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Are Dividend Investors Getting More Than They Bargained For With Regis Healthcare Limited's (ASX:REG) Dividend?
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Today we'll take a closer look at Regis Healthcare Limited (ASX:REG) 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. If you are hoping to live on your dividends, it's important to be more stringent with your investments than the average punter. Regular readers know we like to apply the same approach to each dividend stock, and we hope you'll find our analysis useful.
With a four-year payment history and a 6.2% yield, many investors probably find Regis Healthcare intriguing. We'd agree the yield does look enticing. Some simple analysis can reduce the risk of holding Regis Healthcare 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. 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, Regis Healthcare paid out 100% of its profit as dividends. With a payout ratio this high, we'd say its dividend is not well covered by earnings. This may be fine if earnings are growing, but it might not take much of a downturn for the dividend to come under pressure.
In addition to comparing dividends against profits, we should inspect whether the company generated enough cash to pay its dividend. Regis Healthcare paid out 142% of its free cash flow last year, suggesting the dividend is poorly covered by cash flow. Paying out such a high percentage of cash flow suggests that the dividend was funded from either cash at bank or by borrowing, neither of which is desirable over the long term. Cash is slightly more important than profit from a dividend perspective, but given Regis Healthcare's payouts were not well covered by either earnings or cash flow, we would definitely be concerned about the sustainability of this dividend.
As Regis Healthcare's dividend was not well covered by earnings, we need to check its balance sheet for signs of financial distress. A rough way to check this is with these two simple ratios: a) net debt divided by EBITDA (earnings before interest, tax, depreciation and amortisation), and b) net interest cover. Net debt to EBITDA is a measure of a company's total debt. Net interest cover measures the ability to meet interest payments. Essentially we check that a) the company does not have too much debt, and b) that it can afford to pay the interest. With net debt of 2.86 times its EBITDA, Regis Healthcare has a noticeable amount of debt, although if business stays steady, this may not be overly concerning.
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 8.41 times its interest expense appears reasonable for Regis Healthcare, although we're conscious that even high interest cover doesn't make a company bulletproof.
Consider gettingour latest analysis on Regis Healthcare'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. Regis Healthcare has been paying a dividend for the past four years. 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 four-year period, the first annual payment was AU$0.18 in 2015, compared to AU$0.16 last year. The dividend has shrunk at around 2.0% a year during that period. Regis Healthcare's dividend hasn't shrunk linearly at 2.0% per annum, but the CAGR is a useful estimate of the historical rate of change.
A shrinking dividend over a four-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.
With a relatively unstable dividend, it's even more important to evaluate if earnings per share (EPS) are growing - it's not worth taking the risk on a dividend getting cut, unless you might be rewarded with larger dividends in future. It's good to see Regis Healthcare has been growing its earnings per share at 28% a year over the past 5 years. Earnings per share have been growing very rapidly, although the company is also paying out virtually all of its profit in dividends. Generally, a company that is growing rapidly while paying out a majority of its earnings, is seeing its debt burden increase. We'd be conscious of any extra risk added by this practice.
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. We're a bit uncomfortable with Regis Healthcare paying out a high percentage of both its cashflow and earnings. Next, earnings growth has been good, but unfortunately the dividend has been cut at least once in the past. In summary, Regis Healthcare has a number of shortcomings that we'd find it hard to get past. Things could change, but we think there are a number of better ideas out there.
Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 6 analysts we track are forecasting for Regis Healthcarefor freewith publicanalyst 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. |
Is There Now An Opportunity In Regis Healthcare Limited (ASX:REG)?
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Regis Healthcare Limited (ASX:REG), which is in the healthcare business, and is based in Australia, saw significant share price movement during recent months on the ASX, rising to highs of A$3.5 and falling to the lows of A$2.56. 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 Regis Healthcare's current trading price of A$2.6 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 Regis Healthcare’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Regis Healthcare
According to my relative valuation model, the stock seems to be currently fairly priced. 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 15.51x is currently trading slightly below its industry peers’ ratio of 16.83x, which means if you buy Regis Healthcare today, you’d be paying a reasonable price for it. And if you believe Regis Healthcare should be trading in this range, then there isn’t much room for the share price grow beyond where it’s currently trading. Is there another opportunity to buy low in the future? Since Regis Healthcare’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
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. Though in the case of Regis Healthcare, it is expected to deliver a relatively unexciting earnings growth of 2.6%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
Are you a shareholder?REG’s future growth appears to have been factored into the current share price, 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 REG? 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 tabs on REG, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive growth outlook may mean it’s worth diving deeper into other factors 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 Regis Healthcare. You can find everything you need to know about Regis Healthcare inthe latest infographic research report. If you are no longer interested in Regis Healthcare, 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. |
Sanders says generational attacks on him and Biden amount to 'ageism'
Sen. Bernie Sanders chafed at generational attacks against the older Democratic candidates on the debate stage on Thursday night, saying the digs struck him as "ageism." “I think that's kind of ageism to tell you the truth,” Sanders, who is 77, responded when a journalist asked about the "generational argument being made by one of your younger rivals." Sanders went on to say that what all the Democratic candidates are trying to do is “to end discrimination in this country against women, against minorities, against the LGBT community, and I think on ageism as well.” Sanders’ accusation came after a striking exchange earlier in the evening between former Vice President Joe Biden and Rep. Eric Swalwell, who was the second-youngest candidate on the debate stage at 38. (South Bend Mayor Pete Buttigieg was the youngest at 37.) “I was six years old when a presidential candidate came to the California Democratic Convention and said, ‘It’s time to pass the torch to a new generation of Americans.’” Swalwell said, pausing for effect. “That candidate was then-Sen. Joe Biden.” Biden, who is 76, wasted no time in responding, telling the young presidential hopeful that he was “still holding on to that torch.” A free-for-all followed, with multiple candidates trying to weigh in on the issue of which generation should next lead the country. Sanders, for his part, said the pressing problems in the nation are "not generational." "The issue is, who has the guts to take on Wall Street, to take on the fossil fuel industry, to take on the big money interests who have unbelievable influence over the economic and political life of this country?" Sanders shot back on stage. |
How Financially Strong Is Reece Limited (ASX:REH)?
