%.
View our latest analysis for Emkay Taps and Cutting Tools
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.
Unhappily, Emkay Taps and Cutting Tools had to report a 73% decline in EPS over the last year. Readers should not this outcome was influenced by the impact of extraordinary items on EPS. The share price fall of 24% isn't as bad as the reduction in earnings per share. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
Dive deeper into Emkay Taps and Cutting Tools's key metrics by checking this interactive graph of Emkay Taps and Cutting Tools'searnings, revenue and cash flow.
Given that the market gained 0.3% in the last year, Emkay Taps and Cutting Tools shareholders might be miffed that they lost 24% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The share price decline has continued throughout the most recent three months, down 15%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. Before deciding if you like the current share price, check how Emkay Taps and Cutting Tools scores on these3 valuation metrics.
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 IN 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. |
Should You Be Tempted To Sell Emkay Taps and Cutting Tools Limited (NSE:EMKAYTOOLS) Because Of Its P/E Ratio?
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The goal of this article is to teach you how to use price to earnings ratios (P/E ratios). We'll apply a basic P/E ratio analysis to Emkay Taps and Cutting Tools Limited's (NSE:EMKAYTOOLS), to help you decide if the stock is worth further research.Emkay Taps and Cutting Tools has a P/E ratio of 24.29, based on the last twelve months. That corresponds to an earnings yield of approximately 4.1%.
Check out our latest analysis for Emkay Taps and Cutting Tools
Theformula for P/Eis:
Price to Earnings Ratio = Price per Share ÷ Earnings per Share (EPS)
Or for Emkay Taps and Cutting Tools:
P/E of 24.29 = ₹120 ÷ ₹4.94 (Based on the year to March 2019.)
A higher P/E ratio means that investors are payinga higher pricefor each ₹1 of company earnings. That is not a good or a bad thingper se, but a high P/E does imply buyers are optimistic about the future.
Companies that shrink earnings per share quickly will rapidly decrease the 'E' in the equation. That means unless the share price falls, the P/E will increase in a few years. A higher P/E should indicate the stock is expensive relative to others -- and that may encourage shareholders to sell.
Emkay Taps and Cutting Tools saw earnings per share decrease by 73% last year. And it has shrunk its earnings per share by 28% per year over the last three years. This might lead to low expectations.
We can get an indication of market expectations by looking at the P/E ratio. You can see in the image below that the average P/E (14.4) for companies in the machinery industry is lower than Emkay Taps and Cutting Tools's P/E.
Its relatively high P/E ratio indicates that Emkay Taps and Cutting Tools shareholders think it will perform better than other companies in its industry classification. Shareholders are clearly optimistic, but the future is always uncertain. So investors should delve deeper. I like to checkif company insiders have been buying or selling.
The 'Price' in P/E reflects the market capitalization of the company. In other words, it does not consider any debt or cash that the company may have on the balance sheet. In theory, a company can lower its future P/E ratio by using cash or debt to invest in growth.
Such expenditure might be good or bad, in the long term, but the point here is that the balance sheet is not reflected by this ratio.
Net debt totals just 1.1% of Emkay Taps and Cutting Tools's market cap. It would probably trade on a higher P/E ratio if it had a lot of cash, but I doubt it is having a big impact.
Emkay Taps and Cutting Tools has a P/E of 24.3. That's higher than the average in the IN market, which is 15.4. With some debt but no EPS growth last year, the market has high expectations of future profits.
When the market is wrong about a stock, it gives savvy investors an opportunity. As value investor Benjamin Graham famously said, 'In the short run, the market is a voting machine but in the long run, it is a weighing machine.' Although we don't have analyst forecasts, you could get a better understanding of its growth by checking outthis more detailed historical graphof earnings, revenue and cash flow.
Of courseyou might be able to find a better stock than Emkay Taps and Cutting Tools. So you may wish to see thisfreecollection of other companies that have grown earnings strongly.
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. |
Lauren London and Nipsey Hussle's Family Emotionally Accept Humanitarian Award on Behalf of Late Rapper
In a moving moment, Lauren London joined Nipsey Hussle ’s family to accept the Humanitarian Award at the 2019 BET Awards on behalf of the late rapper. After T.I. presented the award, London, along with Hussle's family, including his son and daughter, Kross and Emani, took the stage, where the late rapper's grandmother professed deep gratitude at the wave of support they have received since his untimely death. London, Hussle's girlfriend, kept things short and sweet, stating. "I just want to thank you guys for all of the love and support and the marathon continues again." Then, Hussle's parents spoke and his mother, Angelique Smith, talked about her belief in the afterlife, stating that we are "vessels" on this side of eternity. Afterward, his father, Dawit Asghedom, admitted that he wished his "friend" was here to accept the award and perform for his fans. That's when a music tribute to Hussle began with Marsha Ambrosius singing "Real Big." Then, fans and viewers were treated to YG performing a piece of "Last Time I Checc'd." John Legend and DJ Khaled also delivered an emotional rendition of "Higher" while clad in white along with the rest of the performers. All the songs are either Hussle's or featured him. Nipsey Hussle Tribute 💙🙏🏾 #BETAwards RIP Ermias " #NipseyHussle " Asghedom 🏁 pic.twitter.com/NyG0wbvGVn — BET (@BET) June 24, 2019 Afterward backstage, Legend spoke with ET about seeing Hussle's family watch their tribute: "It was moving just sitting there watching his family react to the song. It was a powerful moment. Honored to be there." On June 13, the network revealed that it intended to bestow the honor upon the hit maker posthumously for his work revitalizing his South Los Angeles neighborhood. "As a prolific artist and leader, Nipsey Hussle was zealous about driving change for the betterment of his community, empowering and employing those in need and being an influential and highly respected leader," Connie Orlando, Executive Vice-President, Head of Programming at BET, said in a statement at the time. "His passing was a tremendous loss to the entertainment industry and to the culture. We will continue to remember his advocacy and be inspired by the groundwork he set forth and his dire commitment to social change." "We are forever grateful, humbled and honored to have experienced his presence and we are invested in doing our part to ensure that the marathon will indeed continue. It is an immense honor for us to recognize him with this year's Humanitarian Award," the statement concluded. Story continues The late rapper was also nominated for Best Male Hip-Hop Artist at Sunday's awards show. Hussle, whose real name was Ermias Asghedom, was shot and killed outside his store, The Marathon Clothing, on March 31. He was 33 years old. In May, his alleged shooter, Eric Holder Jr., was indicted by a grand jury. If convicted as charged, he faces a possible maximum sentence of life in state prison. Get more details on Hussle’s death below. RELATED CONTENT: Lauren London Pays Tribute to Nipsey Hussle and More Sweet Father's Day Posts Nipsey Hussle to Receive Posthumous Humanitarian Award at 2019 BET Awards Nipsey Hussle's Alleged Killer Indicted for Murder by Grand Jury Related Articles: Hollywood Bikini Bods Over 40 Biggest Celebrity Breakups of 2019 -- So Far! Celebrities in Their Underwear |
Why You Should Like Emkay Taps and Cutting Tools Limited’s (NSE:EMKAYTOOLS) ROCE
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Today we'll look at Emkay Taps and Cutting Tools Limited (NSE:EMKAYTOOLS) and reflect on its potential as an investment. To be precise, we'll consider its Return On Capital Employed (ROCE), as that will inform our view of the quality of the business.
First, we'll go over how we calculate ROCE. Next, we'll compare it to others in its industry. Last but not least, we'll look at what impact its current liabilities have on its ROCE.
ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. Generally speaking a higher ROCE is better. In brief, it is a useful tool, but it is not without drawbacks. 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 Emkay Taps and Cutting Tools:
0.23 = ₹257m ÷ (₹1.2b - ₹107m) (Based on the trailing twelve months to March 2019.)
So,Emkay Taps and Cutting Tools has an ROCE of 23%.
Check out our latest analysis for Emkay Taps and Cutting Tools
When making comparisons between similar businesses, investors may find ROCE useful. Emkay Taps and Cutting Tools's ROCE appears to be substantially greater than the 13% average in the Machinery industry. We would consider this a positive, as it suggests it is using capital more effectively than other similar companies. Independently of how Emkay Taps and Cutting Tools compares to its industry, its ROCE in absolute terms appears decent, and the company may be worthy of closer investigation.
When considering ROCE, bear in mind that it reflects the past and does not necessarily predict the future. 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 Emkay Taps and Cutting Tools is cyclical, it could make sense to check out thisfreegraph of past earnings, revenue and cash flow.
Current liabilities are short term bills and invoices that need to be paid in 12 months or less. Due to the way ROCE is calculated, a high level of current liabilities makes a company look as though it has less capital employed, and thus can (sometimes unfairly) boost the ROCE. To check the impact of this, we calculate if a company has high current liabilities relative to its total assets.
Emkay Taps and Cutting Tools has total assets of ₹1.2b and current liabilities of ₹107m. Therefore its current liabilities are equivalent to approximately 8.9% of its total assets. In addition to low current liabilities (making a negligible impact on ROCE), Emkay Taps and Cutting Tools earns a sound return on capital employed.
If Emkay Taps and Cutting Tools can continue reinvesting in its business, it could be an attractive prospect. There might be better investments than Emkay Taps and Cutting Tools out there,but you will have to work hard to find them. These promising businesses withrapidly growing earningsmight be right up your alley.
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. |
Ciara Is Red-Hot & More Celebs in Monochromatic Outfits at 2019 BET Awards
Monochromatic dressing was the big theme of the night on the red carpet at the 2019 BET Awards . Vibrant colors in electrifying neon hues or bold saturated palettes were apt choices for standing out. Ciara made the red carpet red-hot in a dramatic minidress by Jean Paul Gaultier. The hitmakers long-sleeve dress had spiked, voluminous shoulders, ruching and a train to the side. Under the light, the delicate fabric took on a tangerine tint. Down below, she finished things off with matching sandals by Stuart Weitzman, which had straps around the ankle and toe. Related stories Rihanna Wore a Leather Fenty Look at the BET Awards Worst-Dressed at the BET Awards, According to You Celebs Embrace the Hottest Color Trend of the Season at the 2019 BET Awards Speaking of head-to-toe red, Meagan Good also made hers a one-color look. The actress had on a suit-dress with a chunky belt, clutch and pair of mesh peep-toe slingbacks. Rapper Rapsody embraced a purple palette that consisted of a Margiela sweater with trousers and PVC boots, which were practically invisible and absorbed the color. Meanwhile, Fantasia Barrino was a vision in white. The singer had on an edgy white minidress that featured dramatic sleeves and a sparkling embellishment at the center. A pair of white pointy pumps completed the outfit. Actress LisaRaye McCoy has a history of wearing head-to-toe white, so it was no surprise that she arrived in her favorite color. She rocked a dress by Jessica Angel Collection that had a slit to show off her sandals. The shoes had knots around the ankle and across the toe. See more of what the celebrities wore on the 2019 BET Awards red carpet . Want more? Kitten Heels Get a Twist as BET Awards Red Carpet Kicks Off Sign up for FN's Newsletter . For the latest news, follow us on Facebook , Twitter , and Instagram . |
What Are Analysts Saying About The Future Of Bijou Brigitte modische Accessoires Aktiengesellschaft's (FRA:BIJ)?
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Since Bijou Brigitte modische Accessoires Aktiengesellschaft (FRA:BIJ) released its earnings in December 2018, analyst consensus outlook seem bearish, with earnings expected to decline by 12% in the upcoming year. Though this pessimism is not unfounded, given the 5-year track record of negative growth. Presently, with latest-twelve-month earnings at €22m, we should see this fall to €19m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Bijou Brigitte modische Accessoires 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 Bijou Brigitte modische Accessoires
The longer term view from the 1 analysts covering BIJ is one of negative 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 BIJ, 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.
By 2022, BIJ's earnings should reach €20m, from current levels of €22m, resulting in an annual growth rate of -1.8%. This leads to an EPS of €2.54 in the final year of projections relative to the current EPS of €2.74. The bottom-line decline seems to be caused by top-line expansion of 0.8%, which is predicted to lag cost growth leading up to 2022. With this high cost growth, margins is expected to contract from 6.7% to 6.1% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Bijou Brigitte modische Accessoires, I've compiled three relevant 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 Bijou Brigitte modische Accessoires 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 Bijou Brigitte modische Accessoires is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of Bijou Brigitte modische Accessoires? 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. |
Will Bijou Brigitte modische Accessoires Aktiengesellschaft's (FRA:BIJ) Earnings Grow Over The Next Few Years?
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The latest earnings update Bijou Brigitte modische Accessoires Aktiengesellschaft (FRA:BIJ) released in May 2019 indicated that the company endured a minor headwind with earnings falling from €22m to €22m, a change of -0.6%. Below, I've laid out key growth figures on how market analysts predict Bijou Brigitte modische Accessoires's earnings growth outlook over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
See our latest analysis for Bijou Brigitte modische Accessoires
Market analysts' consensus outlook for next year seems pessimistic, with earnings reducing by a double-digit -12%. In the following year, earnings begins to improve, arriving at €20m by 2022.
Although it is helpful to understand the rate of growth each year relative to today’s level, it may be more beneficial evaluating the rate at which the earnings are rising or falling every year, on average. The advantage of this technique is that it ignores near term flucuations and accounts for the overarching direction of Bijou Brigitte modische Accessoires'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 the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is -1.8%. This means, we can presume Bijou Brigitte modische Accessoires will chip away at a rate of -1.8% every year for the next couple of years.
For Bijou Brigitte modische Accessoires, I've put together three important aspects 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 BIJ 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 BIJ is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of BIJ? 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. |
Amazon is having a sale on Plano tackle boxes
Plano fishing gear is on sale at Amazon (Photo: Getty Images) If you love the great outdoors, then youre going to love this deal. The best-selling Plano Angled Tackle System with Three 3560 Stowaway Boxes is down to $34 (was $63). It features three DuraView stowaway utility boxes at a 15-degree angle for secure storage and compartments along the sides for even more organization. The various compartments converted one buyer who preferred an older style tackle box. "I am an old style fishing box girl, so I was not happy that this style is all there is anymore... until I used it. I love this thing," raved the reviewe r. "I can open just part, and it doesn't tip over on you. The compartments are easy to open, and you can change the sizing about. I can put all my dough ball ingredients, my lures, my bobbers, my sinkers, everything works perfectly." It's a straightforward, simple design and although its only $34, don't expect anything flimsy or cheap. "Let me tell you how impressed I am with the ruggedness of this box," explained one reviewer . "This thing flew out of the boat going down the highway at 70 mph, and all that broke was the front window and got some road rash. None of the clasps or containers opened and I didn't lose any tackle. Made my day when we turned around and found everything intact." Keep scrolling to shop the best-selling fishing tackle box on Amazon and others, on sale for a limited time. Plano Angled Tackle System with Three 3560 Stowaway Boxes Plano Angled Tackle System with Three 3560 Stowaway Boxes. (Photo: Amazon) Shop it: $34 (was $63), amazon.com The editors at Yahoo Lifestyle are committed to finding you the best products at the best prices. At times, we may receive a share from purchases made via links on this page. Read More from Yahoo Lifestyle: Comfortable and perfect: Why men are obsessed with these $18 best-selling swim trunks I suffered from back pain for yearshere's what finally worked for me Get it or regret it: This best-selling 65-inch 4K Samsung TV is now even cheaper Follow us on Instagram , Facebook , Twitter , and Pinterest for nonstop inspiration delivered fresh to your feed, every day. Want daily pop culture news delivered to your inbox? Sign up here for Yahoos newsletter. |
A Monumental Fight Over Facebook’s Cryptocurrency Is Coming
Michael J. Casey is the chairman of CoinDesk’s advisory board and a senior advisor for blockchain research at MIT’s Digital Currency Initiative.
The following article originally appeared inCoinDesk Weekly, a custom-curated newsletter delivered every Sunday exclusively to our subscribers.
Given how slowly Washington lawmakers have taken to devise a coherent, informed view of cryptocurrency, the Chair of the House Financial Services Committee’s rapid leap to action last week over Facebook’s ambitious Libra project was remarkably fast.
Related:Facebook Seeking Crypto Wallet Data Engineer, Regulatory Policy Expert
But let’s reflect not on the details of Rep. Maxine Waters’ (D-Calif.) urgent requests thatFacebook to cease work on Librauntil after hearings are held or on howEuropean lawmakers made similar appeals.The important takeaway from these legislators’ actions is that they are able to make such demands at all. since this is not the case with truly decentralized projects.
Unlike with bitcoin, representatives in Congress can directly identify and talk to the people in charge of the Libra project. They can subpoena them and, thus, pressure them. They might start with David Marcus, head of Facebook subsidiary Calibra, but, ultimately, it’s FacebookCEO Mark Zuckerberg who’ll give lawmakers the greatest leverage.
In this case, the buck stops with Zuck.
Now, imagine a Congressional leader calling for a halt in bitcoin development. Who exactly are they going to pressure to end an open-source project involving millions of globally spread mostly unidentifiable developers, miners and users?
Related:BIS Wants ‘Level Playing Field’ for Banks Amid Threat from Facebook
This distinction – between one project with a single, identifiable authority figure and another whose governance is distributed and leaderless with a founder who has never revealed their identity – goes to the heart of a crypto community critique that the social media giant’s initiative is not censorship resistant.
When there’s someone in charge, an interested party – a policymaker, a banker, a regulator, a shareholder – can lean on them to make changes. And when the blockchain consensus model is based on a club-like permissioned membership, a coordinated effort to alter, or censor, the ledger is always possible. And if the ledger or its software can be altered by this pressure, the Libra platform can’t unconditionally promise to support open, unfettered access for users and a permissionless innovation environment for developers.
Let’s be clear: Libra’s designers have thought deeply about how to protect their project from Facebook itself, both in a real sense and that of public perception. In its commitment to decentralization, the team has put the code under an open-source license, handed the network’s governance authority to a separate Swiss-based foundation, brought in 27 external partners to work alongside Facebook as independent, permissioned nodes in the network, and verbally committed to transition to a permissionless model over time. There is a structure and roadmap in place for Libra to grow and survive regardless of its genesis as a Facebook project.
All that’s fine. But we’re still at the genesis phase, one that is and will for some time hinge on the centrality of a particularly powerful company.
At the risk of stating the obvious, Marcus and his team are paid by Facebook. Follow the money, as they say. But also, follow the code.
The Libra protocol’s all-important source code is now open-sourced, but it was conceived and gestated inside Facebook. So, whether the project managers and programmers resist or not, the culture of that organization will inherently feed into Libra’s design priorities.
The elephant in the room is that a drumbeat of recent news has revealed Facebook’s corporate culture to be profoundly toxic. The company’s model of surveillance capitalism has turned users into pawns in a global game of data manipulation, cultivated echo chambers of narrow-mindedness, done irreparable harm to the worthy cause of journalism, and deeply undermined our democracy.
This legacy is the unavoidable reason why people, including lawmakers, are alarmed that Facebook might be on the verge of creating a new international model for money and payments. Rightly or wrongly, there’s a fox-in-the-henhouse optic here that’s unhelpful.