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Mid-caps stocks, like Reece Limited (ASX:REH) with a market capitalization of AU$5.4b, aren’t the focus of most investors who prefer to direct their investments towards either large-cap or small-cap stocks. However, history shows that overlooked mid-cap companies have performed better on a risk-adjusted manner than the smaller and larger segment of the market. This article will examine REH’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. Don’t forget that this is a general and concentrated examination of Reece’s financial health, so you should conduct further analysisinto REH here.
Check out our latest analysis for Reece
REH has built up its total debt levels in the last twelve months, from AU$100m to AU$1.7b , which accounts for long term debt. With this growth in debt, REH's cash and short-term investments stands at AU$99m , ready to be used for running the business. Additionally, REH has generated AU$139m in operating cash flow during the same period of time, leading to an operating cash to total debt ratio of 8.2%, meaning that REH’s operating cash is less than its debt.
Looking at REH’s AU$807m in current liabilities, the company has been able to meet these obligations given the level of current assets of AU$1.9b, with a current ratio of 2.31x. The current ratio is the number you get when you divide current assets by current liabilities. For Trade Distributors companies, this ratio is within a sensible range since there is a bit of a cash buffer without leaving too much capital in a low-return environment.
REH is a relatively highly levered company with a debt-to-equity of 86%. This is not unusual for mid-caps as debt tends to be a cheaper and faster source of funding for some businesses. No matter how high the company’s debt, if it can easily cover the interest payments, it’s considered to be efficient with its use of excess leverage. A company generating earnings after interest and tax at least three times its net interest payments is considered financially sound. In REH's case, the ratio of 8.86x suggests that interest is appropriately covered, which means that lenders may be inclined to lend more money to the company, as it is seen as safe in terms of payback.
REH’s high cash coverage means that, although its debt levels are high, the company is able to utilise its borrowings efficiently in order to generate cash flow. This may mean this is an optimal capital structure for the business, given that it is also meeting its short-term commitment. This is only a rough assessment of financial health, and I'm sure REH has company-specific issues impacting its capital structure decisions. You should continue to research Reece to get a better picture of the mid-cap by looking at:
1. Valuation: What is REH 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 REH is currently mispriced by the market.
2. Historical Performance: What has REH's returns been like over the past? Go into more detail in the past track record analysis and take a look atthe free visual representations of our analysisfor more clarity.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
UFC on ESPN 3 loses bout on the eve of weigh-ins
Vince Murdock UFC on ESPN 3 withdrawal UFC featherweight Vince Murdock on Thursday announced that he had to withdraw from his UFC on ESPN 3 bout with Jordan Griffin. On the eve of weigh-ins, Murdock posted to Instagram, announcing that he didn't have the proper medical clearance in order to compete on Saturday and would be unable to "make the walk." As it was, Murdock was stepping in as a late replacement for Chas Skelly. "Difficult as it is to say, I must let you know that I won’t be making the walk this Saturday," Murdock wrote. "Unfortunately at this time the UFC requires some more test to clear me medically fit to fight. As difficult as it is for me to write this message, I strongly believe with the required test completed in the coming days I will be cleared to fight. "I apologize to everyone that was looking forward to seeing me make the walk this Saturday. No one is more crushed than I am. I strongly believe this will be resolved soon and I will have another opportunity to make the walk." With only a few hours to go until the official weigh-in on Friday, it was unclear at the time of publication if UFC officials would be able to secure a new opponent for Griffin to remain on Saturday's UFC on ESPN 3 fight card in Minneapolis, Minn. TRENDING > BJ Penn caught on tape allegedly fighting a bouncer after being tossed from a strip club https://www.instagram.com/p/BzO4OoOABgd/ |
What You Must Know About Genworth Mortgage Insurance Australia Limited's (ASX:GMA) Beta Value
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If you own shares in Genworth Mortgage Insurance Australia Limited (ASX:GMA) 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 are more sensitive to general market forces than others. Beta is a widely used metric to measure a stock's exposure to market risk (volatility). Before we go on, it's worth noting that Warren Buffett pointed out in his 2014 letter to shareholders that 'volatility is far from synonymous with risk.' Having said that, beta can still be rather useful. The first thing to understand about beta is that the beta of the overall market is one. A stock with a beta below one is either less volatile than the market, or more volatile but not corellated with the overall market. In comparison a stock with a beta of over one tends to be move in a similar direction to the market in the long term, but with greater changes in price.