Wharton Professor Kevin Werbach argued in the New York Times this weekthat Facebook’s Libra is a bold effort to win back public trust by leveraging the accountability ingrained in blockchain technology. But at the project’s genesis phase, with no choice but to trust Facebook’s early input, that legacy of prior mistrust could easily become a huge barrier to its progress.
Notwithstanding all the above, I actually want Libra to succeed. (Note: I also want Facebook to die. That’s not a contradiction; those two outcomes can and should be separate. In fact, it’s the nub of the issue.)
The Libra team has set its sights on achieving financial inclusion for the 2 billion adults worldwide who don’t have bank accounts. It’s a noble goal, and they are going about in an intelligent way – from a truly international, cross-border, cross-currency perspective. Bring all those people into the international economy and the payoffs could be huge, for them and for the rest of us.
And let’s face it, bitcoin has dismally failed to live up to its advocates’ promises of a financial inclusion solution. Bitcoin’s and other cryptocurrencies’ impact on the $800 billion global remittances market is puny.
Sure, uptake could rise if the off-chain Lightning Network lives up to its promise to enable larger-scale transaction-processing, if stablecoin projects resolve bitcoin’s volatility problem, and if new encryption solutions can improve both security and user experience with crypto wallets. But these solutions will take time. We need to act now.
In the end, it’s not at all clear that global person-to-person payments are a viable use case for bitcoin, perhaps because too many HODLing speculators crowd all the spenders out. And, of course, no other payments-focused cryptocurrency has put a big enough dent in the remittance market.
So, perhaps the recipe for a global broadening in payments lies with a cross-border, low-volatility international stablecoin backed by a basket of leading fiat currencies and developed with the formidable programming and marketing resources of 28 tech and financial giants. Also, when you combine Facebook’s, Instagram’s and WhatsApp’s user count, the number of potential wallets runs to 4 billion. Global network effects. Instantly.
All other things being equal – that is, if we ignore, for now, the genesis problem of Libra inheriting Facebook’s toxic roots – one could also argue that a permissioned, corporate network is the best approach for the Libra blockchain in place of a fully open, permissionless chain such as bitcoin’s or ethereum’s. The heavy lifting needed for early global traction – the software development, the marketing effort and the public policy outreach – requires that significant corporate resources be deployed in a targeted, coordinated manner that’s hard for open-source blockchain communities to achieve. There are efficiency advantages to be had from centralization.
Over time, as the project grows, Libra hopes to expand the consortium. That could undermine the coordination efficiency, but in a classic centralization-versus-decentralization tradeoff, the addition of new members – more NGOs, some banks, a workers union perhaps, and some public pension funds – will achieve greater diversity and lower collusion capacity. It’s far from perfect but the timed transition brings things closer to censorship resistance at a time in the future when it will matter — if it they get there.
As an aside, I also believe Libra’s success would be a positive for bitcoin – and the past week’s price action suggests that the market sees the same.
Here’s why: Currently the one value proposition that holds well for bitcoin is that it will be a more liquid, digitally up-to-date risk-hedging vehicle than gold when people need to preserve value in something immune from political and institutional risk. That argument could be enhanced if Libra succeeds in converting billions of people to digital payment wallets, because it will more broadly establish the power of blockchain-based digital money as the way of the future. At the same time, because of its genesis as a Facebook-initiated, permissioned system, Libra will not shake the perception of being prone to political – i.e. censorship – risks. For many, then, Bitcoin, aka digital gold, will become the obvious alternative.
The currency-basket-backed Libra token is, however, a real competitor to other reserve-backed crypto-tokens, such as USDC, issued by the CENTER coalition initially formed by Circle and Coinbase, GUSD, Gemini’s stablecoin, and PAX, from Paxos.
But we can imagine events working in the latter’s favor.Developing countries like India, for example,may become hostile to a new currency entering circulation that sucks demand away from their local currencies, but they would be more accepting of a digital dollar, given that the greenback already circulates in their economies. Users, also, might be happier holding tokens pegged to single sovereign currencies rather than in a hard-to-measure basket. And if concerns about centralized control undermines trust in Libra or limits innovation, the fact that these tokens are built on truly permissionless blockchains may make them more appealing (even if you still have to trust the reserve-holder to guarantee to the price stability.)
Whatever happens, the world of money flows is mind-blowingly huge. There are $6 trillion a day in foreign exchange transactions alone. That allows plenty of room for different models, different tastes, and different trust systems for coordinating digital value exchange.
The bigger risk is not that Libra succeeds and enriches Mark Zuckerberg even more but that neither Libra nor one of its crypto competitors ever succeeds in breaking down the barriers to economic participation. Financial exclusion breeds poverty, which in turn breeds terrorism and war.
And if we assume that the technology, if it isn’t yet ready, will ultimately get there, then the biggest threat to that is from a policy mistake.
The subtext of both Waters’ statements and those of European lawmakers was that this private exchange system can’t be allowed to replace national currencies. Thats’ not what Libra intends, but the perception that it is undermining nation states’ sovereignty over money could stoke fears and lead to a ban on Libra. And if that happens, it sets an ugly precedent for or all other competing ideas, whether it’s USDC, GUSD, PAX or DAI or something else.
The projects capacity to foster financial inclusion could also be hurt by the Financial Action Task Force’s, or FATF, embrace of a new rulefor exchanging cryptocurrency.If ratified by enough countries that could curtail the free flow of cryptocurrency among addresses that haven’t been through a bank-like “know your customer” process. In other words, it could pose a real barrier to Libra’s and everyone else’s dream of financial inclusion for the “unbanked.”
The bottom line: the Libra team has its work cut out, and we all have a lot riding on it. The project’s representatives must face the reality that, for now at least, the buck still stops with Zuck, and that regulators will use that against them.
We should all wish them success in trying to convince policymakers that an open-system to global financial transactions is important. (It’s encouraging that the Bank of England is taking an open-minded view,proposing that tech companies like Libra be allowed to access funds directly from central banks.)
But, by the same token, we must be vigilant against corporate power that could easily convert this important project into something more sinister. Facebook’s own history is a reminder of the risks we face.
I wish it were a different company running with this ball right now. But since it’s not, the need for all of us to take a direct interest in this project is even greater.
We must demand that our representatives provide clear-headed, informed oversight that holds corporations like this to account and curtails their monopolizing powers. But we should also expect smart, open-minded regulation that encourages companies to compete and innovate in an open system that creates opportunities for everyone on this planet.
Image Credit:David Tran Photo / Shutterstock.com
• This Ethereum Lottery Perfectly Explains How Facebook’s Big Corporate Backers Will Profit from Crypto
• Facebook’s Crypto Hiring Spree Continues With Search for Finance Lead |
Should You Be Adding Rémy Cointreau (EPA:RCO) To Your Watchlist 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. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.
So if you're like me, you might be more interested in profitable, growing companies, likeRémy Cointreau(EPA:RCO). While profit is not necessarily a social good, it's easy to admire a business than can consistently produce it. 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.
See our latest analysis for Rémy Cointreau
The market is a voting machine in the short term, but a weighing machine in the long term, so share price follows earnings per share (EPS) eventually. It's no surprise, then, that I like to invest in companies with EPS growth. We can see that in the last three years Rémy Cointreau grew its EPS by 15% per year. That's a pretty good rate, if the company can sustain it.
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. This approach makes Rémy Cointreau look pretty good, on balance; although revenue is flattish, EBIT margins improved from 21% to 23% in the last year. That's something to smile about.
In the chart below, you can see how the company has grown earnings, and revenue, over time. For finer detail, click on the image.
Fortunately, we've got access to analyst forecasts of Rémy Cointreau'sfutureprofits. You can do your own forecasts without looking, or you cantake a peek at what the professionals are predicting.
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 Rémy Cointreau with market caps between €3.5b and €11b is about €2.5m.
Rémy Cointreau offered total compensation worth €2.1m to its CEO in the year to March 2018. That comes in below the average for similar sized companies, and seems pretty reasonable to me. CEO compensation is hardly the most important aspect of a company to consider, but when its reasonable that does give me a little more confidence that leadership are looking out for shareholder interests. It can also be a sign of good governance, more generally.
One positive for Rémy Cointreau is that it is growing EPS. That's nice to see. On top of that, my faith in the board of directors is strengthened by the fact of the reasonable CEO pay. So all in all I think it's worth at least considering for your watchlist. Of course, just because Rémy Cointreau is growing does not mean it is undervalued. If you're wondering about the valuation, check outthis gauge of its price-to-earnings ratio, as compared to its industry.
Although Rémy Cointreau 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. |
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Samsung 65″ Class 4K (2160P) Ultra HD Smart LED TV. (Photo: Walmart) Walmart has slashed the price on a top-rated Samsung 4K TV — and a deal this great won’t last. The 65-inch 4K (2160P) Ultra HD Smart LED TV is down to $700 from its original $1,400 price tag. With a curved screen, the 2018 model (UN65NU7300FXZA) boasts a slim design with all the bells and whistles you’d expect from a Samsung TV: 2160P resolution, 4K UHD picture and universal browsing. “I am 57 years old and have owned a lot of TVs in my time but I have never had anything as nice as this Samsung. Watching it is like being there in person. The curve is like 3D to me,” writes a happy customer. “It’s just like being in the movie theater. It has great stereo sound with the speakers that are built into it … I would recommend it to anyone that wants a great system.” Another adds, “The picture is absolutely gorgeous. Almost no lag when changing between inputs (cable, game console, Fire Stick, etc). I love the quick select screen that has all my shortcuts so I can switch to Netflix or Hulu almost instantly.” Shop the Samsung 65″ 4K (2160P) Ultra HD Smart LED TV , $700 (was $1,400) at Walmart.com . The editors at Yahoo Lifestyle are committed to finding you the best products at the best prices. At times, we may receive a share from purchases made via links on this page. The reviews quoted above reflect the most recent versions at the time of publication. Read More from Yahoo Lifestyle: These 15 'Shark Tank' products will change your life ‘Comfortable’ and ‘perfect’: Why men are obsessed with these $18 best-selling swim trunks 'Holy comfortable!': 16 stylish summer sneakers that are comfy, too Follow us on Instagram , Facebook , Twitter , and Pinterest for nonstop inspiration delivered fresh to your feed, every day. Want daily pop culture news delivered to your inbox? Sign up here for Yahoo’s newsletter. |
Here's Why I Think Rémy Cointreau (EPA:RCO) 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. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested inRémy Cointreau(EPA:RCO). Now, I'm not saying that the stock is necessarily undervalued today; but I can't shake an appreciation for the profitability of the business itself. 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 Rémy Cointreau
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. Rémy Cointreau managed to grow EPS by 15% per year, over three years. That growth rate is fairly good, assuming the company can keep it up.
I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. This approach makes Rémy Cointreau look pretty good, on balance; although revenue is flattish, EBIT margins improved from 21% to 23% in the last year. That's a real positive.
In the chart below, you can see how the company has grown earnings, and revenue, over time. Click on the chart to see the exact numbers.
Fortunately, we've got access to analyst forecasts of Rémy Cointreau'sfutureprofits. You can do your own forecasts without looking, or you cantake a peek at what the professionals are predicting.
As a general rule, I think it worth considering how much the CEO is paid, since unreasonably high rates could be considered against the interests of shareholders. For companies with market capitalizations between €3.5b and €11b, like Rémy Cointreau, the median CEO pay is around €2.5m.
Rémy Cointreau offered total compensation worth €2.1m to its CEO in the year to March 2018. That comes in below the average for similar sized companies, and seems pretty reasonable to me. CEO compensation is hardly the most important aspect of a company to consider, but when its reasonable that does give me a little more confidence that leadership are looking out for shareholder interests. It can also be a sign of a culture of integrity, in a broader sense.
One important encouraging feature of Rémy Cointreau is that it is growing profits. On top of that, my faith in the board of directors is strengthened by the fact of the reasonable CEO pay. So I do think the stock deserves further research, if not instant addition to your watchlist. Of course, just because Rémy Cointreau is growing does not mean it is undervalued. If you're wondering about the valuation, check outthis gauge of its price-to-earnings ratio, as compared to its industry.
You can invest in any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here isa list of companies with insider buying in the last three months.
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. |
Does St. Galler Kantonalbank AG (VTX:SGKN) Have A Good P/E Ratio?
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The goal of this article is to teach you how to use price to earnings ratios (P/E ratios). We'll apply a basic P/E ratio analysis to St. Galler Kantonalbank AG's (VTX:SGKN), to help you decide if the stock is worth further research.What is St. Galler Kantonalbank's P/E ratio?Well, based on the last twelve months it is 15.39. In other words, at today's prices, investors are paying CHF15.39 for every CHF1 in prior year profit.
View our latest analysis for St. Galler Kantonalbank
Theformula for price to earningsis:
Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
Or for St. Galler Kantonalbank:
P/E of 15.39 = CHF438.5 ÷ CHF28.49 (Based on the trailing twelve months to December 2018.)
A higher P/E ratio means that investors are payinga higher pricefor each CHF1 of company earnings. That is not a good or a bad thingper se, but a high P/E does imply buyers are optimistic about the future.
P/E ratios primarily reflect market expectations around earnings growth rates. If earnings are growing quickly, then the 'E' in the equation will increase faster than it would otherwise. And in that case, the P/E ratio itself will drop rather quickly. A lower P/E should indicate the stock is cheap relative to others -- and that may attract buyers.
St. Galler Kantonalbank's earnings per share were pretty steady over the last year. But EPS is up 7.8% over the last 5 years.
The P/E ratio indicates whether the market has higher or lower expectations of a company. The image below shows that St. Galler Kantonalbank has a P/E ratio that is roughly in line with the banks industry average (16).
That indicates that the market expects St. Galler Kantonalbank will perform roughly in line with other companies in its industry. So if St. Galler Kantonalbank actually outperforms its peers going forward, that should be a positive for the share price. Further research into factors such asmanagement tenure, could help you form your own view on whether that is likely.
The 'Price' in P/E reflects the market capitalization of the company. Thus, the metric does not reflect cash or debt held by the company. 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).
While growth expenditure doesn't always pay off, the point is that it is a good option to have; but one that the P/E ratio ignores.
St. Galler Kantonalbank's net debt is considerable, at 167% of its market cap. This level of debt justifies a relatively low P/E, so remain cognizant of the debt, if you're comparing it to other stocks.
St. Galler Kantonalbank trades on a P/E ratio of 15.4, which is below the CH market average of 18.2. It's good to see EPS growth in the last 12 months, but the debt on the balance sheet might be muting expectations.
Investors should be looking to buy stocks that the market is wrong about. As value investor Benjamin Graham famously said, 'In the short run, the market is a voting machine but in the long run, it is a weighing machine.' Although we don't have analyst forecasts, you could get a better understanding of its growth by checking outthis more detailed historical graphof earnings, revenue and cash flow.
But note:St. Galler Kantonalbank 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. |
What Percentage Of Nabaltec AG (ETR:NTG) Shares Do Insiders Own?
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If you want to know who really controls Nabaltec AG (ETR:NTG), then you'll have to look at the makeup of its share registry. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. 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.'
With a market capitalization of €317m, Nabaltec is a small cap stock, so it might not be well known by many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about NTG.
Check out our latest analysis for Nabaltec
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 29% of Nabaltec. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Nabaltec, (below). Of course, keep in mind that there are other factors to consider, too.
Nabaltec is not owned by hedge funds. There is some analyst coverage of the stock, but it could still become more well known, with time.
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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders own the majority of Nabaltec AG. This means they can collectively make decisions for the company. Given it has a market cap of €317m, that means they have €176m worth of shares. It is good to see this level of investment. You cancheck here to see if those insiders have been buying recently.
The general public holds a 16% stake in NTG. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
It's always worth thinking about the different groups who own shares in a company. But to understand Nabaltec better, we need to consider many other factors.
Many find it usefulto take an in depth look at how a company has performed in the past. You can accessthisdetailed graphof past earnings, revenue and cash flow.
Ultimatelythe future is most important. You can access thisfreereport on analyst forecasts for the company.
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 Investigate SJR in Scandinavia AB (publ) (STO:SJR B) At kr38.80?
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SJR in Scandinavia AB (publ) (STO:SJR B), which is in the professional services business, and is based in Sweden, saw significant share price movement during recent months on the OM, rising to highs of SEK51.6 and falling to the lows of SEK35.8. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether SJR in Scandinavia's current trading price of SEK38.8 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at SJR in Scandinavia’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for SJR in Scandinavia
The stock seems fairly valued at the moment according to my relative valuation model. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 16.13x is currently trading in-line with its industry peers’ ratio, which means if you buy SJR in Scandinavia today, you’d be paying a relatively reasonable price for it. In addition to this, it seems like SJR in Scandinavia’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 50% over the next couple of years, the future seems bright for SJR in Scandinavia. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
Are you a shareholder?It seems like the market has already priced in SJR B’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at SJR B? Will you have enough conviction to buy should the price fluctuate below the true value?
Are you a potential investor?If you’ve been keeping an eye on SJR B, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for SJR B, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on SJR in Scandinavia. You can find everything you need to know about SJR in Scandinavia inthe latest infographic research report. If you are no longer interested in SJR in Scandinavia, 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. |
Should You Be Concerned With Koenig & Bauer AG's (FRA:SKB) -17% Earnings Drop?
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Assessing Koenig & Bauer AG's (FRA:SKB) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess SKB's latest performance announced on 31 March 2019 and evaluate these figures to its historical trend and industry movements.
See our latest analysis for Koenig & Bauer
SKB's trailing twelve-month earnings (from 31 March 2019) of €61m has declined by -17% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 60%, indicating the rate at which SKB is growing has slowed down. What could be happening here? Let's examine what's occurring with margins and if the entire industry is experiencing the hit as well.
In terms of returns from investment, Koenig & Bauer has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. Furthermore, its return on assets (ROA) of 5.3% is below the DE Machinery industry of 5.5%, indicating Koenig & Bauer's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Koenig & Bauer’s debt level, has increased over the past 3 years from 5.6% to 11%.
Though Koenig & Bauer's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. I suggest you continue to research Koenig & Bauer to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for SKB’s future growth? Take a look at ourfree research report of analyst consensusfor SKB’s outlook.
2. Financial Health: Are SKB’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. |
Malaysia's 1MDB criminal case against Goldman Sachs delayed to September
KUALA LUMPUR (Reuters) - Malaysia's criminal case against U.S. investment bank Goldman Sachs involving $6.5 billion 1MDB bonds will be postponed to September, a court ruled on Monday, after defense lawyers asked for more time to receive instructions from their clients abroad.
Malaysian prosecutors had previously issued summonses to three Goldman Sachs units in the United Kingdom, Hong Kong and Singapore, requiring them to respond to criminal charges filed against them over bond issues that the bank had arranged for state fund 1Malaysia Development Berhad (1MDB).
The U.S. Department of Justice estimates $4.5 billion was misappropriated from 1MDB between 2009 and 2014, including some of the funds that Goldman Sachs helped raise.
Goldman Sachs has consistently denied wrongdoing.
On Monday, a lawyer for the bank said Goldman Sachs (Asia) LLC, based in Hong Kong, had only received its summons in the past week, while another summons issued to the bank's Singapore unit was incomplete, with just three out of four charges served.
"Under such circumstances, we ask for another date... so that we will have enough time to take instructions from our clients," lawyer Hisyam Teh told the court.