Check out our latest analysis for Genworth Mortgage Insurance Australia
With a beta of 0.95, (which is quite close to 1) the share price of Genworth Mortgage Insurance Australia has historically been about as voltile as the broader market. If the future looks like the past, we could therefore consider it likely that the stock price will experience share price volatility that is roughly similar to the overall market. Beta is worth considering, but it's also important to consider whether Genworth Mortgage Insurance Australia is growing earnings and revenue. You can take a look for yourself, below.
Genworth Mortgage Insurance Australia is a small cap stock with a market capitalisation of AU$1.2b. Most companies this size are actively traded. It takes less capital to move the share price of small companies, and they are also more impacted by company specific events, so it's a bit of a surprise that the beta is so close to the overall market.
Genworth Mortgage Insurance Australia has a beta value quite close to that of the overall market. That doesn't tell us much on its own, so it is probably worth considering whether the company is growing, if you're looking for stocks that will go up more than the overall market. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as Genworth Mortgage Insurance Australia’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 GMA’s future growth? Take a look at ourfree research report of analyst consensusfor GMA’s outlook.
2. Past Track Record: Has GMA 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 GMA's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how GMA 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. |
McCormick (MKC) Q2 2019 Earnings Call Transcript
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McCormick(NYSE: MKC)Q2 2019 Earnings CallJun 27, 2019,8:00 a.m. ET
• Prepared Remarks
• Questions and Answers
• Call Participants
Kasey Jenkins
Good morning. This is Kasey Jenkins, vice president of McCormick investor relations. Thank you for joining today's second-quarter earnings call. To accompany this call, we posted a set of slides at ir.mccormick.com.
[Operator instructions] We'll begin with remarks from Lawrence Kurzius, chairman, president, and CEO; and Mike Smith, executive vice president and CFO. During our remarks, we will refer to certain non-GAAP financial measures. These include information in constant currency as well as adjusted operating income, adjusted income tax rate and adjusted earnings per share that exclude the impact of special charges and, for 2018, transaction and integration expenses related to the acquisition of our Frank's and French's brands as well as the net nonrecurring income tax benefit associated with the December 2017 U.S. tax reform legislation.
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Reconciliations to the GAAP results are included in this morning's press release and slides. In our comments, certain percentages are rounded. Please refer to our presentation, which includes the complete information. In addition, as a reminder, today's presentation contains projections and other forward-looking statements.
Actual results could differ materially from those projected. The company undertakes no obligation to update or revise publicly any forward-looking statement, whether because of new information, future events or other factors. As seen on Slide 2, our forward-looking statements also provide information on risk factors that could affect our financial results. It is now my pleasure to turn the discussion over to Lawrence.
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
Thank you, Kasey. Good morning, everyone. Thanks for joining us. Our solid second-quarter results were in line with our expectations.
And as we enter the second and most significant half of our year, we are confident in our growth trajectory and that we are well positioned to deliver strong results in 2019. Our successful execution of our strategies and engagement of employees around the world have driven sales, operating profit and adjusted EPS growth as well as operating margin expansion in both the second quarter and year to date. Starting on Slide 4. Our broad and advantaged global flavor portfolio continues to position us to meet the demand for flavor around the world to grow our business.
Among our second-quarter highlights across our portfolio, we drove growth in our consumer segment base business and through new products in all regions, including Zatarain's meal solutions and frozen entrées and U.K. rapid recipe mixes. In the Americas, Frank's RedHot sauce continues its strong performance, and we are also gaining momentum with Frank's internationally. In our flavor solutions segment, our Americas and EMEA regions drove significant growth in flavors, branded foodservice and condiments, with strong contributions from both new products and the base business.
We are confident our breadth and reach will continue to differentiate McCormick and will be the foundation of our sales growth as consumers' demand for flavor continues to rise. Now let me go to more detail on our second-quarter performance, as seen on Slide 5, as well as provide some business comments before turning it over to Mike who will go more in depth on the quarter end results and discuss our 2019 financial guidance. Starting with our top line for the second quarter. Second-quarter sales were comparable to the year-ago period, including a 3% unfavorable impact from currency.
In constant currency, sales grew 3% for the total company, with both segments growing sales in each of our three regions. This growth was attributable to higher volume and product mix as well as pricing and was entirely organic driven by the base business and new products as we had no acquisition impact in the quarter. In our consumer segment, sales declined 1%, including a 3% unfavorable impact from currency. In constant currency, sales grew 2%.
In our flavor solutions segment, sales grew 1% and in constant currency grew 4%. In addition to our top line growth, we grew adjusted operating income and expanded our adjusted operating margin. With our higher sales and cost savings led by our Comprehensive Continuous Improvement Program, CCI, we grew the second quarter's adjusted operating income 5% or 8% in constant currency and expanded our adjusted operating margin 80 basis points. At the bottom line, our second-quarter adjusted earnings per share of $1.16 was 14% higher than $1.02 in the second quarter of 2018 driven primarily by our adjusted operating income growth and the lower adjusted tax rate.