The court then fixed Sept 30 for case management.
Last December, Malaysian prosecutors had filed charges against the three Goldman Sachs units for misleading investors by making untrue statements and omitting key facts in relation to bond issues that the bank had arranged for 1MDB.
The bank says certain members of the former Malaysian government and 1MDB lied to it about how proceeds from the bond sales would be used.
Malaysia has said it was seeking up to $7.5 billion in reparations from Goldman over its dealings with 1MDB, set up in 2009 by then prime minister Najib Razak.
Najib, who lost a general election last year, is facing 42 criminal charges related to losses at 1MDB and other state entities. He has pleaded not guilty.
(Reporting by Rozanna Latiff; Editing by Michael Perry) |
Here's Why We Think Beiersdorf (ETR:BEI) Is Well Worth Watching
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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.
So if you're like me, you might be more interested in profitable, growing companies, likeBeiersdorf(ETR:BEI). Now, I'm not saying that the stock is necessarily undervalued today; but I can't shake an appreciation for the profitability of the business itself. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.
See our latest analysis for Beiersdorf
Even modest earnings per share growth (EPS) can create meaningful value, when it is sustained reliably from year to year. So it's no surprise that some investors are more inclined to invest in profitable businesses. Beiersdorf has grown its trailing twelve month EPS from €2.96 to €3.21, in the last year. That amounts to a small improvement of 8.3%.
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 we note Beiersdorf's EBIT margins were flat over the last year, revenue grew by a solid 2.5% to €7.2b. That's a real positive.
The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.
The trick, as an investor, is to find companies that aregoing toperform well in the future, not just in the past. To that end, right now and today, you can checkour visualization of consensus analyst forecasts for future Beiersdorf EPS100% free.
As a general rule, I think it worth considering how much the CEO is paid, since unreasonably high rates could be considered against the interests of shareholders. I discovered that the median total compensation for the CEOs of companies like Beiersdorf, with market caps over €7.1b, is about €4.2m.
The Beiersdorf CEO received €3.0m in compensation for the year ending December 2018. That seems pretty reasonable, especially given its below the median for similar sized companies. While the level of CEO compensation isn't a huge factor in my view of the company, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. I'd also argue reasonable pay levels attest to good decision making more generally.
One positive for Beiersdorf is that it is growing EPS. That's nice to see. On top of that, my faith in the board of directors is strengthened by the fact of the reasonable CEO pay. So I do think the stock deserves further research, if not instant addition to your watchlist. 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 Beiersdorf.
Although Beiersdorf 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. |
Is Antares Vision S.p.A.'s (BIT:AV) Balance Sheet Strong Enough To Weather A Storm?
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While small-cap stocks, such as Antares Vision S.p.A. (BIT:AV) with its market cap of €607m, are popular for their explosive growth, investors should also be aware of their balance sheet to judge whether the company can survive a downturn. Understanding the company's financial health becomes crucial, since poor capital management may bring about bankruptcies, which occur at a higher rate for small-caps. We'll look at some basic checks that can form a snapshot the company’s financial strength. However, potential investors would need to take a closer look, and I recommend youdig deeper yourself into AV here.
AV has built up its total debt levels in the last twelve months, from €7.5m to €34m , which includes long-term debt. With this increase in debt, AV currently has €63m remaining in cash and short-term investments to keep the business going. Additionally, AV has generated €14m in operating cash flow in the last twelve months, resulting in an operating cash to total debt ratio of 43%, indicating that AV’s debt is appropriately covered by operating cash.
At the current liabilities level of €43m, it appears that the company has maintained a safe level of current assets to meet its obligations, with the current ratio last standing at 3.09x. The current ratio is calculated by dividing current assets by current liabilities. However, a ratio above 3x may be considered excessive by some investors, yet this is not usually a major negative for a company.
AV is a relatively highly levered company with a debt-to-equity of 47%. This is a bit unusual for a small-cap stock, since they generally have a harder time borrowing than large more established companies. 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 before interest and tax (EBIT) at least three times its net interest payments is considered financially sound. In AV's case, the ratio of 99.61x suggests that interest is comfortably covered, which means that lenders may be willing to lend out more funding as AV’s high interest coverage is seen as responsible and safe practice.
Although AV’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. Since there is also no concerns around AV's liquidity needs, this may be its optimal capital structure for the time being. Keep in mind I haven't considered other factors such as how AV has been performing in the past. You should continue to research Antares Vision to get a better picture of the small-cap by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for AV’s future growth? Take a look at ourfree research report of analyst consensusfor AV’s outlook.
2. Valuation: What is AV 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 AV 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. |
Lower for longer: Supply glut in focus as Asia's biggest coal meet begins
By Melanie Burton and Fransiska Nangoy
NUSA DUA, Indonesia (Reuters) - Slowing economic growth in China is weighing on demand expectations for thermal coal in the world's biggest market for the fuel, while global moves towards cleaner energy are compounding problems arising from a glut in supply.
This supply-demand tandem is likely to keep prices for coal used in power plants and the manufacture of cement under pressure in coming months and perhaps longer, industry sources said as Asia's biggest coal conference got underway.
Prices for benchmark premium Australian coal out of Newcastle hit their weakest since September 2016 last week at $70.78 per tonne and are likely to fall further given a slowing global economy.
In top consumer China, factory activity weakened in April and May, hit hard by a bruising trade war with the United States. That accounts for some, but hardly all, of the 4.9% fall in China's coal-fired power generation in May compared with the year before, said analyst Helen Lau at Argonaut in Hong Kong.
"Weak consumption of thermal coal is mainly because of increasing competition from hydro and other clean energy," she said in a report.
Coal at China's Qinhuang port has fallen as well, to $95.53 per tonne on June 10, according to price publisher McCloskey, a whisker from two year lows.
"Thermal coal is under huge pressure at this moment, even though demand should pick up during summer time," said a coal trader based in Jingtang port. Jingtang is a major coal-receiving port in northern China.
"I cannot make money with current prices, so I am diverting my business and doing some niche products like pulverised coal now," the trader said.
A major culprit is the expansion of the use of cheap natural gas in Europe, said an energy trader in Singapore.
"Cheap gas in the United States is moving into Europe and that is pushing coal from South Africa and Colombia across to Asia. Russia has also ramped up selling in the Pacific basin," he said.
China's wind-generated power grew 5.6 percent in the first five months of the year, hydroelectric power grew 12.8 percent, compared with 0.2 percent growth in LNG and coal combined, according to Commonwealth Bank of Australia (CBA).
A prolonged period of low thermal prices may signal that the global economy is decarbonising - that is, moving away from carbon-based fuels to renewables such as solar and wind power - at a faster rate than expected, said CBA analyst Vivek Dhar.
This may hurt Australia the most because developed countries, which can afford to pay more for the high-energy, less-polluting coal it produces, are decarbonising at the fastest rates, Dhar said.
Germany already sources 40% of its power from renewable energy and has set a target of 65% by 2030. Britain is set this year to use more electricity from zero-carbon sources than from fossil fuel plants for the first time.
Already, prices for Newcastle 6,000-kilocalorie coal, have slumped around 58 percent since September, compared with a more modest decline of 20 percent for 5,500-kilocalorie grades, which were last trading at $51 a tonne, according to commodities pricing agency S&P Global Platts.
"I think the Australians are going to feel it," the Singapore energy trader said.
(Reporting by Melanie Burton in MELBOURNE and Fransiska Nangoy in JAKARTA; Additional reporting by Muyu Xu in BEIJING; Editing by Tom Hogue) |
How Do SSAB AB (publ)’s (STO:SSAB A) Returns Compare To Its Industry?
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Today we'll look at SSAB AB (publ) (STO:SSAB A) and reflect on its potential as an investment. In particular, we'll consider its Return On Capital Employed (ROCE), as that can give us insight into how profitably the company is able to employ capital in its business.
First of all, we'll work out how to calculate ROCE. Then we'll compare its ROCE to similar companies. Last but not least, we'll look at what impact its current liabilities have on its ROCE.
ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. Generally speaking a higher ROCE is better. 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 SSAB:
0.07 = kr5.2b ÷ (kr98b - kr23b) (Based on the trailing twelve months to March 2019.)
So,SSAB has an ROCE of 7.0%.
Check out our latest analysis for SSAB
One way to assess ROCE is to compare similar companies. Using our data, SSAB's ROCE appears to be significantly below the 16% average in the Metals and Mining industry. This performance is not ideal, as it suggests the company may not be deploying its capital as effectively as some competitors. Aside from the industry comparison, SSAB's ROCE is mediocre in absolute terms, considering the risk of investing in stocks versus the safety of a bank account. It is possible that there are more rewarding investments out there.
SSAB has an ROCE of 7.0%, but it didn't have an ROCE 3 years ago, since it was unprofitable. This makes us wonder if the company is improving.
It is important to remember that ROCE shows past performance, and is 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. We note SSAB could be considered a cyclical business. Since the future is so important for investors, you should check out ourfreereport on analyst forecasts for SSAB.
Short term (or current) liabilities, are things like supplier invoices, overdrafts, or tax bills that 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.
SSAB has total assets of kr98b and current liabilities of kr23b. As a result, its current liabilities are equal to approximately 24% of its total assets. It is good to see a restrained amount of current liabilities, as this limits the effect on ROCE.
That said, SSAB's ROCE is mediocre, there may be more attractive investments around. Of course,you might also be able to find a better stock than SSAB. So you may wish to see thisfreecollection of other companies that have grown earnings strongly.
If you are like me, then you willnotwant to miss thisfreelist of growing companies that insiders are buying.
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. |
U.S. regulators ask Deutsche Bank to explain "bad bank" proposal -FT
June 24 (Reuters) - U.S. regulators have sought explanation from Deutsche Bank AG about its "bad bank" proposal and its impact on U.S. operations at the loss-making German lender, the Financial Times reported on Monday.
Officials at the U.S. Federal Reserve are concerned on learning about Deutsche Bank's strategy and have sought further details of the plan, which is part of the lender's move away from investment banking, FT reported https://on.ft.com/2J8pt6S, citing sources.
Deutsche Bank and the Fed did not immediately respond to a Reuters request for comment on the matter.
Reuters reported earlier this month that Deutsche Bank was planning to overhaul its trading operations by creating a so-called "bad bank" to hold tens of billions of euros of non-core assets.
The overhaul would also include shrinking or shutting equity and rates trading businesses outside of Europe, a source had told Reuters.
The bank also reportedly faces probe over its alleged failure to comply with laws meant to stop money laundering and other matters. The investigation involves problematic transactions, some of which are linked to U.S. President Donald Trump's son-in-law and senior adviser, Jared Kushner.
A Deutsche Bank spokesperson said last week: "We remain committed to cooperating with authorized investigations." (Reporting by Aishwarya Nair in Bengaluru; editing by Gopakumar Warrier) |
Why We’re Not Keen On SSAB AB (publ)’s (STO:SSAB A) 7.0% Return On Capital
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Today we'll look at SSAB AB (publ) (STO:SSAB A) and reflect on its potential as an investment. To be precise, we'll consider its Return On Capital Employed (ROCE), as that will inform our view of the quality of the business.
First up, we'll look at what ROCE is and how we calculate it. Second, we'll look at its ROCE compared to similar companies. Finally, we'll look at how its current liabilities affect its ROCE.
ROCE measures the 'return' (pre-tax profit) a company generates from capital employed in its business. Generally speaking a higher ROCE is better. Overall, it is a valuable metric that has its flaws. 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 SSAB:
0.07 = kr5.2b ÷ (kr98b - kr23b) (Based on the trailing twelve months to March 2019.)
So,SSAB has an ROCE of 7.0%.
Check out our latest analysis for SSAB
One way to assess ROCE is to compare similar companies. In this analysis, SSAB's ROCE appears meaningfully below the 16% average reported by the Metals and Mining industry. This performance could be negative if sustained, as it suggests the business may underperform its industry. Setting aside the industry comparison for now, SSAB's ROCE is mediocre in absolute terms, considering the risk of investing in stocks versus the safety of a bank account. Investors may wish to consider higher-performing investments.
SSAB reported an ROCE of 7.0% -- better than 3 years ago, when the company didn't make a profit. That suggests the business has returned to profitability.
It is important to remember that ROCE shows past performance, and is 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 only a point-in-time measure. Remember that most companies like SSAB are cyclical businesses. Future performance is what matters, and you can see analyst predictions in ourfreereport on analyst forecasts for the company.
Current liabilities are short term bills and invoices that need to be paid in 12 months or less. 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 check the impact of this, we calculate if a company has high current liabilities relative to its total assets.
SSAB has total assets of kr98b and current liabilities of kr23b. Therefore its current liabilities are equivalent to approximately 24% of its total assets. This very reasonable level of current liabilities would not boost the ROCE by much.
With that in mind, we're not overly impressed with SSAB's ROCE, so it may not be the most appealing prospect. Of course,you might also be able to find a better stock than SSAB. So you may wish to see thisfreecollection of other companies that have grown earnings strongly.
I will like SSAB better if I see some big insider buys. While we wait, check out thisfreelist of growing companies with considerable, recent, insider buying.
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. |
Nomura shareholders vote to keep embattled CEO
By Takashi Umekawa
TOKYO (Reuters) - Japan's Nomura Holdings Inc won shareholder approval on Monday for the re-appointment of its chief executive officer, overcoming concerns about the leaking of market information and its first annual loss in a decade.
CEO Koji Nagai kept his job despite opposition from influential proxy advisory firm Institutional Shareholder Services Inc, which had recommended shareholders vote against his re-appointment.
The vote was in effect an endorsement of Nagai's efforts to turn around the investment bank, which reported an annual loss in April and said it would not pay out bonuses to directors.
Nomura was ordered by the financial watchdog last month to improve its internal controls following the leak of information related to listing and delisting criteria at the Tokyo Stock Exchange.
"We sincerely apologize for causing great trouble and worry to investors," Nagai told the annual general meeting on Monday. All the executives on stage bowed in contrition following his remarks.
The meeting lasted for more than three hours as shareholders threw questions at executives. When asked why he did not resign, Nagai said he felt a duty to "steadily proceed with business improvement measures".
Nomura has said an employee from its Nomura Research Institute affiliate leaked information about expected changes to listing rules to the chief strategist of its securities arm, who informed sales staff. The sales staff then told clients.
Nagai, who became the group CEO in 2012, has said he will take a 30% pay cut for three months over the scandal.
While Nomura's share price has been trending down, it surged more than 10% last week after the firm announced a $1.4 billion buyback. It rose 0.3% in Monday's trading.
(Reporting by Takashi Umekawa; Editing by Stephen Coates) |
How Does Investing In Stabilus S.A. (FRA:STM) Impact The Volatility Of Your Portfolio?
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Anyone researching Stabilus S.A. (FRA:STM) 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. The first category is company specific volatility. This can be dealt with by limiting your exposure to any particular stock. 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 mimic the volatility of the market quite closely, while others demonstrate muted, exagerrated or uncorrelated price movements. Some investors use beta as a measure of how much a certain stock is impacted by market risk (volatility). While we should keep in mind that Warren Buffett has cautioned that 'Volatility is far from synonymous with risk', beta is still a useful factor to consider. To make good use of it you must first know that the beta of the overall market is one. Any stock with a beta of greater than one is considered more volatile than the market, while those with a beta below one are either less volatile or poorly correlated with the market.
Check out our latest analysis for Stabilus
Given that it has a beta of 0.82, we can surmise that the Stabilus share price has not been strongly impacted by broader market volatility (over the last 5 years). If history is a good guide, owning the stock should help ensure that your portfolio is not overly sensitive to market volatility. Many would argue that beta is useful in position sizing, but fundamental metrics such as revenue and earnings are more important overall. You can see Stabilus's revenue and earnings in the image below.
Stabilus is a small cap stock with a market capitalisation of €945m. Most companies this size are actively traded. Small cap stocks ofthen have a higher beta than the overall market. However, small companies can also be strongly impacted by company specific developments, which can move the share price in ways that are unrelated to the broader market. That could explain why this one has a low beta value.
The Stabilus doesn't usually show much sensitivity to the broader market. This could be for a variety of reasons. Typically, smaller companies have a low beta if their share price tends to move a lot due to company specific developments. Alternatively, an strong dividend payer might move less than the market because investors are valuing it for its income stream. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as Stabilus’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 STM’s future growth? Take a look at ourfree research report of analyst consensusfor STM’s outlook.
2. Past Track Record: Has STM 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 STM's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how STM 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. |
What You Must Know About Stabilus S.A.'s (FRA:STM) Beta Value
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If you own shares in Stabilus S.A. (FRA:STM) then it's worth thinking about how it contributes to the volatility of your portfolio, overall. In finance, Beta is a measure of volatility. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. The first category is company specific volatility. This can be dealt with by limiting your exposure to any particular stock. The second type is the broader market volatility, which you cannot diversify away, since it arises from macroeconomic factors which directly affects all the stocks on the market.
Some stocks mimic the volatility of the market quite closely, while others demonstrate muted, exagerrated or uncorrelated price movements. Beta can be a useful tool to understand how much a stock is influenced by market risk (volatility). However, Warren Buffett said 'volatility is far from synonymous with risk' in his 2014 letter to investors. So, while useful, beta is not the only metric to consider. To use beta as an investor, you must first understand that the overall market has a beta of one. Any stock with a beta of greater than one is considered more volatile than the market, while those with a beta below one are either less volatile or poorly correlated with the market.
Check out our latest analysis for Stabilus
Zooming in on Stabilus, we see it has a five year beta of 0.82. This is below 1, so historically its share price has been rather independent from the market. This means that -- if history is a guide -- buying the stock would reduce the impact of overall market volatility in many portfolios (depending on the beta of the portfolio, of course). Many would argue that beta is useful in position sizing, but fundamental metrics such as revenue and earnings are more important overall. You can see Stabilus's revenue and earnings in the image below.
Stabilus is a small cap stock with a market capitalisation of €945m. Most companies this size are actively traded. Small companies can have a low beta value when company specific factors outweigh the influence of overall market volatility. That might be happening here.
The Stabilus doesn't usually show much sensitivity to the broader market. This could be for a variety of reasons. Typically, smaller companies have a low beta if their share price tends to move a lot due to company specific developments. Alternatively, an strong dividend payer might move less than the market because investors are valuing it for its income stream. In order to fully understand whether STM is a good investment for you, we also need to consider important company-specific fundamentals such as Stabilus’s financial health and performance track record. I highly recommend you dive deeper by considering the following:
1. Future Outlook: What are well-informed industry analysts predicting for STM’s future growth? Take a look at ourfree research report of analyst consensusfor STM’s outlook.
2. Past Track Record: Has STM 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 STM's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how STM 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. |
Oxatis SA (EPA:ALOXA): Are Analysts Bullish?
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In April 2019, Oxatis SA (EPA:ALOXA) announced its most recent earnings update, which confirmed company earnings became less negative compared to the previous year's level - great news for investors Below is my commentary, albeit very simple and high-level, on how market analysts predict Oxatis's earnings growth outlook over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Check out our latest analysis for Oxatis
Analysts' expectations for the upcoming year seems optimistic, with earnings becoming less negative, arriving at -€3.6m in 2020. However, earnings should fall off in the following year, falling to -€2.5m in 2021 and -€893.6k in 2022.