And this 14% adjusted earnings-per-share growth includes an unfavorable impact from currency. Our second-quarter results were solid, and we continue to expect another year of strong performance in 2019. We're reaffirming our sales outlook, and as Mike will explain in detail, we are updating our operating profit outlook and increasing our earnings per share outlook. I'd like to turn now to some business updates with a focus this morning on highlights from our consumer and flavor solutions segments and update on our business transformation activity and our business momentum that reinforces our confidence in the remainder of the year.
Turning on Slide 6 with our consumer segment. As I just mentioned, we grew constant currency sales 2%, with increases in each of our three regions. In the Americas, we grew constant currency sales 2% driven by higher volume and product mix. A late Easter, which delayed the start of grilling season, tempered sales growth for the quarter.
We estimate our consumption growth for the quarter, including both measured and unmeasured channels, was 2%. Our IRI data indicates U.S. spice and seasoning scanner sales for multi-outlets grew 2% for the category and 1% for McCormick branded. While the late grilling start slowed the category growth, it had a greater impact on our consumption.
We again had strong growth in unmeasured channels, including club, e-commerce and Hispanic retail chains. Our category management initiatives, effective marketing support, merchandising execution, expanded distribution and new products contributed to drive consumption growth across our Americas consumer portfolio. McCormick-branded dry recipe mixes and Stubb's barbecue continued their momentum of consumption and share growth. Zatarain's frozen items, both base business and new products, drove growth.
Frank's RedHot sauce continued strong performance with distribution gains, with total distribution points hitting a record high. And with our category management initiatives and focused marketing support, French's mustard grew consumption and share. We believe these actions will continue to drive consumption and sales growth in the second half of the year. Now turning to Europe, Middle East and Africa, the EMEA region.
Constant currency growth was driven by very strong promotional programs and targeted brand marketing across the region. Expanded distribution and new products were also growth drivers. We had broad-based growth across most of the region, including strength in Eastern Europe. We're excited by our continued momentum on new product launches and the successes we've realized to date with more flavors and varieties to come as well as further distribution expansion.
In the Asia/Pacific region, we built further momentum of Frank's and French's, particularly in China, India and Australia. The foundation we continue to establish, while still early days, is driving results. Although growth in the region has been partially impacted by recent macroeconomic pressures in China, our fundamentals across the region remain strong. Turning now to Slide 7.
In our flavor solutions segment, our sales performance was strong. Our constant currency sales growth was 4% driven by higher volume and product mix on base business as well as new products. We're continuing to win with our customers through new products, expanded distribution and promotional activities. In the Americas, we drove constant currency sales growth of 3%.
We had strong sales growth to quick-service restaurants as well as in our flavor product category. Our flavor sales were driven by snack seasonings, partially due to new products and our customers' promotions and by products that deliver the clean label and better-for-you attributes our customers are seeking. We also had strong branded foodservice growth driven by increased distribution with national and regional customers, promotional activity with operators and expansion in emerging channels. In branded foodservice, we continue to realize the benefit of leveraging our full portfolio of McCormick spices and seasonings and Frank's, French's and Cattlemen's products across operators.
Our strong momentum in EMEA was once again reflected in our second-quarter results. Sales growth was outstanding, 9% in constant currency, and was broad based across the portfolio both from a product category and customer perspective. We drove sales growth to quick-service restaurants, partially due to their strong promotional activity, and to packaged food companies with new products being a key driver. Turning now to Slide 8.
As we previously discussed most recently at CAGNY, we are making investments to build the McCormick of the future, including in our Global Enablement organization to transform McCormick through globally aligned innovative services enabling the business to grow. As technology provides the backbone for this greater process alignment, information sharing and scalability, we're also making investments in our information systems. We have progressed our ERP replacement program and accelerated the transformation of our ways of working. This will enable us to realize the benefits of a scalable platform for growth sooner.
We have estimated the total cost of our ERP investment to range between $150 million and $200 million from 2019 through the anticipated completion of our global rollout in fiscal 2021. The capital spend portion is estimated to be $90 million to $120 million and program expenses $60 million to $80 million. Mike will discuss this further in his remarks. Next, as we are at the midpoint of the year, I'd like to share a few comments about the momentum we are carrying into the balance of the year.
Our largest quarters are ahead of us. And as we have remarked previously, our operating profit growth is weighted toward the second half of our year. As seen on Slide 9, our confidence for the second half has bolstered first by our plans for a strong Americas fall and holiday season, partially driven by a significant increase in brand marketing. We continue to optimize our brand marketing spend, both in terms of working and nonworking mix as well as in timing, increasing our effectiveness and getting more value out of each marketing dollar.
We have intentionally skewed our brand marketing spend to be heavier later in the year to maximize our ROI and support the key holiday period. Additionally, we have robust brand marketing investments planned in support of the significant array of new products we've launched across all regions during our first half and are now gaining momentum in distribution. And we have exciting additional new product launches in our second half. This new product lineup includes: in the U.S., street tacos following the successful U.K.
street food launch; complete meal seasonings; a package of complementary seasonings for our consumers' protein, vegetables and starch; and Thai Kitchen coconut milk in a resealable tetra package. In EMEA, in addition to flavor and geographic extensions, we'll be launching premium Grinders. And in China, we're launching a full range of thick texture salad dressings and light meal sauces. Our confidence is also driven by new distribution we've successfully secured, realizing the benefits of distribution gained throughout the first half of the year across both our consumer and flavor solutions segments.
And in flavor solutions, we expect continued momentum and wins with our customers through new products and promotional activities. Finally, as we've mentioned previously, we will be lapping several onetime items which impacted us unfavorably in late 2018 such as the unusual fourth quarter impacts we had in the Americas consumer business and our move to a new global headquarters. We're excited about our plans and confident in delivering strong sales growth in our second half as well as significant profit realization while continuing to invest in the business. Now I'd like to provide a few summary comments as seen on Slide 10 before turning it over to Mike.
At the foundation of our sales growth is the rising consumer demand for flavor. We are aligned with the consumers' increased interest in bolder flavors, demand for convenience and focus on fresh natural ingredients as well as with emerging purchase drivers such as greater transparency around the sourcing and quality of food. With this increased interest, flavor continues to be an advantaged global category, which, combined with our execution against effective strategies, will drive strong results. We have a solid foundation and in an environment that continues to be dynamic and fast paced, we are ensuring we remain agile, relevant and focused on sustainable growth.
Our experienced leaders and employees are executing against our strategies, which are designed to build long-term value for our shareholders. Our second-quarter financial results across both our consumer and flavor solutions segments contributed to a great first half of the fiscal year. Our fundamentals are strong, and we're confident the initiatives we have under way position us to continue our growth trajectory. We're balancing our resources and efforts to drive sales with a work to lower costs to build fuel for growth and higher margin while making the investments in our future.
We have confidence in our updated fiscal year outlook, and we are well positioned to deliver another strong year in 2019. We remain excited as we enter our second half and continue to drive results. Around the world, McCormick employees are driving our momentum and success, and I thank them for their efforts and engagement. Thank you for your attention.
And it is now my pleasure to turn it over to Mike for additional remarks on our second-quarter financial results and our updated 2019 outlook.
Mike Smith--Executive Vice President and Chief Financial Officer
Thanks, Lawrence, and good morning, everyone. As Lawrence indicated, we delivered solid second-quarter results in line with our expectations. I'll begin with a discussion of our results and then follow with details of our full-year 2019 financial outlook. Turning on Slide 12.
We grew sales 3% in constant currency, and as Lawrence mentioned earlier, this was entirely organic growth driven by the base business and new products as we had no acquisition impact in the quarter. Both our consumer and flavor solutions segments delivered top line constant currency growth in each of our three regions. The consumer segment grew sales 2% in constant currency. This growth was driven by all three regions and was attributable to expanded distribution, new products and pricing.
On Slide 13, consumer segment sales in the Americas rose 2% in constant currency versus the second quarter of 2018. This increase was driven by higher volume and product mix, including Zatarain's products, Frank's RedHot sauces, branded extracts and our branded Hispanic products, partially tempered by the delayed grilling season start. In EMEA, constant currency consumer sales were up 1% from a year ago. Higher volume and product mix were driven by new products, distribution gains and promotional activities.
This growth was partially offset by a decline in private label as well as pricing actions, including those related to planned trade promotional activity for new products. We grew consumer sales in the Asia/Pacific region 3%, with growth in India and Australia driven by our marketing programs as well as expanded distribution. Additionally, China pricing actions were partially offset by related volume impacts as well as the macroeconomic pressures Lawrence mentioned earlier. Turning to our flavors solutions segment on Slide 16.
We grew second-quarter constant currency sales 4%, with growth in all three regions led by strength in EMEA. In the Americas, flavor solutions constant currency sales increased 3% with broad-based growth across the portfolio, excluding a decline in bulk ingredients. New products, expanded distribution and our customer promotional activities all contributed to the sales increase. In EMEA, we grew flavor solutions sales 9% in constant currency across both packaged food companies and quick-service restaurants, partially due to their promotional activity.
This growth was driven by new products, pricing and base business volume growth and spanned all categories. In the Asia/Pacific region, flavor solutions sales in constant currency grew 2% versus the year-ago period as higher sales to quick-service restaurants were partially driven by the timing of the promotional activities. Across both segments, adjusted operating income, which excludes special charges and for 2018, the transaction and integration costs related to the acquisition of our Frank's and French's brands, rose 5% in the second quarter versus the year-ago period and excluding the impact of unfavorable currency, rose 8%. Adjusted operating income in the consumer segment rose to $138 million, a 7% increase.
Adjusted operating income in the flavor solutions segment rose to $77 million, a 2% increase. In constant currency, adjusted operating income increased 9% in consumer segment and 5% in the flavor solutions segment. In both segments, the increase was primarily driven by CCI-led cost savings, higher sales and lower brand marketing expenses. The impact of these drivers in the flavor solutions segment was partially offset by an unfavorable transactional impact of foreign currency exchange rates as well as unfavorable mix related to a sales shift in quick service restaurants from limited time offers to core menu items.
As seen on Slide 21, in the second quarter, we increased gross profit margin 30 basis points year on year driven by CCI-led cost savings. Our selling, general and administrative expense as a percentage of net sales decreased by 50 basis points from the second quarter of 2018. This decrease was primarily driven by lower brand marketing investments, which, as Lawrence mentioned earlier, is partially driven by timing. And through our new marketing excellence organization, we are increasing our efficiency and speed as well as realizing brand marketing CCI through the creation of in-house services and consolidated media buys.