Although it is helpful to understand the growth each year relative to today’s level, it may be more valuable estimating the rate at which the company is moving every year, on average. The pro of this method is that it ignores near term flucuations and accounts for the overarching direction of Oxatis'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 analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 41%. This means that, we can expect Oxatis will grow its earnings by 41% every year for the next few years.
For Oxatis, I've put together three key 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. Future Earnings: How does ALOXA'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-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ALOXA? 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. |
Pompeo sets out to build global coalition against Iran
WASHINGTON (AP) — Secretary of State Mike Pompeo said he wants to build a global coalition against Iran during urgent consultations in the Middle East, following a week of crisis that saw the United States pull back from the brink of a military strike on Iran. Pompeo spoke Sunday as he left Washington for Saudi Arabia, followed by the United Arab Emirates, Sunni Arab allies that are alarmed by Shiite Iran's increasing assertiveness and are working to limit its influence in the region. His stops in Jeddah and Abu Dhabi were hastily arranged late last week as additions to a trip to India from where he will join President Donald Trump in Japan and South Korea. But they were not announced until immediately before his departure in a sign of fast-moving and unpredictable developments. "We'll be talking with them about how to make sure that we are all strategically aligned, and how we can build out a global coalition, a coalition not only throughout the Gulf states, but in Asia and in Europe, that understands this challenge as it is prepared to push back against the world's largest state sponsor of terror," Pompeo said about Iran. But even as Pompeo delivered his tough talk, he echoed President Donald Trump and Vice President Mike Pence in saying the U.S. is prepared to negotiate with Iran, without preconditions, in a bid to ease tensions. Those tensions have been mounting since Trump last year withdrew the U.S. from a global nuclear deal with Iran and began pressuring Tehran with economic sanctions. A fresh round of Iran sanctions is to be announced Monday in a bid to force the Iranian leadership into talks. "They know precisely how to find us," Pompeo said. It was a week of topsy-turvy pronouncements on U.S. policy toward Iran that careened between the bellicose, the conciliatory and back again after Iran shot down an American military drone and boasted it would not bow to Washington's pressure. Story continues Trump initially said Iran had made a "very big mistake" and that it was "hard to believe" that shooting down the drone on Thursday was not intentional. He later said he thought it was an unintentional act carried out by a "loose and stupid" Iranian and called off retaliatory military strikes against Iran. On Saturday, Trump reversed himself and claimed that Iran had acted "knowingly." But Trump also said over the weekend that he appreciated Iran's decision to not shoot down a manned U.S. spy plane, and he opined about eventually becoming Iran's "best friend" if Tehran ultimately agrees to abandon its drive to build nuclear weapons and he helps the country turn around its crippled economy. Then Trump's national security adviser, John Bolton, stepped in Sunday with a blunt warning from Jerusalem, where he was traveling. Bolton said Iran should not "mistake U.S. prudence and discretion for weakness" after Trump called off the military strike. Trump said he backed away from the planned strikes after learning that about 150 people would be killed, but he said the military option remained. A longtime Iran hawk, Bolton emphasized that the U.S. reserved the right to attack at a later point. "No one has granted them a hunting license in the Middle East. As President Trump said on Friday our military is rebuilt, new and ready to go," Bolton said during an appearance with Israeli Prime Minister Benjamin Netanyahu, himself a longtime and outspoken Iran critic. On Sunday, Iranian President Hassan Rouhani blamed the United States' "interventionist military presence" for fanning the flames. He was quoted by the official IRNA news agency. Shortly thereafter, Iranian-backed Houthi rebels in Yemen launched an attack against an airport in southern Saudi Arabia, killing one person and wounding seven others, according to the Saudi military. Such attacks have been cited by Saudi and U.S. officials as examples of Iran's "malign behavior" in the Middle East. Pompeo, who addressed reporters from the tarmac before he boarded his airplane in Washington, declared the goal of his talks with the Saudi kingdom and the UAE is to deny Iran "the resources to foment terror, to build out their nuclear weapon system, to build out their missile program." "We are going to deny them the resources they need to do that, thereby keep American interests and American people safe all around the world," said Pompeo, who was due to arrive in the region after one person was killed and seven others were wounded in an attack by Iranian-allied Yemeni rebels on an airport in Saudi Arabia on Sunday evening, the Saudi military said. The downing of the unmanned aircraft marked a new high in the rising tensions between the United States and Iran. The Trump administration has vowed to combine a "maximum pressure" campaign of economic sanctions with a buildup of American forces in the region, following the U.S. withdrawal from the 2015 nuclear deal between Iran and world powers. U.S. military cyber forces on Thursday launched a strike against Iranian military computer systems, according to U.S. officials. The cyberattacks disabled Iranian Revolutionary Guard Corps computer systems that controlled its rocket and missile launchers, the officials said. Throughout the recent crisis, Trump has wavered between bellicose language and actions toward Iran and a more accommodating tone, including a plea for negotiations. Iran has said it is not interested in a dialogue with Trump. His administration is aiming to cripple Iran's economy and force policy changes by re-imposing sanctions, including on Iranian oil exports. ___ Associated Press writers Aron Heller in Jerusalem, Nasser Karimi in Tehran, Iran, Aya Batrawy in Dubai, United Arab Emirates, and Matthew Lee in Bahrain contributed to this report. ___ Follow Darlene Superville on Twitter: http://www.twitter.com/dsupervilleap |
Should Sweco AB (publ) (STO:SWEC B) Be Your Next Stock Pick?
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Sweco AB (publ) (STO:SWEC B) 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 SWEC B, it is a company with great financial health as well as a an impressive history of performance. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at thereport on Sweco here.
Over the past few years, SWEC B has demonstrated a proven ability to generate robust returns of 20% Not surprisingly, SWEC B outperformed its industry which returned 24%, giving us more conviction of the company's capacity to drive bottom-line growth going forward. SWEC B'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 key determinant of the company’s health. SWEC B appears to have made good use of debt, producing operating cash levels of 0.71x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
For Sweco, I've put together three fundamental factors you should further examine:
1. Future Outlook: What are well-informed industry analysts predicting for SWEC B’s future growth? Take a look at ourfree research report of analyst consensusfor SWEC B’s outlook.
2. Valuation: What is SWEC B 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 SWEC B is currently mispriced by the market.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of SWEC B? 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. |
UPDATE 3-U.S. cyber attacks on Iranian targets not successful, Iran minister says
(Adds Mousavi comments)
LONDON, June 24 (Reuters) - U.S. cyber attacks against Iranian targets have not been successful, Iran's telecoms minister said on Monday, after reports that the Pentagon had launched a long-planned cyber attack to disable his country's rocket launch systems.
Tension is running high between longtime foes Iran and the United States after U.S. President Donald Trump on Friday said he called off a military strike to retaliate for Iran's downing of a U.S. drone.
However, Yahoo News reported on Thursday that the United States had launched cyber attacks, even as Trump backed away from a conventional attack.
The Washington Post said on Saturday that the cyber strikes, which were previously planned, had disabled Iranian rocket launch systems. U.S. officials have declined to comment.
"They try hard, but have not carried out a successful attack," Mohammad Javad Azari Jahromi, Iran's minister for information and communications technology, said on Twitter.
"Media asked if the claimed cyber attacks against Iran are true," he said. "Last year we neutralised 33 million attacks with the (national) firewall."
Azari Jahromi called attacks on Iranian computer networks "cyber-terrorism", referring to Stuxnet, a computer virus widely believed to have been developed by the United States and Israel, which was discovered in 2010 after it was used to attack a uranium enrichment facility in the Iranian city of Natanz.
The United States has also accused Iran of stepping up cyber attacks.
Iran's foreign ministry spokesman, Abbas Mousavi, said Iran's cyber defence system was strong, and that Iran could legally pursue such aggression in international courts.
He was quoted by ISNA news agency as saying that Tehran welcomed "defusion of tensions" in the region.
"We do not want rise of tensions and its consequences."
Last year, Trump withdrew the United States from a 2015 accord between Iran and world powers that curbed Tehran's nuclear programme in exchange for easing sanctions. Relations in the region have worsened significantly since then.
Trump said on Sunday he was not seeking war with Iran and would be prepared to seek a deal to bolster its flagging economy, an apparent move to defuse tensions.
Trump has suggested that he backed off a military strike against Iran because he was not sure the country's top leadership had intended to shoot down the drone. However, an Iranian commander said Tehran was prepared to do it again.
"Everyone saw the downing of the unmanned drone," navy commander Rear Admiral Hossein Khanzadi was quoted on Sunday as saying by the Tasnim news agency. "I can assure you that this firm response can be repeated, and the enemy knows it." (Reporting by Bozorgmehr Sharafedin Editing by Clarence Fernandez, Robert Birsel) |
Should You Be Holding Sweco AB (publ) (STO:SWEC B)?
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Sweco AB (publ) (STO:SWEC B) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of SWEC B, it is a company with great financial health as well as a an impressive history of performance. Below, I've touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, take a look at thereport on Sweco here.
SWEC B delivered a satisfying double-digit returns of 20% in the most recent year Unsurprisingly, SWEC B surpassed the Construction industry return of 24%, which gives us more confidence of the company's capacity to drive earnings going forward. SWEC B'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 implies that SWEC B manages its cash and cost levels well, which is a key determinant of the company’s health. SWEC B's has produced operating cash levels of 0.71x total debt over the past year, which implies that SWEC B's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For Sweco, I've compiled three key factors you should further research:
1. Future Outlook: What are well-informed industry analysts predicting for SWEC B’s future growth? Take a look at ourfree research report of analyst consensusfor SWEC B’s outlook.
2. Valuation: What is SWEC B 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 SWEC B is currently mispriced by the market.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of SWEC B? 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. |
Ex-Missouri coach Gary Pinkel receiving cancer treatment again
Former Missouri coach Gary Pinkel says he has had a recurrence of cancer. (Photo by Wesley Hitt/Getty Images) Former Missouri Tigers head coach Gary Pinkel announced on Sunday that he is receiving cancer treatments for non-Hodgkin lymphoma again. Pinkel stepped down as Mizzou’s coach at 63 at the end of 2015 season to spend more time with his family after being diagnosed that May. A little over a year later, Pinkel announced that he was in remission , although it always would be at threat of reappearing. In an interview with KMIZ , Pinkel gave an update on the recurrence of his lymphoma: “I’m doing good,” Pinkel said. “I had to get treatment again for the first time in four years. My cancer came out of remission, and so I had treatment last month. I’m doing fine. With my type of lymphoma, you'll never be healed. But that's kind of why I retired when I did — I just wanted to not go back and regret working 85 hours a week, 35 weeks out of the year when I could be doing other things with my family and my eight grandkids.” Upon his retirement, Pinkel discussed having a small role with Missouri but ultimately has shied away from the game. Instead, he has started the GP M.A.D.E. foundation , which supports children with cancer, physical challenges or economic and social challenges. “You keep battling it,” Pinkel said. “I’m going to battle it. I’ve got a very positive approach to it, and I’m around a lot of good people that are helping me. There’s a lot of people out there with a lot worse cancers than Gary Pinkel has, and so prayers to all of them.” Pinkel coached the Tigers for 15 seasons and led their transition from the Big 12 to the SEC in 2012. He twice led 12-2 teams, including a 2007 team that reached No. 1 in the AP Poll and finished the season at No. 4 after a Cotton Bowl win. He also won back-to-back SEC East titles in 2013 and 2014. Since Pinkel’s departure, Missouri is 19-19 under Barry Odom but 0-2 in bowl games. They briefly cracked the top-25 last season and finished the year 8-5. More from Yahoo Sports: Is this the best USWNT of all time? One player says yes Morgan, Ertz expected to play for U.S. against Spain LaVar Ball talks again, makes ’First Take’ drama worse Sources: UConn move to the Big East inevitable |
UPDATE 2-Quake of magnitude 7.5 shakes East Timor, Australia; no tsunami feared
(Adds details, no damage, injuries or deaths reported) DILI, June 24 (Reuters) - A powerful, deep 7.5 magnitude earthquake struck off the coasts of East Timor and Indonesia on Monday, and was felt as far away as Australia, but authorities said it did not have the potential to cause a tsunami. Strong shaking caused alarm in the East Timor capital of Dili prompting people to run out of their houses, a Reuters witness said, but there were no immediate reports of damage, injuries or deaths. The quake struck in the Banda Sea in Indonesia and was felt across northern Australia. In Darwin, around 700km (435 miles) away from the epicentre, it hit at lunchtime and office workers sought safety outside. No damage or injuries were reported. "It's probably one of the strongest I've felt in my time here in Darwin," Australian Bureau of Meteorology forecaster Chris Kent told ABC Radio Darwin. "We ended up wandering outside for about 15 minutes to let things settle down," he said. ConocoPhillips, operator of the Darwin LNG (liquefied natural gas) plant, and Inpex, operator of Ichthys LNG onshore facilities, both said their sites were operating normally following the tremor. The quake, initially recorded at a magnitude of 7.2, was at a depth 220 km (136 miles), the U.S. Geological Survey (USGS) said. Due to the quake's depth there was no tsunami threat, said the Hawaii-based Pacific Tsunami Warning Center. The Indonesian geophysics agency recorded at least one aftershock measuring over magnitude four on the Richter scale. The quake was also felt on Indonesia's holiday island of Bali, several people said on social media. But there were no immediate reports of damage or injury in Indonesia, said Rita Rosita, an official of the national disaster mitigation agency. Earlier on Monday, a strong quake of magnitude 6.1 struck the eastern province of Papua but no deaths were reported. (Reporting by Lirio Da Fonseca in Dili, Agustinus Beo Da Costa, Ed Davies, Gayatri Suroyo in Jakarta, Tom Westbrook and Sonali Paul in Sydney; Writing by Kanupriya Kapoor; Editing by Clarence Fernandez and Michael Perry) |
Read This Before Buying Abéo SA (EPA:ABEO) For Its Dividend
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Is Abéo SA (EPA:ABEO) a good dividend stock? How would you know? Dividend paying companies with growing earnings can be highly rewarding in the long term. Unfortunately, it's common for investors to be enticed in by the seemingly attractive yield, and lose money when the company has to cut its dividend payments.
With only a two-year payment history, and a 1.1% yield, investors probably think Abéo is not much of a dividend stock. Many of the best dividend stocks typically start out paying a low yield, so we wouldn't automatically cut it from our list of prospects. Some simple analysis can reduce the risk of holding Abéo for its dividend, and we'll focus on the most important aspects below.
Explore this interactive chart for our latest analysis on Abéo!
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. Abéo paid out 28% of its profit as dividends, over the trailing twelve month period. A medium payout ratio strikes a good balance between paying dividends, and keeping enough back to invest in the business. Besides, if reinvestment opportunities dry up, the company has room to increase the dividend.
In addition to comparing dividends against profits, we should inspect whether the company generated enough cash to pay its dividend. Unfortunately, while Abéo pays a dividend, it also reported negative free cash flow last year. While there may be a good reason for this, it's not ideal from a dividend perspective. 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 Abéo 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 2.44 times its EBITDA, Abéo's debt burden is within a normal range for most listed companies.
Net interest cover can be calculated by dividing earnings before interest and tax (EBIT) by the company's net interest expense. Net interest cover of 8.17 times its interest expense appears reasonable for Abéo, although we're conscious that even high interest cover doesn't make a company bulletproof.
Consider gettingour latest analysis on Abéo's financial position 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. This company's dividend has been unstable, and with a relatively short history, we think it's a little soon to draw strong conclusions about its long term dividend potential. During the past two-year period, the first annual payment was €0.48 in 2017, compared to €0.31 last year. Dividend payments have fallen sharply, down 35% over that time.
A shrinking dividend over a two-year period is not ideal, and we'd be concerned about investing in a dividend stock that lacks a solid record of growing dividends per share.
Given that dividend payments have been shrinking like a glacier in a warming world, we need to check if there are some bright spots on the horizon. It's good to see Abéo has been growing its earnings per share at 10% a year over the past 5 years. A company paying out less than a quarter of its earnings as dividends, and growing earnings at more than 10% per annum, looks to be right in the cusp of its growth phase. At the right price, we might be interested.
We'd also point out that Abéo issued a meaningful number of new shares in the past year. Trying to grow the dividend when issuing new shares reminds us of the ancient Greek tale of Sisyphus - perpetually pushing a boulder uphill. Companies that consistently issue new shares are often suboptimal from a dividend perspective.
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, the company has a conservative payout ratio, although we'd note that its cashflow in the past year was substantially lower than its reported profit. We were also glad to see it growing earnings, but it was concerning to see the dividend has been cut at least once in the past. Ultimately, Abéo 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.
Now, if you want to look closer, it would be worth checking out ourfreeresearch on Abéomanagement tenure, salary, and performance.
If you are a dividend investor, you might also want to look at ourcurated list of dividend stocks yielding 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. |
Does Adecco Group AG's (VTX:ADEN) Debt Level Pose A Problem?
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There are a number of reasons that attract investors towards large-cap companies such as Adecco Group AG (VTX:ADEN), with a market cap of CHF9.7b. Risk-averse investors who are attracted to diversified streams of revenue and strong capital returns tend to seek out these large companies. However, the key to their continued success lies in its financial health. Let’s take a look at Adecco Group’s leverage and assess its financial strength to get an idea of their ability to fund strategic acquisitions and grow through cyclical pressures. Remember this is a very top-level look that focuses exclusively on financial health, so I recommend a deeper analysisinto ADEN here.
See our latest analysis for Adecco Group
Over the past year, ADEN has maintained its debt levels at around €2.2b including long-term debt. At this stable level of debt, the current cash and short-term investment levels stands at €683m to keep the business going. Additionally, ADEN has produced €892m in operating cash flow in the last twelve months, leading to an operating cash to total debt ratio of 40%, signalling that ADEN’s operating cash is sufficient to cover its debt.
With current liabilities at €4.5b, it appears that the company has been able to meet these obligations given the level of current assets of €5.4b, with a current ratio of 1.2x. The current ratio is the number you get when you divide current assets by current liabilities. Generally, for Professional Services companies, this is a reasonable ratio as there's enough of a cash buffer without holding too much capital in low return investments.
ADEN is a relatively highly levered company with a debt-to-equity of 48%. This isn’t uncommon for large companies because interest payments on debt are tax deductible, meaning debt can be a cheaper source of capital than equity. Accordingly, large companies often have lower cost of capital due to easily obtained financing, providing an advantage over smaller companies. We can test if ADEN’s debt levels are sustainable by measuring interest payments against earnings of a company. A company generating earnings after interest and tax at least three times its net interest payments is considered financially sound. For ADEN, the ratio of 32.5x suggests that interest is comfortably covered. Large-cap investments like ADEN are often believed to be a safe investment due to their ability to pump out ample earnings multiple times its interest payments.
ADEN’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 ADEN'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 ADEN has company-specific issues impacting its capital structure decisions. I suggest you continue to research Adecco Group to get a more holistic view of the large-cap by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for ADEN’s future growth? Take a look at ourfree research report of analyst consensusfor ADEN’s outlook.
2. Valuation: What is ADEN 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 ADEN 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. |
It's time for the Mets to fire manager Mickey Callaway
Mickey Callaway’s real misfortune had been standing out in front of the New York Mets . It’s what made him the face and voice and conscience of whatever came, whatever rolled downhill and lodged under his heel, if not necessarily the cause or the consequence. His real mistake was getting tired of it. He took the job these 239 games ago, which meant that when he led with any proficiency and remembered which arm everybody threw with and did nothing to infer he was in over his head he’d still be fired, sure. But he’d also be returned his dignity -- slid through the slot under the bulletproof window -- on his way back to civilian life. Mets managers -- and general managers, for that matter -- are about 50-50 on this, because New York Mets owners go by the name Wilpon. The game is hard enough. Corralling even grown men is hard enough. It’s the self-inflicted stuff that makes it more than that, that makes it personal, that leaves a stain. That makes it unsalvageable. Mickey Callaway is not an unreasonable man. He’s not, though reasonable men don’t generally respond to common niceties with hard profanity. In that way you are free to wonder if the job has steered him toward unreasonable or if becoming unreasonable is his chosen escape route. He had an evening flight from Chicago to Philadelphia on Sunday night. Perhaps it would grant him the peace and time to sort it out himself. To ask himself if he is that guy. If that’s where this leads. It's time for the New York Mets to move on from manager Mickey Callaway. (Getty Images) Either way, the scene in his clubhouse late Sunday afternoon, in which he cursed a reporter and in so doing declared open season on that reporter in a jumpy room, stated that Mickey Callaway had lost command of both himself and that room. And that it was his own doing. And that is a problem. And, yes, it is his clubhouse. The fluff you hear about players controlling clubhouses is largely myth. When the clubhouse “goes bad” the manager is fired. When the clubhouse is “lost” the manager is fired. Conversely, a “great clubhouse” is almost always a reflection of an authoritative and respected man who does not consistently lose games on the top step. There are exceptions. The Mets are not one of them. They are not exceptional. Story continues They have not performed. The roster is flawed. Callaway has been spotty, particularly in his operation of among the worst bullpens in the game. If that sounds like blaming the weatherman for the rain, it is. That’s also the gig. Bring galoshes, man. So an irritated Callaway attempted to eject a reporter and a puffed-up Jason Vargas threatened to punch the same reporter and it all turned into a to-do that was beyond dumb, beyond embarrassing and, maybe, beyond repair. Because what’s going to happen from here? Reporters will not stop asking about the games and the strategies within them. Callaway will not be excused from answering. The bullpen likely will remain unreliable. Callaway will be the guy picking the guy for the situation, the sporting equivalent of a 4-year-old moving cold peas around on a dinner plate. Mets fans will continue to criticize him, because that’s how it goes, and the back pages may be unkind, because that’s how it goes, and certain players will subvert him with their effort, because sometimes that’s how it goes, and he’ll still be working for the Mets, because that’s the team across his chest. Mickey Callaway cursed a reporter and in so doing declared open season on that reporter in a jumpy room. (Getty Images) So a proud and charismatic baseball man who leads a 37-41 baseball team into a summer that promises to be at least weird and possibly chaotic had a bad day. A month ago the Mets -- the owner, the general manager -- showed some courage in staying with Callaway, in maintaining the “us” part of this. Whatever this is today. Now they’ve canned a good portion of Callaway’s coaching staff. Now they’ve had to apologize for his behavior. Now some of them have to be wondering about their own jobs, all except the Wilpons. These are the same people who filled that room with 37-41 ballplayers, who stuck with Callaway, who clearly were not looking for reasons to fire Callaway, but who on Sunday afternoon were presented one. Now they’ll decide if it’s still an “us” thing. The easy choice today is to fire Mickey Callaway. They wouldn’t even need to sell it. They would, in fact, just be getting on with the inevitable, as most would see it. So, they should go ahead. Fire Mickey Callaway. Because he’s not the right guy for the job. Because he couldn’t handle it. Because he made management look bad. That way, they could get on with hiring the next guy who’s not right for the job, who can’t handle it, who makes management look bad. Because, you know, somebody’s got to stand out in front of it. More from Yahoo Sports: Is this the best USWNT of all time? One player says yes Morgan, Ertz expected to play for U.S. against Spain LaVar Ball talks again, makes ’First Take’ drama worse Sources: UConn move to the Big East inevitable |
Adecco Group AG (VTX:ADEN): Time For A Financial Health Check
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Investors seeking to preserve capital in a volatile environment might consider large-cap stocks such as Adecco Group AG (VTX:ADEN) a safer option. Doing business globally, large caps tend to have diversified revenue streams and attractive capital returns, making them desirable investments for risk-averse portfolios. However, its financial health remains the key to continued success. This article will examine Adecco Group’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. Note that this commentary is very high-level and solely focused on financial health, so I suggest you dig deeper yourselfinto ADEN here.
See our latest analysis for Adecco Group
Over the past year, ADEN has maintained its debt levels at around €2.2b – this includes long-term debt. At this stable level of debt, ADEN currently has €683m remaining in cash and short-term investments , ready to be used for running the business. Moreover, ADEN has generated cash from operations of €892m during the same period of time, leading to an operating cash to total debt ratio of 40%, signalling that ADEN’s current level of operating cash is high enough to cover debt.
At the current liabilities level of €4.5b, the company has maintained a safe level of current assets to meet its obligations, with the current ratio last standing at 1.2x. The current ratio is the number you get when you divide current assets by current liabilities. Usually, for Professional Services companies, this is a suitable ratio as there's enough of a cash buffer without holding too much capital in low return investments.
ADEN is a relatively highly levered company with a debt-to-equity of 48%. This isn’t surprising for large-caps, as equity can often be more expensive to issue than debt, plus interest payments are tax deductible. Accordingly, large companies often have lower cost of capital due to easily obtained financing, providing an advantage over smaller companies. We can assess the sustainability of ADEN’s debt levels to the test by looking at how well interest payments are covered by earnings. Net interest should be covered by earnings before interest and tax (EBIT) by at least three times to be safe. In ADEN's case, the ratio of 32.5x suggests that interest is comfortably covered. Large-cap investments like ADEN are often believed to be a safe investment due to their ability to pump out ample earnings multiple times its interest payments.
Although ADEN’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. Since there is also no concerns around ADEN's liquidity needs, this may be its optimal capital structure for the time being. I admit this is a fairly basic analysis for ADEN's financial health. Other important fundamentals need to be considered alongside. You should continue to research Adecco Group to get a better picture of the large-cap by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for ADEN’s future growth? Take a look at ourfree research report of analyst consensusfor ADEN’s outlook.
2. Valuation: What is ADEN 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 ADEN 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. |
What Type Of Shareholder Owns Thomas Cook Group plc's (LON:TCG)?
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A look at the shareholders of Thomas Cook Group plc (LON:TCG) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that have been privatized tend to have low insider ownership.
Thomas Cook Group is a smaller company with a market capitalization of UK£222m, 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 institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about TCG.
Check out our latest analysis for Thomas Cook 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.
Thomas Cook Group already has institutions on the share registry. Indeed, they own 65% 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Thomas Cook Group's historic earnings and revenue, below, but keep in mind there's always more to the story.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in Thomas Cook 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 Thomas Cook Group plc insiders own under 1% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. It seems the board members have no more than UK£592k worth of shares in the UK£222m company. Many investors in smaller companies prefer to see the board more heavily invested. You canclick here to see if those insiders have been buying or selling.
The general public, with a 17% 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 seems that Private Companies own 18%, of the TCG stock. 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.
It's always worth thinking about the different groups who own shares in a company. But to understand Thomas Cook Group better, we need to consider many other factors.
I always like to check for ahistory of revenue growth. You can too, by accessing this free chart ofhistoric revenue and earnings in thisdetailed graph.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can checkthis free report showing analyst forecasts for its 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. |
Introducing TI Fluid Systems (LON:TIFS), The Stock That Dropped 19% In The Last Year
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TI Fluid Systems plc(LON:TIFS) shareholders should be happy to see the share price up 18% in the last month. But that is minimal compensation for the share price under-performance over the last year. In fact, the price has declined 19% in a year, falling short of the returns you could get by investing in an index fund.
See our latest analysis for TI Fluid Systems
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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).
During the unfortunate twelve months during which the TI Fluid Systems share price fell, it actually saw its earnings per share (EPS) improve by 16%. It's quite possible that growth expectations may have been unreasonable in the past. The divergence between the EPS and the share price is quite notable, during the year. So it's easy to justify a look at some other metrics.
TI Fluid Systems's dividend seems healthy to us, so we doubt that the yield is a concern for the market. From what we can see, revenue is pretty flat, so that doesn't really explain the share price drop. Unless, of course, the market was expecting a revenue uptick.
The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.
We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. So it makes a lot of sense to check out what analysts think TI Fluid Systems willearn in the future (free profit forecasts).
When looking at investment returns, it is important to consider the difference betweentotal shareholder return(TSR) andshare price return. 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. We note that for TI Fluid Systems the TSR over the last year was -16%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
While TI Fluid Systems shareholders are down 16% for the year (even including dividends), the market itself is up 0.6%. 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. It's great to see a nice little 12% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). 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.
TI Fluid Systems is not the only stock insiders are buying. So take a peek at thisfreelist of growing companies with insider 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. |
Is There An Opportunity With 888 Holdings plc's (LON:888) 41% Undervaluation?
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Today we'll do a simple run through of a valuation method used to estimate the attractiveness of 888 Holdings plc (LON:888) as an investment opportunity by estimating the company's 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. Anyone interested in learning a bit more about intrinsic value should have a read of theSimply Wall St analysis model.
See our latest analysis for 888 Holdings
We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. 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 need to discount the sum of these future cash flows to arrive at a present value estimate:
[{"": "Levered FCF ($, Millions)", "2019": "$56.56", "2020": "$65.04", "2021": "$68.54", "2022": "$71.30", "2023": "$73.58", "2024": "$75.49", "2025": "$77.14", "2026": "$78.61", "2027": "$79.94", "2028": "$81.19"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x2", "2020": "Analyst x3", "2021": "Analyst x2", "2022": "Est @ 4.03%", "2023": "Est @ 3.19%", "2024": "Est @ 2.6%", "2025": "Est @ 2.19%", "2026": "Est @ 1.9%", "2027": "Est @ 1.7%", "2028": "Est @ 1.56%"}, {"": "Present Value ($, Millions) Discounted @ 6.89%", "2019": "$52.91", "2020": "$56.93", "2021": "$56.12", "2022": "$54.63", "2023": "$52.74", "2024": "$50.62", "2025": "$48.40", "2026": "$46.14", "2027": "$43.90", "2028": "$41.71"}]
Present Value of 10-year Cash Flow (PVCF)= $504.10m
"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 6.9%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = US$81m × (1 + 1.2%) ÷ (6.9% – 1.2%) = US$1.5b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= $US$1.5b ÷ ( 1 + 6.9%)10= $746.04m
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is $1.25b. In the final step we divide the equity value by the number of shares outstanding. This results in an intrinsic value estimate in the company’s reported currency of $3.4. However, 888’s primary listing is in Gibraltar, and 1 share of 888 in USD represents 0.788 ( USD/ GBP) share of LSE:888,so the intrinsic value per share in GBP is £2.68.Relative to the current share price of £1.58, the company appears quite good value at a 41% 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.
Now 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 888 Holdings 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 6.9%, which is based on a levered beta of 0.950. 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 888 Holdings, I've put together three essential factors you should look at:
1. Financial Health: Does 888 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 888'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 888? 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 GB 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. |
UK government may have to fund cash machines if usage continues to fall
A man uses a Santander cashpoint on October 28, 2018 in Cardiff, United Kingdom. Photo: Matthew Horwood/Getty Images The UK government may have to step in and fund cash machines if rates of cash usage continue to decline, according to a new report. The Future of Finance report warned that people who rely on cash could struggle to access it in future if rates of cash usage continue to decline. “It may be necessary for the state to support the cash economy as a public good, as without this, the incentives for many actors will be to reduce the use cash,” the report said. The report, released last week, points to Sweden as an example of how things can go wrong. Cash usage stood at just 13% in 2018 but even by 2016 it “became increasingly difficult to maintain cash services in sparsely-populated areas,” the report warned. The warning comes on top of the UK Cash Review earlier this year, which concluded that Britain’s cash distribution network is dangerously close to collapse as rates of usage decline. READ MORE: 'Dramatic collapse' of cash in UK could exclude millions of elderly, poor and rural people The number of free cash machines in the UK declined by 1,700 in the first three months of the year . ATMs and the cash distribution network has high fixed costs — it’s not easy to cut the cost of securely transporting cash to and from ATMs. Operators — banks and other private companies — have to either charge more for withdrawals to make it viable or simply shut down the machines. Debit card transactions overtook cash payments for the first time in 2017, the Future of Finance report said, and just 30% of transactions in the UK currently use cash. ATM withdrawals fell by 6% last year and have already fallen by 9% so far this year. READ MORE: 1p and 2ps saved as government vows to protect cash “Authorities will have to find new ways of maintaining access to and the distribution of cash if the rate of decline accelerates,” the Future of Finance report warned. Earlier this year, Chancellor Philip Hammond pledged to maintain access to cash for all UK citizens across Britain. He set up the Joint Authorities Cash Strategy Group to ensure cash survives. The Future of Finance report is the product of a year-long review commissioned by the Bank of England. The report was published last Thursday evening. ———— Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut . Read more: Ex-Barclays CEO acquitted in criminal case over 2008 bailout Huawei fallout spreads: UK chipmaker's stock tanks 35% on profit warning Bank of England's Carney gives Facebook's Libra cautious backing Bank of England cuts growth forecast on no-deal Brexit fears, rates unchanged Why politicians and regulators are already going after Facebook's Libra View comments |
Final Data Analysis of Phase 2 PBC Trial Shows that Genkyotex's Anti-fibrotic Candidate GKT831 Demonstrated Statistically Significant Improvements in GGT and ALP Over Full Treatment Period
• Statistically significant reductions in GGT and ALP in 400mg BID dose over 24-week treatment period (p
• GKT831 400mg BID significantly improved multiple quality of life metrics important to PBC patients, including fatigue (p=0.027)
• Clean safety profile of GKT831 at all doses, with no safety signal identified over 24-week treatment period
• Previously reported data showed a 22% reduction in liver stiffness in PBC patients with liver fibrosis compared to a 4% increase for placebo (p=0.038), supports anti-fibrotic mechanism
ARCHAMPS, France, June 24, 2019 (GLOBE NEWSWIRE) --Genkyotex (Euronext Paris & Brussels: FR0013399474 - GKTX)announced today the final results of its Phase 2 trial of GKT831 in primary biliary cholangitis (PBC). These data include pre-determined secondary efficacy analyses that were not previously available, as well as full safety data.
The efficacy results demonstrate that GKT831 at the 400mg twice a day (BID) dose achieved statistically significant reductions in gamma glutamyl transpeptidase (GGT) (p
p
GKT831 at 400mg BID achieved a 22% reduction in liver stiffness as compared to a 4% increase for placebo (p=0.038) in a pre-defined patient population with an estimated liver fibrosis stage of F3 or higher. This anti-fibrotic effect of GKT831 was previously reported in the top-line results.
The final Quality of Life (QoL) metrics as measured by the PBC-40 questionnaire show improvements in all QoL domain scores at weeks 12 and 24 for the 400mg BID dose. Importantly, improving QoL, in particular fatigue, is a significant unmet need in PBC.
Mean percent changes from Baseline to Week 24 in Quality of Life domains included in the PBC-40 questionnaire. P Values for comparison of changes in the 400mg BID dose against placebo are shown.
GKT831 was well tolerated at all doses, with 119 adverse events (AEs) in the 400mg once a day (OD) and 100 AEs in the 400mg BID compared to 120 AEs in the placebo group. Two serious adverse events (SAEs) were reported, both deemed unrelated to study, one case of urinary tract infection requiring hospitalization in the placebo group, and the other multiple bone fractures related to a traffic accident in the 400mg BID group.
A review of safety laboratory results, vital signs, physical examination, and ECG did not identify any safety signals associated with GKT831 at 400mg OD or 400mg BID.
Incidence of Treatment-Emergent Adverse Events by System Organ Class (top 10 system organ classes ranked according to AE incidence)
Philippe Wiesel, Chief Medical Officer of Genkyotex, said: "The full efficacy and safety data from our Phase 2 PBC trial highlight the potential of GKT831 as a possible treatment for multiple complex and difficult to treat fibrotic disorders, including NASH and PSC. We look forward to complete the evaluation of GKT831 in late-stage clinical trials."
About the PBC phase 2 trial of GKT831 in PBC
The 24-week randomized, double-blind, placebo-controlled study was conducted in 62 centers in the USA, Canada, Belgium, Germany, Greece, Italy, Spain, UK and Israel. The trial enrolled PBC patients with inadequate response to ursodeoxycholic acid (UDCA). This is a difficult to treat patient population likely to progress to cirrhosis, liver transplant or death. To be eligible for the trial, patients were required to have elevated alkaline phosphatase (ALP; >1.5XULN) and elevated gamma glutamyl transpeptidase (GGT; >1.5 XULN). A total of 111 patients were allocated according to a 1:1:1 randomization ratio to three groups: UDCA plus placebo, UDCA plus GKT831 400mg OD and UDCA plus 400mg BID.
The primary efficacy endpoint was percent change in GGT at week 24. Liver fibrosis was assessed non-invasively by measuring liver stiffness and circulating markers of fibrogenesis. Additional key secondary endpoints included additional markers of liver and bile duct injury, markers of inflammation. In addition, indicators of QoL, including pruritus and fatigue, were assessed. Markers of bile acid metabolism and immune activation were also investigated.
Liver stiffness was measured by Fibroscan® transient elastography. Liver stiffness is an indicator of liver inflammation (edema), cholestasis and fibrosis. In multiple liver diseases, including PBC, NASH and PSC, liver stiffness correlates with liver fibrosis stage (F0 to F4). In PSC, increases in liver stiffness are associated with adverse disease outcomes, including liver transplant, hepatic complication and death.
QoL was evaluated with the PBC-40 questionnaire, which assesses several important metrics.
This trial is one of the largest Phase 2 PBC studies conducted to date. Additional information about the trial design and eligibility criteria can be found at ClinicalTrial.gov: NCT03226067.
About Genkyotex
Genkyotex is the leading biopharmaceutical company in NOX therapies, listed on the Euronext Paris and Euronext Brussels markets. Its unique platform enables the identification of orally available small-molecules which selectively inhibit specific NOX enzymes that amplify multiple disease processes such as fibrosis, inflammation, pain processing, cancer development, and neurodegeneration.
Genkyotex is developing a pipeline of first-in-class product candidates targeting one or multiple NOX enzymes. The lead product candidate, GKT831, a NOX1 and NOX4 inhibitor is evaluated in a phase II clinical trial in primary biliary cholangitis (PBC, a fibrotic orphan disease) and in an investigator-initiated Phase II clinical trial in Type 1 Diabetes and Kidney Disease (DKD). A grant from the United States National Institutes of Health (NIH) of $8.9 million was awarded to Professor Victor Thannickal at the University of Alabama at Birmingham (UAB) to fund a multi-year research program evaluating the role of NOX enzymes in idiopathic pulmonary fibrosis (IPF), a chronic lung disease that results in fibrosis of the lungs, the core component of the program will be to conduct a Phase 2 trial with the GKT831 in patients with IPF. This product candidate may also be active in other fibrotic indications.