As a reminder, while our first half brand marketing is lower than last year, we are planning to spend brand marketing comparable to 2018, partially by reinvesting our continued marketing excellence cost savings and nonworking media spend reductions into working media. Therefore, we are planning brand marketing increases in our second half. SG&A leverage gained from CCI-led cost savings initiatives and onetime global benefit plan alignment was offset by business transformation expenses driven by our ERP platform replacement. In fiscal year 2019, we expect the ERP expenses to be concentrated in our second and third quarters.
The combination of the gross margin expansion and the overall SG&A leverage resulted in an adjusted operating margin expansion of 80 basis points for the second quarter of 2019. Turning to income taxes on Slide 22. Our second-quarter adjusted effective income tax rate was 18.9% as compared to 22.2% in the year-ago period. Our second-quarter adjusted rate was favorably impacted by discrete tax items, principally due to stock option exercises.
As we have discussed in previous quarters, favorable tax rate impacts of option exercises are partially offset by payroll and social-related taxes, which unfavorably impact operating profit. Considering the year-to-date favorable impact from discrete items, we now expect our full-year 2019 adjusted effective tax rate to be approximately 21%. There can be volatility in that rate quarter-to-quarter due to the unpredictability of discrete items, changes to our forecasted mix of earnings and interpretation of regulations continuing to be released clarifying the impacts of the 2017 U.S. Tax Act.
Income from unconsolidated operations was $10 million compared to $7 million in the second quarter of 2018, a 28% increase driven by excellent performance by our McCormick de Mexico joint venture. For 2019, we now expect a high single-digit increase in our income from unconsolidated operations. At the bottom line, as shown on Slide 24, second-quarter 2019 adjusted earnings per share was $1.16, up 14% from $1.02 for the year-ago period, primarily due to growth in our operating performance, including from our joint ventures, and a lower adjusted income tax rate. And this increase included an unfavorable impact from currency.
The company continues to generate strong cash flow. On Slide 25, we've summarized highlights for cash flow and the quarter end balance sheet. Our cash flow provided from operations was $314 million through the second quarter of 2019 compared to $235 million from the first half of 2018. Our strong operating cash flow was driven by higher operating income and our continued working capital initiatives.
As we execute against programs to achieve working capital reductions, including inventory management programs, we continue to see improvements in our cash conversion cycle, finishing the second quarter down six days versus our fiscal year-end. A portion of this cash was used to pay down $88 million of acquisition debt as the company continues to focus on paying down debt. As we have maintained our disciplined acquisition strategy with a focus on paying down debt, we finished the second quarter with a debt to adjusted EBITDA ratio below four times, which is pacing us ahead of our target of three times by the end of 2020. So as Lawrence mentioned during the first quarter earnings call, while our priority is paying down debt, it is also time for us to start exploring acquisition opportunities which represent a key part of our long-term growth strategy.
For the first half of fiscal 2019, we returned $151 million of cash to shareholders through dividends and used $54 million for capital expenditures this period. We expect 2019 to be another year of strong cash flow driven by profit and working capital initiatives. And our priority is to continue to have a balanced use of cash, making investments to drive growth, returning a significant portion to our shareholders through dividends and to pay down debt. Let's now move to our current financial outlook for 2019 on Slide 26.
We continue to expect another year of strong performance in 2019 with our broad and advantaged flavor portfolio, effective growth strategies and focus on profit realization. We are reaffirming our sales outlook and updating our operating profit and earnings per share outlook. We continue to estimate, based on prevailing rates, a two percentage point unfavorable impact from currency rates on net sales, adjusted operating income and adjusted earnings per share. We also continue to expect the unfavorable currency will be greater in the first half of the year than in the second half.
At the top line, we reaffirm our guidance to grow sales 1% to 3%, which in constant currency is a 3% to 5% projected growth rate. As a reminder, this will be entirely organic growth driven primarily by higher volume and product mix as well as the impact of pricing to offset an anticipated low single-digit cost increase. We continue to project our 2019 gross profit margin to be 25 to 75 basis points higher than in 2018, in part driven by our CCI-led cost savings. We're now expecting our adjusted operating income growth to be 6% to 8% from $930 million in 2018, which in constant currency is an 8% to 10% projected growth rate, remaining above our long-term objective and reflects our continued focus on profit realization.
Our cost savings target remains approximately $110 million, and we expect brand marketing to be comparable to 2018. Our updated adjusted operating income growth rate continues to reflect expected strong performance. The decrease from the outlook last year during our March earnings call reflects the impacts of a classification shift in our ERP spending, the operating expense headwind related to option exercises, which partially offset the tax benefit, and global developments including trade and economic conditions in selected countries. As Lawrence mentioned, we are progressing our ERP replacement program.
And while our estimated total 2019 project investment related to this business transformation has remained unchanged, we now expect a lower 2019 capital spend component and higher operating expenses than we had originally expected for 2019. Resulting from this classification shift, we are lowering our 2019 capital spend outlook to approximately $200 million, and our 2019 updated operating profit outlook reflects the increased expense. We are excited about this investment to enable us to transform our ways of working and realize the benefits of a scalable growth platform. We are increasing our guidance for 2019 adjusted earnings per share to be in the range of $5.20 to $5.30, which compares to $4.97 of adjusted earnings per share in 2018 and represents a 5% to 7% increase or in constant currency, 7% to 9%.
This increase reflects the impact of changes I previously mentioned, our updated adjusted operating income outlook, the expected increase in income from unconsolidated operations and the projected lower adjusted effective tax rate. In summary, we continue to project strong growth in our 2019 constant currency outlook for sales, adjusted operating profit and adjusted earnings per share, following record double-digit performance across each objective in 2018 and while continuing to invest for future growth. I'd like to now turn it back to Lawrence for some additional remarks before we move to your questions.
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
Thank you, Mike. Now that Mike has shared our financial results and outlook in more detail, I'd like to recap the key takeaways as seen on Slide 27. We're delivering against our plans both for sales and profit realization and are confident in the momentum of our business. With our year-to-date results, we have a strong start to the year.
Moving into our second half, we're confident in our plans, including brand marketing support, new product launches and new distribution, which will drive further growth. Our 2019 outlook continues to reflect strong operating performance. And finally, we are sustainably positioned for growth and are continuing to deliver differentiated results while also investing to build the McCormick of the future. Now let's turn to your questions.
Operator
[Operator instructions] Our first question comes from the line of Andrew Lazar with Barclays.
Andrew Lazar--Barclays -- Analyst
Hi. Good morning, everybody. Lawrence, I know that last quarter was one of the first in probably a couple of years where McCormick actually gained share in the core spices and seasonings business in the U.S. And I know that's something that obviously you've been narrowing the gap quite a bit with the category and then flipped to gaining some share. I think your comment in 2Q was that the delayed -- the Easter delay around grilling season, I think you worded it, it hit McCormick or affected McCormick at a greater rate than, let's say, the category, and so it looked like there was a little bit of a share loss.
I'm just trying to get a sense of why that dynamic would've played out for McCormick differently than, let's say, the category and if there's any change in sort of the cadence of continuing to feel better about share gains going forward.
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
Right. Sure, Andrew. Well, first of all, it's not Easter. It's the grilling season that was the issue.
Easter fell later in the calendar. We actually had a great Easter season, but the late Easter did compress the grilling season, and that compression of the grilling season impacted our grilling products. And seasonally, our grilling season items, particularly our Grill Mates seasoning blends, are a big part of our business at this time of year. We didn't mention it in our prepared remarks, but it was also an exceptionally wet season.
So the quarter was, I think, the fifth wettest on record, and May was the second wettest on record. And just the combination of the slow -- the late grilling season, that compression of the grilling season and some unfavorable weather was a headwind to our Grill Mates range. So that caused us to pace behind the category. I think the whole category was somewhat depressed by the compression of that grilling season.
We're not the only ones to have a grilling range, so -- but we're the market leader in the Grill Mates range. It's a big part of our business at this time of the year. So category was only up about 2%. We were only up about 1% in terms of spices and seasonings for the quarter, and we lost about 30 basis points of share.
Although we're getting into a stronger position from a share gain standpoint, there are going to be some moving parts. I'd say that 30 basis points is not something that we are concerned about, that we've had a good strong underlying trend. And I also want to point out that the unmeasured channels are not captured in that, and we continue to have very strong growth in the unmeasured channel area that does not come through that consumption data. I'll also point out that private label also lost share.
So while there had been a lot of concerns about private label in the market, private label is becoming less and less of a factor. So that's not [Inaudible] that came in.
Operator
Our next question comes from the line of David Driscoll with Citi Research.
David Driscoll--Citi Research -- Analyst
Thank you and good morning. Two questions for me. Just on the operating profit guide down, can you just talk about the environment outside the United States and the impact to your operating profit guidance? And then just a longer-term question, Lawrence, wanted to get your sense as to the in-home cooking trends. I just -- I think they are quite positive right now.
But wanted to get your sense as to -- as the U.S. unemployment rate remains very, very low, how do you see those in-home trends continuing over the course of kind of medium term? Do you think that the low unemployment will drive the people out to the restaurants? Or do you really see in-home cooking as a sustainable driver even with this very, very low unemployment rate?
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
I'm going to let Mike take the front end of that.
Mike Smith--Executive Vice President and Chief Financial Officer
Yes. I'll talk about -- the change in operating profit guidance was really driven primarily by the shift from capital to expense in the ERP side of things. In the global economic environment, as you mentioned, was a small piece of that. But I would just characterize things as volatile right now.
We've talked about how we've had mitigation plans for Brexit and EMEA. That's on again, off again. It's been longer than we would have thought at this point. We had the Mexico scare about a month ago.
We have significant business down there. And we have the China slowdown. China had the slowest growth from a GDP perspective in 20 years in their first quarter. So it's really volatile now, and we kind of consider that for our ongoing operating profit guidance for this year.
But the real change versus our previous guidance is due to just a classification shift on ERP.
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
And as far as eating out trends, this is a long-term trend. Unemployment has been very low for quite a long time. I think that this cooking-at-home trend is more a characteristic of the millennial generation and is not being driven by economic factors. It's being more driven by a desire for more fresh food and a different kind of lifestyle.
And so I think that the unemployment rate -- I think that, that trend continues intact in the short, medium and long term.
Operator
Our next question comes from the line of Ken Goldman with JP Morgan.
Ken Goldman--J.P. Morgan -- Analyst
Thanks. Good morning, everybody. Two questions for me. And if you addressed this, forgive me, I have a couple earnings this morning.