Genkyotex also has a versatile platform well-suited to the development of various immunotherapies (Vaxiclase). A partnership covering the use of Vaxiclase as an antigen per se (GTL003) has been established with Serum Institute of India Private Ltd (Serum Institute), the world`s largest producer of vaccine doses, for the development by Serum Institute of cellular multivalent combination vaccines against a variety of infectious diseases.
For further information, please go towww.genkyotex.com.
Disclaimer
This press release may contain forward-looking statements by the company with respect to its objectives. Such statements are based upon the current beliefs, estimates and expectations of Genkyotex`s management and are subject to risks and uncertainties such as the company`s ability to implement its chosen strategy, customer market trends, changes in technologies and in the company`s competitive environment, changes in regulations, clinical or industrial risks and all risks linked to the company`s growth. These factors as well as other risks and uncertainties may prevent the company from achieving the objectives outlined in the press release and actual results may differ from those set forth in the forward-looking statements, due to various factors. Without being exhaustive, such factors include uncertainties involved in the development of Genkyotex`s products, which may not succeed, or in the delivery of Genkyotex`s products marketing authorizations by the relevant regulatory authorities and, in general, any factor that could affects Genkyotex`s capacity to commercialize the products it develops. No guarantee is given on forward-looking statements which are subject to a number of risks, notably those described in the registration document (document de reference) registered by the French Markets Authority (the AMF) on 26 April 2019 under number R.19-014, and those linked to changes in economic conditions, the financial markets, or the markets on which Genkyotex is present. Genkyotex products are currently used for clinical trials only and are not otherwise available for distribution or sale.
[{"PBC-40 QoL domains": "General symptoms", "Placebo": "1.1", "GKT831400mg OD": "1.1", "GKT831400mg BID": "-3.7", "pvalue (400mg BID vs placebo at week 24)": "0.156"}, {"PBC-40 QoL domains": "Itch (Pruritus)", "Placebo": "-6.8", "GKT831400mg OD": "-11.4", "GKT831400mg BID": "-9.5", "pvalue (400mg BID vs placebo at week 24)": "0.443"}, {"PBC-40 QoL domains": "Emotional", "Placebo": "8.7", "GKT831400mg OD": "4.9", "GKT831400mg BID": "-16.9", "pvalue (400mg BID vs placebo at week 24)": "0.031"}, {"PBC-40 QoL domains": "Fatigue", "Placebo": "2.4", "GKT831400mg OD": "0.3", "GKT831400mg BID": "-9.9", "pvalue (400mg BID vs placebo at week 24)": "0.027"}, {"PBC-40 QoL domains": "Social", "Placebo": "9.3", "GKT831400mg OD": "8.1", "GKT831400mg BID": "-7.7", "pvalue (400mg BID vs placebo at week 24)": "0.003"}, {"PBC-40 QoL domains": "Cognitive", "Placebo": "5.2", "GKT831400mg OD": "16", "GKT831400mg BID": "-1.9", "pvalue (400mg BID vs placebo at week 24)": "0.332"}]
[{"": "SAEs", "Placebo": "1", "GKT831400mg OD": "0", "GKT831400mg BID": "1"}, {"": "AEs", "Placebo": "121", "GKT831400mg OD": "119", "GKT831400mg BID": "100"}, {"": "AEs leading to patient discontinuation", "Placebo": "0", "GKT831400mg OD": "2", "GKT831400mg BID": "2"}, {"": "AEs leading to drug interruption", "Placebo": "1", "GKT831400mg OD": "1", "GKT831400mg BID": "2"}, {"": "Gastrointestinal", "Placebo": "22", "GKT831400mg OD": "25", "GKT831400mg BID": "25"}, {"": "Infections", "Placebo": "24", "GKT831400mg OD": "12", "GKT831400mg BID": "11"}, {"": "Skin and subcutaneous tissue", "Placebo": "12", "GKT831400mg OD": "15", "GKT831400mg BID": "14"}, {"": "Nervous system", "Placebo": "12", "GKT831400mg OD": "17", "GKT831400mg BID": "9"}, {"": "General disorders", "Placebo": "14", "GKT831400mg OD": "6", "GKT831400mg BID": "12"}, {"": "Musculoskeletal and connective tissue", "Placebo": "10", "GKT831400mg OD": "12", "GKT831400mg BID": "6"}, {"": "Investigations", "Placebo": "3", "GKT831400mg OD": "7", "GKT831400mg BID": "7"}, {"": "Injury, poisoning, procedural complications", "Placebo": "4", "GKT831400mg OD": "4", "GKT831400mg BID": "5"}, {"": "Respiratory, thoracic, and mediastinal", "Placebo": "4", "GKT831400mg OD": "5", "GKT831400mg BID": "4"}, {"": "Psychiatric disorders", "Placebo": "7", "GKT831400mg OD": "1", "GKT831400mg BID": "0"}]
[] |
Should We Be Delighted With 888 Holdings plc's (LON:888) ROE Of 59%?
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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). To keep the lesson grounded in practicality, we'll use ROE to better understand 888 Holdings plc (LON:888).
Over the last twelve months888 Holdings has recorded a ROE of 59%. Another way to think of that is that for every £1 worth of equity in the company, it was able to earn £0.59.
Check out our latest analysis for 888 Holdings
Theformula for return on equityis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for 888 Holdings:
59% = US$95m ÷ US$160m (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. The easiest way to calculate shareholders' equity is to subtract the company's total liabilities from the total assets.
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. A higher profit will lead to a higher ROE. So, all else equal,investors should like a high ROE. 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. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. Pleasingly, 888 Holdings has a superior ROE than the average (9.8%) company in the Hospitality industry.
That is a good sign. We think a high ROE, alone, is usually enough to justify further research into a company. One data point to check is ifinsiders have bought shares recently.
Most companies need money -- from somewhere -- to grow their profits. That cash can come from retained earnings, issuing new shares (equity), 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. That will make the ROE look better than if no debt was used.
888 Holdings is free of net debt, which is a positive for shareholders. Its high ROE already points to a high quality business, but the lack of debt is a cherry on top. After all, with cash on the balance sheet, a company has a lot more optionality in good times and bad.
Return on equity is one way we can compare the business quality of different companies. In my book the highest quality companies have high return on equity, despite low debt. 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 you might want to take a peek at thisdata-rich interactive graph of forecasts for the company.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss thisfreelist of interesting companies, that have HIGH return on equity 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. |
How Much Of Spectra Systems Corporation (LON:SPSC) Do Insiders Own?
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If you want to know who really controls Spectra Systems Corporation (LON:SPSC), then you'll have to look at the makeup of its share registry. 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.'
Spectra Systems is a smaller company with a market capitalization of UK£60m, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutions own shares in the company. Let's take a closer look to see what the different types of shareholder can tell us about SPSC.
Check out our latest analysis for Spectra Systems
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.
As you can see, institutional investors own 21% of Spectra Systems. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Spectra Systems, (below). Of course, keep in mind that there are other factors to consider, too.
Spectra Systems is not owned by hedge funds. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
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. 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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
It seems insiders own a significant proportion of Spectra Systems Corporation. It has a market capitalization of just UK£60m, and insiders have UK£15m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You canclick here to see if they have been buying or selling.
The general public, who are mostly retail investors, collectively hold 53% of Spectra Systems shares. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
It's always worth thinking about the different groups who own shares in a company. But to understand Spectra Systems 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 are like me, you may want to think about whether this company will grow or shrink. Luckily, you can checkthis free report showing analyst forecasts for its 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. |
Spectra Systems Corporation (LON:SPSC) Delivered A Better ROE Than Its Industry
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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 Spectra Systems Corporation (LON:SPSC), by way of a worked example.
Our data showsSpectra Systems has a return on equity of 16%for the last year. One way to conceptualize this, is that for each £1 of shareholders' equity it has, the company made £0.16 in profit.
Check out our latest analysis for Spectra Systems
Theformula for return on equityis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Spectra Systems:
16% = US$4.1m ÷ US$26m (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.
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, all else being equal,a high ROE is better than a low one. That means ROE can be used to compare two businesses.
Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. Pleasingly, Spectra Systems has a superior ROE than the average (12%) company in the Electronic industry.
That is a good sign. 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.
Companies usually need to invest money to grow their profits. That cash can come from retained earnings, issuing new shares (equity), 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.
Shareholders will be pleased to learn that Spectra Systems has not one iota of net debt! Its respectable ROE suggests it is a business worth watching, but it's even better the company achieved this without leverage. After all, when a company has a strong balance sheet, it can often find ways to invest in growth, even if it takes some time.
Return on equity is useful for comparing the quality of different businesses. In my book the highest quality companies have high return on equity, despite low debt. 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. Profit growth rates, versus the expectations reflected in the price of the stock, are a particularly important to consider. So you might want to take a peek at thisdata-rich interactive graph of forecasts for the company.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss thisfreelist of interesting companies, that have HIGH return on equity 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. |
How the Kardashians reacted to the Tristan & Jordyn scandal
It was the moment we've been waiting for all season on Keeping Up With the Kardashians Sunday night, when we finally got to watch how the Tristan Thompson and Jordyn Woods cheating scandal went down from the Kardashian-Jenner family's point of view — and it was as dramatic as you would expect. "Tristan has a couple of his guy friends in town for [NBA] All-Star weekend, so he rented an Airbnb for the boys to stay at. Tristan went to an after-party. Jordyn was there. Tristan never came home," Khloé Kardashian explained. As with the first public Tristan cheating scandal that went down, Kim Kardashian was in the middle of her interviews when she received a phone call from a friend, saying, "I don't even know if I should tell you this. Tristan and Jordyn were all over each other last night." After hearing the news, Kim initially didn't believe what she had heard. However, once she got on a group call with Khloé and Kourtney Kardashian , everything began to unfold. "I talked to Jordyn," said Khloé. "It's really weird. She's not giving me all the information. She was like, 'He was trying to kiss me,' and was like, 'I can't remember if we did or didn't.'" Kylie Jenner then joined the call expressing that she also found the situation very "weird." "This is the first time I'm hearing she was sitting on his lap," said Kylie. Khloé then told her sisters that Jordyn confirmed she made out with Tristan, which had Kourtney "furious." Kim pointed out how Kylie provided for Jordyn's whole family off of what Kylie has given to Jordyn. "The disrespect of just, like, she has to know that there's a problem," said Kim. As for Tristan, Khloé revealed to Scott Disick that Tristan was feeling suicidal after the news broke. "He's doing this to get a reaction out of me, and that's, like, oh, so I'm just allowed to say I'm gonna kill myself at any time? That's crazy," Khloé told Scott. Nevertheless, Khloé called one of Tristan's friends and asked him to go check on Tristan. Story continues "The fact that Khloé is sitting here heartbroken, but still worrying about Tristan's feelings, and the possibility of him being upset, or possibly hurting himself, I mean, it just goes to show that Khloé is an unbelievable person that loves so hard, and so much, and only wants good, and somehow she just keeps getting the short end of the stick. And it's unfair and it's hurtful and it's really hard for me to sit and watch," said Disick. Khloé, who normally live-tweets every Sunday during the show, told her followers last week that she wouldn't be during this episode, for obvious reasons. Well needless to say I won’t be live chatting next week. Sorry guys. https://t.co/OeYV4tcmyU — Khloé (@khloekardashian) June 17, 2019 However, Khloé did post some cryptic messages on her IG story Sunday morning. One quote read: "The more you bring to the table, the harder it is to find people to eat with. Just remember, quality over quantity, babe." Kim, on the other hand, did live-tweet during the dramatic episode, writing: As uncomfortable as reliving this all over again is, we have been so open with everything in our lives from giving birth, marriages, divorces, the good times and the bad and unfortunately this is the truth of what we went through and I wish it could have aired sooner. — Kim Kardashian West (@KimKardashian) June 24, 2019 By the end of the episode, Khloé told Kim and Kylie that "they're both at fault." "Jordyn didn't think about me, she didn't think about Kylie, 'cause now that puts a divide between her and Kylie, she didn't think about my daughter, she didn't think about Tristan. Tristan doesn't think, whatever. And she didn't think about herself," said Khloé. "I'm not blaming just Jordyn. Tristan, we've all known what he's capable of. Look what he did when I was 9 months pregnant. But I knew who he was. I never in a million years thought that's who she was." Meanwhile, Kylie, who has been best friends with Jordyn for a very long time, expressed, "I called her and she didn't really say anything. She was just, like, you know, crying the whole time, and I was just telling her, 'I'm, like, scared of you now, like, that you're capable of waking up the next morning with a smile on your face.'" Khloé also revealed that Jordyn never once said "I'm sorry" to her, but she did have a message for both of them. "Jordyn and Tristan, you didn't just ruin my relationship. You both collectively ruined the relationship with me, with your daughter, with Kylie, with everyone. Yes, people make mistakes, people f*** up. But why would you want to do this to yourself? I'll never understand that." Part 2 of the finale airs next week, and it looks even more dramatic. Keeping Up With the Kardashians airs Sundays at 9 p.m. on E! Check out Kourtney Kardashian saying Kylie Jenner acts entitled since becoming a billionaire: Read more from Yahoo! Entertainment: Khloé Kardashian takes to Twitter to explain Tristan Thompson’s blurred face Kim Kardashian says that in 10 years, she wants to ‘give up being Kim K’ Rihanna and Seth Meyers get into hilarious day drinking shenanigans Tell us what you think! Hit us up on Twitter , Facebook or Instagram , or leave your comments below. And check out our host, Kylie Mar, on Twitter , Facebook or Instagram . Want daily pop culture news delivered to your inbox? Sign up here for Yahoo Entertainment & Lifestyle's newsletter. |
What Are Analysts Saying About The Future Of Halma plc's (LON:HLMA)?
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After Halma plc's (LON:HLMA) earnings announcement on 31 March 2019, it seems that analyst expectations are fairly bearish, with profits predicted to rise by 7.3% next year relative to the higher past 5-year average growth rate of 11%. Presently, with latest-twelve-month earnings at UK£170m, we should see this growing to UK£182m 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.
Check out our latest analysis for Halma
The view from 13 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.
By 2022, HLMA's earnings should reach UK£214m, from current levels of UK£170m, resulting in an annual growth rate of 7.8%. EPS reaches £0.58 in the final year of forecast compared to the current £0.45 EPS today. Margins are currently sitting at 14%, which is expected to expand to 14% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Halma, I've put together three key 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 Halma 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 Halma is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of Halma? 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. |
50 years later, the moon is still great for business
NEW YORK (AP) Fifty years after humans first visited, businesses are still trying to make a buck off the moon. Hundreds of millions of people were riveted when Apollo 11 landed on the moon on July 20, 1969. Naturally, marketers jumped at the chance to sell products from cars and televisions, to cereal and a once-obscure powdered drink called Tang. They are at it again in 2019, as the 50th anniversary of the giant leap for mankind approaches. There's the cosmically priced $34,600 limited edition Omega Speedmaster, a tribute to the watch that Buzz Aldrin wore on the moon. And the more down-to-Earth Budweiser Discovery Reserve, which revives a recipe from the 1960s and features 11 symbolic stars in the packaging. There's the playful NASA Apollo 11 lunar lander set from Lego. And Nabisco's indulgent purple Marshmallow Moon Oreo cookies. And who doesn't need "one small step" t-shirts, Saturn V crew socks or an Apollo 11 travel tumbler? But seriously, some brands take genuine pride at having been part of the first moon landing. Omega Speedmaster watches have been an icon of space travel since NASA chose them for its manned missions in 1965 after other watches failed tests. In 1970, the crew of the ill-fated Apollo 13 mission used a Speedmaster to time a 14-second engine burn to align themselves for re-entry to Earth. "It continues to be an important tool to have. You have to look only to the Apollo 13 mission," said James Ragan, a retired NASA aerospace engineer who tested the watches in the 1960s. Omega's gold Speedmaster is a version of the watches the company presented to astronauts at a gala dinner in 1969. A relatively more modest $9,650 stainless steel timepiece features a laser-engraved image of Aldrin descending from the lunar lander. Then, there are the anti-gravity Fisher Space Pens, developed specially for the Apollo missions. For luxury space enthusiasts, Fisher Space Pen Co. has a $700 limited edition pen with authenticated materials from the Apollo 11 space craft. Back in 1969, both Omega and Fisher Space Pen Co. were quick to promote their Apollo 11 connections with media and advertising campaigns, as were NASA contractors like Boeing and General Electric. Stouffer's made sure consumers knew it provided food for Apollo 11 astronauts once they were back on Earth, launching the ad campaign "Everybody who's been to the moon is eating Stouffer's." Fifty years later, the Nestle-owned brand is celebrating with a media campaign to share some of the recipes from 1969. Story continues But brands with no direct Apollo connections were not about to sit out an event that nearly every U.S. household with a television watched. In 1969, Zippo released a lighter saluting the Apollo 11 mission and its astronauts. A half-century later, Zippo has sold out of the 14,000 limited edition lighters released in tribute to the anniversary, priced at $100 each. Krispy Kreme, which says it served doughnuts to witnesses at the Apollo 11 launch, conjured up a new treat filling its classic glazed doughnuts with cream in honor of the anniversary. If many of the tributes have a vintage feel, it might be because public interest in space exploration has ebbed and flowed over the years, with no single event capturing the global euphoria of the first moon landing, and the Apollo program ending in 1972. "Since 1972, human space travel has been dead boring. We've gone around and around and around the Earth a whole bunch of times, and that is not interesting to people," said David Meerman Scott, a marketing strategist and co-author of the book "Marketing the Moon," which chronicles the public relations efforts that went into the Apollo 11 mission. Still, Scott said the 50th anniversary comes amid renewed interest, with NASA's plans to send astronauts back to the moon by 2024 and to Mars in the 2030s. Indeed, Lego conceived its lunar lander as a grown-up display set, part of its Creator Expert series aimed at adults. For kids, born to parents who themselves who have never known a world without space travel, the Danish toy company is releasing six new Lego City Mars exploration sets, designed in collaboration with NASA with futuristic rockets that would take humans to the red planet. "It's about giving kids something aspirational, where they can see themselves, versus trying to project them into a historical moment," said Michael McNally, senior director of brand relations at Lego. Budweiser, similarly, has declared its ambition to be the first beer on Mars, participating in barley-growing experiments on the International Space Station. Still, the Anheuser-Busch brand saw marketing potential in evoking the patriotism that the Apollo 11 mission stirred in Americans during politically polarized times. "Beer at its core is a very democratic drink. It brings people together," said Ricardo Marques, vice president of marketing at Anheuser-Busch. "We like in particular to remind people of everything that is good and everything we shouldn't forget." After all, watching the first moon landing was a personal experience for hundreds of millions of people around the world. That was thanks to TV a connection Samsung has seized for its media campaign promoting its QLED 8K TV, tied to CNN's Apollo 11 documentary. View comments |
All You Need To Know About Halma plc's (LON:HLMA) Financial Health
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With a market capitalization of UK£7.6b, Halma plc (LON:HLMA) is a large-cap stock, which is considered by most investors as a safe bet. Common characteristics for these big stocks are their strong balance sheet and high liquidity, which means there's plenty of stocks available to the public for trading. These firms won’t be left high and dry if liquidity dries up, and they will be relatively unaffected by rises in interest rates. Assessing the most recent data for HLMA, I will take you through the key ratios to measure financial health, in particular, its solvency and liquidity.
View our latest analysis for Halma
HLMA's debt levels have fallen from UK£291m to UK£263m over the last 12 months , which includes long-term debt. With this reduction in debt, HLMA currently has UK£81m remaining in cash and short-term investments to keep the business going. Moreover, HLMA has generated UK£219m in operating cash flow during the same period of time, resulting in an operating cash to total debt ratio of 83%, meaning that HLMA’s operating cash is sufficient to cover its debt.
With current liabilities at UK£213m, it appears that the company has been able to meet these commitments with a current assets level of UK£486m, leading to a 2.28x current account ratio. The current ratio is the number you get when you divide current assets by current liabilities. Usually, for Electronic companies, this is a suitable ratio since there is a bit of a cash buffer without leaving too much capital in a low-return environment.
HLMA’s level of debt is appropriate relative to its total equity, at 27%. This range is considered safe as HLMA is not taking on too much debt obligation, which can be restrictive and risky for equity-holders. We can check to see whether HLMA 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. For HLMA, the ratio of 25.48x suggests that interest is amply covered. Large-cap investments like HLMA are often believed to be a safe investment due to their ability to pump out ample earnings multiple times its interest payments.
HLMA’s debt level is appropriate for a company its size, and it is also able to generate sufficient cash flow coverage, meaning it has been able to put its debt in good use. In addition to this, the company exhibits proper management of current assets and upcoming liabilities. Keep in mind I haven't considered other factors such as how HLMA has been performing in the past. I suggest you continue to research Halma to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for HLMA’s future growth? Take a look at ourfree research report of analyst consensusfor HLMA’s outlook.
2. Valuation: What is HLMA 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 HLMA 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. |
A Look At The Fair Value Of Spirent Communications plc (LON:SPT)
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Today we will run through one way of estimating the intrinsic value of Spirent Communications plc (LON:SPT) by projecting its future cash flows and then discounting them to today's value. I will be 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. 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 Spirent Communications
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. 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 need to discount the sum of these future cash flows to arrive at a present value estimate:
[{"": "Levered FCF ($, Millions)", "2019": "$65.89", "2020": "$72.19", "2021": "$76.19", "2022": "$79.34", "2023": "$81.93", "2024": "$84.11", "2025": "$85.98", "2026": "$87.63", "2027": "$89.14", "2028": "$90.54"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x3", "2020": "Analyst x2", "2021": "Analyst x2", "2022": "Est @ 4.14%", "2023": "Est @ 3.27%", "2024": "Est @ 2.65%", "2025": "Est @ 2.23%", "2026": "Est @ 1.93%", "2027": "Est @ 1.72%", "2028": "Est @ 1.57%"}, {"": "Present Value ($, Millions) Discounted @ 8.32%", "2019": "$60.83", "2020": "$61.53", "2021": "$59.94", "2022": "$57.63", "2023": "$54.94", "2024": "$52.06", "2025": "$49.14", "2026": "$46.23", "2027": "$43.42", "2028": "$40.71"}]
Present Value of 10-year Cash Flow (PVCF)= $526.42m
"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 8.3%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = US$91m × (1 + 1.2%) ÷ (8.3% – 1.2%) = US$1.3b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= $US$1.3b ÷ ( 1 + 8.3%)10= $580.89m
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is $1.11b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. This results in an intrinsic value estimate in the company’s reported currency of $1.81. However, SPT’s primary listing is in United Kingdom, and 1 share of SPT in USD represents 0.788 ( USD/ GBP) share of OTCPK:SPMY.Y,so the intrinsic value per share in GBP is £1.43.Relative to the current share price of £1.51, the company appears around fair value at the time of writing. 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. 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 Spirent Communications 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 8.3%, which is based on a levered beta of 1.067. 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 Spirent Communications, I've put together three important factors you should look at:
1. Financial Health: Does SPT 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 SPT'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 SPT? 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. |
Calculating The Fair Value Of Spirent Communications plc (LON:SPT)
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Today we will run through one way of estimating the intrinsic value of Spirent Communications plc (LON:SPT) 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. 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.
View our latest analysis for Spirent Communications
We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. 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 ($, Millions)", "2019": "$65.89", "2020": "$72.19", "2021": "$76.19", "2022": "$79.34", "2023": "$81.93", "2024": "$84.11", "2025": "$85.98", "2026": "$87.63", "2027": "$89.14", "2028": "$90.54"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x3", "2020": "Analyst x2", "2021": "Analyst x2", "2022": "Est @ 4.14%", "2023": "Est @ 3.27%", "2024": "Est @ 2.65%", "2025": "Est @ 2.23%", "2026": "Est @ 1.93%", "2027": "Est @ 1.72%", "2028": "Est @ 1.57%"}, {"": "Present Value ($, Millions) Discounted @ 8.32%", "2019": "$60.83", "2020": "$61.53", "2021": "$59.94", "2022": "$57.63", "2023": "$54.94", "2024": "$52.06", "2025": "$49.14", "2026": "$46.23", "2027": "$43.42", "2028": "$40.71"}]
Present Value of 10-year Cash Flow (PVCF)= $526.42m
"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 1.2%. We discount the terminal cash flows to today's value at a cost of equity of 8.3%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = US$91m × (1 + 1.2%) ÷ (8.3% – 1.2%) = US$1.3b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= $US$1.3b ÷ ( 1 + 8.3%)10= $580.89m
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is $1.11b. 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 $1.81. However, SPT’s primary listing is in United Kingdom, and 1 share of SPT in USD represents 0.788 ( USD/ GBP) share of OTCPK:SPMY.Y,so the intrinsic value per share in GBP is £1.43.Compared to the current share price of £1.51, 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.
The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the 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 Spirent Communications 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 8.3%, which is based on a levered beta of 1.067. 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 Spirent Communications, I've compiled three important aspects you should further examine:
1. Financial Health: Does SPT 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 SPT'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 SPT? 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 It Worth Buying Stern Immobilien AG (MUN:SY5N) For Its 5.4% Dividend Yield?
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Could Stern Immobilien AG (MUN:SY5N) be an attractive dividend share to own for the long haul? Investors are often drawn to strong companies with the idea of reinvesting the dividends. On the other hand, investors have been known to buy a stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations.
In this case, Stern Immobilien pays a decent-sized 5.4% dividend yield, and has been distributing cash to shareholders for the past two years. A high yield probably looks enticing, but investors are likely wondering about the short payment history. When buying stocks for their dividends, you should always run through the checks below, to see if the dividend looks sustainable.
Click the interactive chart for our full dividend analysis
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. 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.
Consider gettingour latest analysis on Stern Immobilien's financial position 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. The company has been paying a stable dividend for a few years now, but we'd like to see more evidence of consistency over a longer period. Its most recent annual dividend was €1.10 per share, effectively flat on its first payment two years ago.
We like that the dividend hasn't been shrinking. However we're conscious that the company hasn't got an overly long track record of dividend payments yet, which makes us wary of relying on its dividend income.
The other half of the dividend investing equation is evaluating whether earnings per share (EPS) are growing. Growing EPS can help maintain or increase the purchasing power of the dividend over the long run.
Dividend investors should always want to know if a) a company's dividends are affordable, b) if there is a track record of consistent payments, and c) if the dividend is capable of growing. Firstly, we like that Stern Immobilien has a low and conservative payout ratio. We were also glad to see it growing earnings, although its dividend history is not as long as we'd like. Stern Immobilien has a credible record on several fronts, but falls slightly short of our standards for a dividend stock.
You can also discover whether shareholders are aligned with insider interests bychecking our visualisation of insider shareholdings and trades in Stern Immobilien stock.
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. |
Is Stern Immobilien AG (MUN:SY5N) A Smart Choice For Dividend Investors?
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! Dividend paying stocks like Stern Immobilien AG ( MUN:SY5N ) 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. If you are hoping to live on the income from dividends, it's important to be a lot more stringent with your investments than the average punter. In this case, Stern Immobilien pays a decent-sized 5.4% dividend yield, and has been distributing cash to shareholders for the past two years. It's certainly an attractive yield, but readers are likely curious about its staying power. There are a few simple ways to reduce the risks of buying Stern Immobilien for its dividend, and we'll go through these below. Click the interactive chart for our full dividend analysis MUN:SY5N Historical Dividend Yield, June 24th 2019 Payout ratios Companies (usually) pay dividends out of their earnings. If a company is paying more than it earns, the dividend might have to be cut. As a result, we should always investigate whether a company can afford its dividend, measured as a percentage of a company's net income after tax. This is a middling range that strikes a nice balance between paying dividends to shareholders, and retaining enough earnings to invest in future growth. Plus, there is room to increase the payout ratio over time. Remember, you can always get a snapshot of Stern Immobilien's latest financial position, by checking our visualisation of its financial health . Dividend Volatility From the perspective of an income investor who wants to earn dividends for many years, there is not much point buying a stock if its dividend is regularly cut or is not reliable. The dividend has not fluctuated much, but with a relatively short payment history, we can't be sure this is sustainable across a full market cycle. Its most recent annual dividend was €1.10 per share, effectively flat on its first payment two years ago. Story continues We like that the dividend hasn't been shrinking. However we're conscious that the company hasn't got an overly long track record of dividend payments yet, which makes us wary of relying on its dividend income. Dividend Growth Potential 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. Conclusion To summarise, shareholders should always check that Stern Immobilien'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 Stern Immobilien has a low and conservative payout ratio. Next, earnings growth has been good, but unfortunately the company has not been paying dividends as long as we'd like. Stern Immobilien has a number of positive attributes, but falls short of our ideal dividend company. It may be worth a look at the right price, though. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Stern Immobilien stock. We have also put together a list 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 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. |
Asian Markets Mixed on Concerns Over U.S.-China Relations
The major Asia-Pacific markets are trading mixed on Monday with investors still digesting the events from last week, while assessing the potential impact of new developments this week. Last week, the primary driver of the price action was the dovish tone set by the U.S. Federal Reserve.
Although Fed policymakers voted 9 to 1 to keep rates on hold at this meeting, and didn’t actually say interest rates would be cut, they left enough hints to indicate that investors should prepare for one. And as we all know by now, cheap money drives the stock market higher despite all the warnings out there about lower profits due to tariffs, sanctions and boycotts.
The first clue that a rate cut could take place before the end of the year was the Fed dropping the word “patient” in its monetary policy statement. The second clue was the projection of at least one rate cut in the FOMC members’ “dot-plot” forecasts. The third clue came from Fed Chair Jerome Powell, who said policymakers are prepared to become “accommodative.”
U.S. Treasury investors priced in a 100% rate cut for the end of July as they drove the benchmark 10-year Treasury yield below 2% for the first time since late 2016. This drove the U.S. Dollar sharply lower against the major currencies as well as Asian currencies and emerging market currencies.
The weaker dollar could help the emerging market countries recover from economic weakness, which could help revive the overall Asian economy.
Soaring crude oil prices could help derail the rally in Asia if they become too volatile due to an escalation of tensions between the U.S. and Iran. Prices remain firm early Monday, but they could ease as the week goes on if the two countries agree to negotiate among other things, Iran’s nuclear program.
President Trump said the U.S. would go into any negotiations with “no preconditions”. Secretary of State Mike Pompeo reiterated the President by saying, “We’re prepared to negotiate with no preconditions.”
Although both the United States and China agreed to a meeting between U.S. President Trump and China President Xi Jinping, there doesn’t seem to be any excitement in the markets over the upcoming event scheduled for this weekend.
This suggests there may be doubts that the meeting will lead to anything major regarding renewed trade negotiations. Furthermore, the U.S. hasn’t made life any easier for the Chinese since the meeting was announced early last week.
For example, the U.S. Commerce Department on Friday added five Chinese technology companies to the so-called entity list that effectively prohibits them from buying parts from U.S. companies.
Furthermore, China fired back that it would like the U.S. to cancel “inappropriate” actions against Chinese companies, according to Wang Shouwen, vice minister of commerce, said Monday.
I place the odds of a meeting between Trump and Xi taking place at 50/50, and if it does take place, it’s another 50/50 that they’ll reach any substantive agreement.
Look for stocks to give back some of last week’s gains if the meeting is cancelled and to rally if they agree to renewed trade talks.
Thisarticlewas originally posted on FX Empire
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Do Investors Have Good Reason To Be Wary Of Talanx AG's (ETR:TLX) 3.9% Dividend Yield?
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Could Talanx AG (ETR:TLX) be an attractive dividend share to own for the long haul? Investors are often drawn to strong companies with the idea of reinvesting the dividends. If you are hoping to live on the income from dividends, it's important to be a lot more stringent with your investments than the average punter.
With a six-year payment history and a 3.9% yield, many investors probably find Talanx intriguing. We'd agree the yield does look enticing. Some simple research can reduce the risk of buying Talanx for its dividend - read on to learn more.
Explore this interactive chart for our latest analysis on Talanx!
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. As a result, we should always investigate whether a company can afford its dividend, measured as a percentage of a company's net income after tax. In the last year, Talanx paid out 51% of its profit as dividends. This is a fairly normal payout ratio among most businesses. It allows a higher dividend to be paid to shareholders, but does limit the capital retained in the business - which could be good or bad.
Consider gettingour latest analysis on Talanx's financial position here.
From the perspective of an income investor who wants to earn dividends for many years, there is not much point buying a stock if its dividend is regularly cut or is not reliable. Looking at the data, we can see that Talanx has been paying a dividend for the past six years. Its dividend has not fluctuated much that time, which we like, but we're conscious that the company might not yet have a track record of maintaining dividends in all economic conditions. During the past six-year period, the first annual payment was €1.05 in 2013, compared to €1.45 last year. Dividends per share have grown at approximately 5.5% per year over this time.
Talanx has been growing its dividend at a decent rate, and the payments have been stable despite the short payment history. This is a positive start.
The other half of the dividend investing equation is evaluating whether earnings per share (EPS) are growing. Growing EPS can help maintain or increase the purchasing power of the dividend over the long run. Talanx's EPS are effectively flat over the past five years. Flat earnings per share are acceptable for a time, but over the long term, the purchasing power of the company's dividends could be eroded by inflation.
To summarise, shareholders should always check that Talanx's dividends are affordable, that its dividend payments are relatively stable, and that it has decent prospects for growing its earnings and dividend. First, we think Talanx has an acceptable payout ratio. Second, earnings per share have been in decline, and the dividend history is shorter than we'd like. With this information in mind, we think Talanx may not be an ideal dividend stock.
Given that earnings are not growing, the dividend does not look nearly so attractive. Businesses can change though, and we think it would make sense to see whatanalysts are forecasting for the company.
If you are a dividend investor, you might also want to look at ourcurated list of dividend stocks yielding 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. |
Is Talanx AG (ETR:TLX) A Strong Dividend Stock?
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Is Talanx AG (ETR:TLX) a good dividend stock? How would you know? Dividend paying companies with growing earnings can be highly rewarding in the long term. 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.
With a goodly-sized dividend yield despite a relatively short payment history, investors might be wondering if Talanx is a new dividend aristocrat in the making. We'd agree the yield does look enticing. When buying stocks for their dividends, you should always run through the checks below, to see if the dividend looks sustainable.
Explore this interactive chart for our latest analysis on Talanx!
Companies (usually) pay dividends out of their earnings. If a company is paying more than it earns, the dividend might have to be cut. As a result, we should always investigate whether a company can afford its dividend, measured as a percentage of a company's net income after tax. Looking at the data, we can see that 51% of Talanx's profits were paid out as dividends in the last 12 months. This is a healthy payout ratio, and while it does limit the amount of earnings that can be reinvested in the business, there is also some room to lift the payout ratio over time.
We update our data on Talanx every 24 hours, so you can always getour latest analysis of its financial health, here.
One of the major risks of relying on dividend income, is the potential for a company to struggle financially and cut its dividend. Not only is your income cut, but the value of your investment declines as well - nasty. Talanx has been paying a dividend for the past six years. Its dividend has not fluctuated much that time, which we like, but we're conscious that the company might not yet have a track record of maintaining dividends in all economic conditions. During the past six-year period, the first annual payment was €1.05 in 2013, compared to €1.45 last year. Dividends per share have grown at approximately 5.5% per year over this time.
Talanx has been growing its dividend at a decent rate, and the payments have been stable despite the short payment history. This is a positive start.
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. While there may be fluctuations in the past , Talanx's earnings per share have basically not grown from where they were five years ago. Over the long term, steady earnings per share is a risk as the value of the dividends can be reduced by inflation.
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. Talanx's payout ratio is within an average range for most market participants. Second, earnings per share have been in decline, and the dividend history is shorter than we'd like. To conclude, we've spotted a couple of potential concerns with Talanx that may make it less than ideal candidate for dividend investors.
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 11analysts 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. |
Is NCC Group plc's (LON:NCC) ROE Of 7.8% Concerning?
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). We'll use ROE to examine NCC Group plc ( LON:NCC ), by way of a worked example. NCC Group has a ROE of 7.8% , 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 £0.078. Check out our latest analysis for NCC Group How Do You Calculate ROE? The formula for ROE is: Return on Equity = Net Profit ÷ Shareholders' Equity Or for NCC Group: 7.8% = UK£16m ÷ UK£209m (Based on the trailing twelve months to November 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 the capital paid in by shareholders, plus any retained earnings. The easiest way to calculate shareholders' equity is to subtract the company's total liabilities from the total assets. What Does ROE Mean? ROE measures a company's profitability against the profit it retains, and any outside investments. The 'return' is the amount earned after tax over the last twelve months. That means that the higher the ROE, the more profitable the company is. So, all else being equal, a high ROE is better than a low one . Clearly, then, one can use ROE to compare different companies. Does NCC Group Have A Good ROE? Arguably the easiest way to assess company's ROE is to compare it with the average in 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, NCC Group has a lower ROE than the average (15%) in the IT industry. LSE:NCC Past Revenue and Net Income, June 24th 2019 That certainly isn't ideal. It is better when the ROE is above industry average, but a low one doesn't necessarily mean the business is overpriced. Nonetheless, it could be useful to double-check if insiders have sold shares recently . Story continues How Does Debt Impact ROE? Virtually all companies need money to invest in the business, to grow profits. That cash can come from issuing shares, retained earnings, or debt. In the first two cases, the ROE will capture this use of capital to grow. 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. Combining NCC Group's Debt And Its 7.8% Return On Equity NCC Group has a debt to equity ratio of 0.29, which is far from excessive. Its ROE isn't particularly impressive, but the debt levels are quite modest, so the business probably has some real potential. 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. The Bottom Line On ROE Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. In my book the highest quality companies have high return on equity, despite low debt. If two companies have the same ROE, then I would generally prefer the one with less debt. 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 this data-rich interactive graph of forecasts for the company . Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list 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 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. |
Can NCC Group plc (LON:NCC) Improve Its Returns?
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One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. We'll use ROE to examine NCC Group plc (LON:NCC), by way of a worked example.
Our data showsNCC Group has a return on equity of 7.8%for the last year. That means that for every £1 worth of shareholders' equity, it generated £0.078 in profit.
Check out our latest analysis for NCC Group
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for NCC Group:
7.8% = UK£16m ÷ UK£209m (Based on the trailing twelve months to November 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. The easiest way to calculate shareholders' equity is to subtract the company's total liabilities from the total assets.
ROE measures a company's profitability against the profit it retains, and any outside investments. 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 NCC Group has a lower ROE than the average (15%) in the IT industry classification.
That certainly isn't ideal. It is better when the ROE is above industry average, but a low one doesn't necessarily mean the business is overpriced. Still,shareholders might want to check if insiders have been selling.
Companies usually need to invest money to grow their profits. That cash can come from issuing shares, retained earnings, or debt. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same.
Although NCC Group does use debt, its debt to equity ratio of 0.29 is still low. I'm not impressed with its ROE, but the debt levels are not too high, indicating the business has decent prospects. Judicious use of debt to improve returns can certainly be a good thing, although it does elevate risk slightly and reduce future optionality.
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.
Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. 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 you might want to check this FREEvisualization of 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. |
Sensex, Nifty end lower for second straight session; auto, metals drag
BENGALURU (Reuters) - Indian shares ended lower for the second consecutive session on Monday, with metal and auto stocks among the biggest drags, as caution ahead of the federal budget and a delay in monsoon rains dampened investor sentiment.
The broader NSE Nifty closed 0.21% lower at 11,699.65, while the benchmark BSE Sensex was down 0.18 at 39,122.96. Both the indexes posted their second consecutive session of falls.
JSW Steel, top loser by percentage on the NSE index, ended 3.5% lower, while Eicher Motors Ltd, the maker of Royal Enfield motorcycles, closed down 3.2%.
(Reporting by Krishna V Kurup in Bengaluru; Editing by Rashmi Aich) |
Do You Like Hiolle Industries S.A. (EPA:ALHIO) At This P/E Ratio?
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This article is written for those who want to get better at using price to earnings ratios (P/E ratios). We'll apply a basic P/E ratio analysis to Hiolle Industries S.A.'s (EPA:ALHIO), to help you decide if the stock is worth further research. Looking at earnings over the last twelve months,Hiolle Industries has a P/E ratio of 11.54. That corresponds to an earnings yield of approximately 8.7%.
Check out our latest analysis for Hiolle Industries
Theformula for P/Eis:
Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
Or for Hiolle Industries:
P/E of 11.54 = €4.26 ÷ €0.37 (Based on the trailing twelve months to December 2018.)
The higher the P/E ratio, the higher the price tag of a business, relative to its trailing earnings. 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.
Probably the most important factor in determining what P/E a company trades on is the earnings growth. That's because companies that grow earnings per share quickly will rapidly increase the 'E' in the equation. That means unless the share price increases, the P/E will reduce in a few years. And as that P/E ratio drops, the company will look cheap, unless its share price increases.
In the last year, Hiolle Industries grew EPS like Taylor Swift grew her fan base back in 2010; the 159% gain was both fast and well deserved. The cherry on top is that the five year growth rate was an impressive 38% per year. With that kind of growth rate we would generally expect a high P/E ratio.
The P/E ratio indicates whether the market has higher or lower expectations of a company. You can see in the image below that the average P/E (12) for companies in the machinery industry is roughly the same as Hiolle Industries's P/E.
That indicates that the market expects Hiolle Industries will perform roughly in line with other companies in its industry. The company could surprise by performing better than average, in the future. I inform my view byby checking management tenure and remuneration, among other things.
The 'Price' in P/E reflects the market capitalization of the company. In other words, it does not consider any debt or cash that the company may have on the balance sheet. In theory, a company can lower its future P/E ratio by using cash or debt to invest in growth.
Spending on growth might be good or bad a few years later, but the point is that the P/E ratio does not account for the option (or lack thereof).
Net debt totals just 3.1% of Hiolle Industries's market cap. So it doesn't have as many options as it would with net cash, but its debt would not have much of an impact on its P/E ratio.
Hiolle Industries has a P/E of 11.5. That's below the average in the FR market, which is 17.9. The company hasn't stretched its balance sheet, and earnings growth was good last year. The low P/E ratio suggests current market expectations are muted, implying these levels of growth will not continue.
Investors should be looking to buy stocks that the market is wrong about. As value investor Benjamin Graham famously said, 'In the short run, the market is a voting machine but in the long run, it is a weighing machine.' We don't have analyst forecasts, but shareholders might want to examinethis detailed historical graphof earnings, revenue and cash flow.
Of course,you might find a fantastic investment by looking at a few good candidates.So take a peek at thisfreelist of companies with modest (or no) debt, trading on a P/E 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. |
Hilton to Build Tech-Driven Meeting and Event Spaces for Biz Travelers
Business travelers are growing tired of meeting in outdated hotel spaces and working alone in their rooms. That’s whyHilton Hotels & Resortsis revamping its events strategy to strengthen its appeal to business travelers by upgrading the technology and design of its current offerings.
The chain says it’s in discussions with a number of franchisees open to adopting two new design concepts called ensemble and character rooms. Each is already in use at select Hilton locations, but the company now aims to expand availability for event planners and business travelers after positive market testing.
Character rooms, such as The Reverbery at the Hilton Austin, pay homage to a city’s culture — similar to lifestyle hotel brands — while ensemble rooms are modeled after a converted innovation lab built by the brand in 2017 at its Hilton McLean Tysons Corner property in Virginia. Both concepts offer wireless charging and digital whiteboards for presentations powered by cloud technology.
“We know that our customers want technology that is intuitive and helps enable successful, productive meetings,” said Vera Manoukian, Hilton’s global brand head. “Our new tech packages give both the meeting professional and attendee what they want.”
Since opening the ensemble room at Hilton McLean to customers two years ago, the property has earned 15 percent more in revenue compared to preexisting rooms, Manoukian added. Groups, meetings, and events currently drive 30 percent of Hilton Hotels & Resorts’ total annual revenue.
Hilton has focused heavily on its meeting room transformation over the past year, including thelaunch of its meetings and events specific brand Signia Hiltonin February. The hotel chain is also concerned with travelers’ willingness to work outside their hotel rooms.
“Customers do not want to be in a room and instead choose to work near lobbies with access to a hotel’s F&B [food and beverage] presence, among other amenities,” said Manoukian. “We are enhancing those spaces to make them conducive for all-day work.”
That includes opening restaurants likeVariain Hilton’s Norfolk hotel to the public outside of business hours, she added. As per any renovation projects at Hilton’s hotels, franchisees will pick up the tab on all changes. Owners can also choose how many concept rooms they want to build.
Hilton says it’s still too early to determine how quickly the chain will expand its new concept rooms and communal areas to its nearly 600 existing locations, but it will work together with managers to implement them.
“While meeting attendees and planners are our customers, the hotel teams and owners are also, so we want this to be a collaborative process that’s customizable for each property,” Manoukian said.
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ERYTECH Announces Opening of Operations at its New Princeton, NJ GMP Manufacturing Facility
• Inauguration event held last week to officially open 30,000 sq. ft GMP manufacturing facility constructed in Princeton, NJ to produce lead product candidate eryaspase in the United States
PRINCETON, N.J. and CAMBRIDGE, Mass. and LYON, France, June 24, 2019 (GLOBE NEWSWIRE) --ERYTECH Pharma (Euronext: ERYP - Nasdaq: ERYP), a clinical-stage biopharmaceutical company developing innovative therapies by encapsulating drug substances inside red blood cells, announced today the opening of its new Princeton, NJ GMP manufacturing facility.
The facility will support production capacity needs for eryaspase, the Company`s lead product candidate for patients in the United States. Eryaspase is in Phase 3 clinical development for the treatment of second-line pancreatic cancer. The Phase 3 clinical trial, which is referred to as the Trybeca-1 trial is expected to enroll approximately 500 patients with second-line metastatic pancreatic cancer at approximately 120 clinical sites in Europe and the United States. The trial started enrolling patients in Europe in September 2018 and is now actively enrolling patients in several European countries. The Princeton facility is targeted to begin manufacturing eryaspase in the fourth quarter of this year to ensure supply for US participants in the Trybeca-1 trial.
The Princeton facility is equipped with multiple clean rooms, with flexibility designed into its configuration and staffing for further scale-up, in view of supplying eryaspase for this Phase 3 and other clinical trials, as well as for the initial expected commercial demand in the United States, if approved.
"The official inauguration of the Princeton, NJ facility last week represents our strong commitment to the United States and the technologic transferability of our ERYCAPS platform",said Gil Beyen, CEO of Erytech. "The investment we see coming to fruition today signals the company`s growth and ushers in hope for the numerous cancer patients we are dedicated to serve."
Speakers at the site inauguration included Pancreatic Cancer Expert Physician Marcus Noel, MD, and Kerry McKean Kelly, founder of Kelly`s Heroes patient advocacy group. Comments were also shared by the local Mayor, Hemant Marathe, ERYTECH`s Facility Project Leader, Siera Talbott, and CFO/COO, Eric Soyer.
About pancreatic cancer
Pancreatic cancer is a disease in which malignant (cancer) cells are found in the tissues of the pancreas. Every year, there are approximately 150,000 new cases of pancreatic cancer diagnosed in Europe and the United States. Advanced pancreatic cancer is a particularly aggressive cancer, with a five-year survival rate of less than 10%. It is currently the fourth leading cause of cancer death in Europe and the United States and is projected to rise to the second leading cause by 2030. Limited therapeutic options are currently available for this indication, thereby reinforcing the need to develop new therapeutic strategies and rational drug combinations with the aim of improving overall patient outcomes and quality of life.
About ERYTECH:www.erytech.com
ERYTECH is a clinical-stage biopharmaceutical company developing innovative red blood cell-based therapeutics for severe forms of cancer and orphan diseases. Leveraging its proprietary ERYCAPS platform, which uses a novel technology to encapsulate drug substances inside red blood cells, ERYTECH is developing a pipeline of product candidates for patients with high unmet medical needs.
ERYTECH`s primary focus is on the development of product candidates that target the altered metabolism of cancer cells by depriving them of amino acids necessary for their growth and survival. The Company`s lead product candidate, eryaspase, which consists of L-asparaginase encapsulated inside donor-derived red blood cells, targets the cancer cell`s altered asparagine and glutamine metabolism. Eryaspase is in Phase 3 clinical development for the treatment of second-line pancreatic cancer and in Phase 2 for the treatment of triple-negative breast cancer. ERYTECH is also developing erymethionase, which consists of methionine-gamma-lyase encapsulated in red blood cells to target methionine-dependent cancers.
ERYTECH produces product candidates at its GMP-approved manufacturing site in Lyon, France, and at the American Red Cross in Philadelphia, USA. A large-scale GMP manufacturing facility has recently opened for operations in Princeton, New Jersey, USA and will begin manufacturing later this year.
ERYTECH is listed on the Nasdaq Global Select Market in the United States (ERYP.PA) and on the Euronext regulated market in Paris (ISIN code: FR0011471135, ticker: ERYP). ERYTECH is part of the CAC Healthcare, CAC Pharma & Bio, CAC Mid & Small, CAC All Tradable, EnterNext PEA-PME 150 and Next Biotech indexes.
CONTACTS
[{"ERYTECHEric SoyerCFO & COO": "+33 4 78 74 44 38investors@erytech.com", "NewCapMathilde Bohin / Louis-Victor DelouvrierInvestor relationsNicolas MerigeauMedia relations": "+33 1 44 71 94 94erytech@newcap.eu"}]
Forward-looking information
This press release contains forward-looking statements, forecasts and estimates with respect to the clinical results from and the development plans of eryaspase as well as ERYTECH`s business and regulatory strategy and expansion of ERYTECH`s manufacturing capacity and ability to meet clinical supply demand. Certain of these statements, forecasts and estimates can be recognized by the use of words such as, without limitation, "believes", "anticipates", "expects", "intends", "plans", "seeks", "estimates", "may", "will" and "continue" and similar expressions. All statements contained in this press release other than statements of historical facts are forward-looking statements, including, without limitation, statements regarding the potential of ERYTECH`s product pipeline, its clinical development of eryaspase, its manufacturing capacity and the timing of ERYTECH`s preclinical studies and clinical trials. Such statements, forecasts and estimates are based on various assumptions and assessments of known and unknown risks, uncertainties and other factors, which were deemed reasonable when made but may or may not prove to be correct. Actual events are difficult to predict and may depend upon factors that are beyond ERYTECH`s control. There can be no guarantees with respect to pipeline product candidates that the candidates will receive the necessary regulatory approvals or that they will prove to be commercially successful. Therefore, actual results may turn out to be materially different from the anticipated future results, performance or achievements expressed or implied by such statements, forecasts and estimates. Further description of these risks, uncertainties and other risks can be found in the Company`s regulatory filings with the French Autorité des Marchés Financiers (AMF), the Company`s Securities and Exchange Commission (SEC) filings and reports, including in the Company`s 2018 Document de Référence filed with the AMF on March 29, 2019 and in the Company`s Annual Report on Form 20-F filed with the SEC on March 29, 2019 and future filings and reports by the Company. Given these uncertainties, no representations are made as to the accuracy or fairness of such forward-looking statements, forecasts and estimates. Furthermore, forward-looking statements, forecasts and estimates only speak as of the date of this press release. Readers are cautioned not to place undue reliance on any of these forward-looking statements. ERYTECH disclaims any obligation to update any such forward-looking statement, forecast or estimates to reflect any change in ERYTECH`s expectations with regard thereto, or any change in events, conditions or circumstances on which any such statement, forecast or estimate is based, except to the extent required by law.
PRESS RELEASE
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: Erytech Pharma S.A. via GlobeNewswireHUG#2246377 |
Here's How P/E Ratios Can Help Us Understand Hiolle Industries S.A. (EPA:ALHIO)
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This article is for investors who would like to improve their understanding of price to earnings ratios (P/E ratios). To keep it practical, we'll show how Hiolle Industries S.A.'s (EPA:ALHIO) P/E ratio could help you assess the value on offer. Looking at earnings over the last twelve months,Hiolle Industries has a P/E ratio of 11.54. That corresponds to an earnings yield of approximately 8.7%.
View our latest analysis for Hiolle Industries
Theformula for P/Eis:
Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
Or for Hiolle Industries:
P/E of 11.54 = €4.26 ÷ €0.37 (Based on the trailing twelve months to December 2018.)
The higher the P/E ratio, the higher the price tag of a business, relative to its trailing earnings. All else being equal, it's better to pay a low price -- but as Warren Buffett said, 'It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.'
Probably the most important factor in determining what P/E a company trades on is the earnings growth. When earnings grow, the 'E' increases, over time. And in that case, the P/E ratio itself will drop rather quickly. Then, a lower P/E should attract more buyers, pushing the share price up.
Hiolle Industries's 159% EPS improvement over the last year was like bamboo growth after rain; rapid and impressive. The sweetener is that the annual five year growth rate of 38% is also impressive. So I'd be surprised if the P/E ratio wasnotabove average.
One good way to get a quick read on what market participants expect of a company is to look at its P/E ratio. As you can see below Hiolle Industries has a P/E ratio that is fairly close for the average for the machinery industry, which is 12.
That indicates that the market expects Hiolle Industries will perform roughly in line with other companies in its industry. If the company has better than average prospects, then the market might be underestimating it. Further research into factors such asmanagement tenure, could help you form your own view on whether that is likely.
One drawback of using a P/E ratio is that it considers market capitalization, but not the balance sheet. Thus, the metric does not reflect cash or debt held by the company. The exact same company would hypothetically deserve a higher P/E ratio if it had a strong balance sheet, than if it had a weak one with lots of debt, because a cashed up company can spend on growth.
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.
Hiolle Industries's net debt is 3.1% of its market cap. It would probably trade on a higher P/E ratio if it had a lot of cash, but I doubt it is having a big impact.
Hiolle Industries's P/E is 11.5 which is below average (17.9) in the FR market. The company hasn't stretched its balance sheet, and earnings growth was good last year. The low P/E ratio suggests current market expectations are muted, implying these levels of growth will not continue.
When the market is wrong about a stock, it gives savvy investors an opportunity. If it is underestimating a company, investors can make money by buying and holding the shares until the market corrects itself. We don't have analyst forecasts, but you might want to assessthis data-rich visualizationof earnings, revenue and cash flow.
But note:Hiolle Industries 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. |
Should You Buy HiTechPros SA (EPA:ALHIT) For Its Dividend?
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Today we'll take a closer look at HiTechPros SA (EPA:ALHIT) from a dividend investor's perspective. Owning a strong business and reinvesting the dividends is widely seen as an attractive way of growing your wealth. On the other hand, investors have been known to buy a stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations.
With a nine-year payment history and a 7.9% yield, many investors probably find HiTechPros intriguing. It sure looks interesting on these metrics - but there's always more to the story . Some simple analysis can reduce the risk of holding HiTechPros for its dividend, and we'll focus on the most important aspects below.
Click the interactive chart for our full dividend analysis
Companies (usually) pay dividends out of their earnings. If a company is paying more than it earns, the dividend might have to be cut. So we need to form a view on if a company's dividend is sustainable, relative to its net profit after tax. In the last year, HiTechPros paid out 96% of its profit as dividends. Its payout ratio is quite high, and the dividend is not well covered by earnings. If earnings are growing or the company has a large cash balance, this might be sustainable - still, we think it is a concern.
Remember, you can always get a snapshot of HiTechPros's latest financial position,by checking our visualisation of its financial health.
One of the major risks of relying on dividend income, is the potential for a company to struggle financially and cut its dividend. Not only is your income cut, but the value of your investment declines as well - nasty. The first recorded dividend for HiTechPros, in the last decade, was nine years ago. Although it has been paying a dividend for several years now, the dividend has been cut at least once by more than 20%, and we're cautious about the consistency of its dividend across a full economic cycle. During the past nine-year period, the first annual payment was €1.00 in 2010, compared to €1.25 last year. This works out to be a compound annual growth rate (CAGR) of approximately 2.5% a year over that time. The dividends haven't grown at precisely 2.5% every year, but this is a useful way to average out the historical rate of growth.
Modest growth in the dividend is good to see, but we think this is offset by historical cuts to the payments. It is hard to live on a dividend income if the company's earnings are not consistent.
Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. Strong earnings per share (EPS) growth might encourage our interest in the company despite fluctuating dividends, which is why it's great to see HiTechPros has grown its earnings per share at 19% per annum over the past five years. Although earnings per share are up nicely HiTechPros is paying out 96% of its earnings as dividends, which we feel is borderline unsustainable without extenuating circumstances.
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. First, it's not great to see how much of its earnings are being paid as dividends. Next, earnings growth has been good, but unfortunately the dividend has been cut at least once in the past. In summary, we're unenthused by HiTechPros as a dividend stock. It's not that we think it is a bad company; it simply falls short of our criteria in some key areas.
Now, if you want to look closer, it would be worth checking out ourfreeresearch on HiTechProsmanagement tenure, salary, and performance.
If you are a dividend investor, you might also want to look at ourcurated list of dividend stocks yielding 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. |
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