But number one, you're looking for a very big jump in the tax rate in the second half, but historically, you've consistently -- I would -- I think it's fair to say over-guided when it comes to taxes, just to be conservative perhaps and which is great. But just to be aligned with history, why shouldn't we model a little bit of a lower tax rate than what you've guided to for the second half? And then my second question is I wanted to get a sense, the economic conditions you mentioned in China, was that more on the foodservice side, on the retail side? I just wanted to get a little bit more color on exactly what the headwind is there.
Mike Smith--Executive Vice President and Chief Financial Officer
It's Mike. I'll talk about the taxes. I mean we talked about this in the past. I mean you're right generally.
We guide to an underlying tax rate based on regulations and things. It has gotten a bit volatile the last couple of years when the accounting rules changed around stock option -- discrete items, stock option exercises. What we try to do is lay out the underlying. And if there's discrete items like that, that happen, that is a favorable to us, and we've seen that through the first half of the year.
I mean one of the things with our stock appreciation over the last couple of years, there's been significant stock option exercises a lot by retirees. And that does also drive some unfavorable from an operating profit perspective, and it puts more shares out there, too. So it isn't all something to drop to the bottom line from a tax perspective. But second half, if you do the squeeze, there's 24% to 25%, that is the underlying tax rate.
And as we know, with the GILTI tax and other things that are still uncertain from the federal government, it could go either way. But I'd look to the past a bit, but we've had, in the last year, real significant discrete items from stock options, which may or may not continue.
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
And that's retiree stock option exercises. I'll add some color to that. The -- so on China, that's a really good question, Ken. The slowdown -- there is an economic slowdown in China.
As we all know, we suspect that the official figures are probably optimistic and that maybe the slowdown in China is even greater than would appear from the government statistics that are released. I'm saying that as nicely as I can. And it is the case that we're seeing the biggest impact in the restaurant sector. In China, our consumer business includes a foodservice component because they share a common distribution channel, particularly in the traditional trade and in the smaller markets and that -- those foodservice-related items are where we're seeing some impact.
And anecdotally, we're certainly getting a lot of feedback from our organization in China that foodservice and restaurant sales that are slow. Over in our flavor solutions side of the business, our customers are more focused on core products as a result because they're trying to drive value to the restaurant and bring people in. So I think that the economic conditions are having a greater impact on foodservice and restaurant consumption than on the true retail part of the business where our retails-related items continue to show very strong growth, and our e-commerce business, which is consumer oriented, continues to show really strong growth in that area. There is another compounding factor, and that is this African swine fever.
This caused -- starting to show up as a meat shortage and rising meat prices in China, which puts cost pressure on the whole foodservice sector there. Of course, that bleeds over to all the alternative meats as well and with the resulting price impacted the consumer who's going through different foodservice outlets. So that's a little bit of a longish answer, but it is more foodservice than retail.
Operator
Our next question comes from the line of Alexia Howard with Bernstein.
Alexia Howard--Sanford C. Bernstein -- Analyst
Good morning, everyone. So two questions. The first one on the consumer Americas business and the fact that it was, I guess, negatively affected by the shorter grilling season, maybe the wet weather hit things a little hard this time as well. Does that mean we would expect to go back to a more normal level of sales growth starting next quarter? Is there anything sort of out there that would say it wouldn't sort of start to get back to a more normal level next time? And then a more specific question on the EMEA flavor solutions business. Obviously, very strong this time around.
Was that largely based on -- you mentioned the QSR promotions, but were there also new contract wins? I just wanted to get an idea of whether that strength is likely to be sustainable.
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
OK. Those -- thanks, Alexia. We did -- you started your question before we could say hi. The consumer Americas specifically -- first of all, I don't want to apologize too much for the organic growth that we're having there.
Some of our peers are reporting right around us see quite a differential between what we're reporting and what they are. I think that we did have solid organic sales growth, and I don't want us to lose the thread of thought on that. But we are expecting a stronger second half to the year than the first half. And I think that we've been trying to signal that all year long, right from the guidance that we gave at the beginning of the year and even in our remarks at the end of first quarter.
Our marketing spend is deliberately skewed to the second half of the year, whereas the strongest ROI -- our new product launches in the first half, we get the benefit of that in the second half. We have more new products that we're launching in the second half of the year as well. We are going to be lapping some Americas anomalies in the fourth quarter that we don't expect to repeat. So overall, we are expecting higher organic sales growth in the Americas as we go through the second half.
If I could shift gears over to the EMEA flavor solutions business, it's both. So this is a continuation of the strong trend that we saw in the first quarter in that business. In terms of the constant currency growth, it's actually exactly the same as it was in the first quarter, and it's driven by the same factors. We have -- we do have some new customer wins, but we also have strong growth with our existing customer base there.
Operator
Our next question comes from the line of Robert Moskow with Credit Suisse.
Robert Moskow--Credit Suisse -- Analyst
So the guidance for the year has always involved or required a lot of operating leverage, a little bit less now with the operating income down 1%. Can you talk a little bit more detail about the transformation spending that you're doing, the ERP and how -- can you give us some specific details on how that can release more cost savings going forward? You mentioned some efficiencies, but are there any headcount implications heading into the next two years from what you're doing with ERP?
Mike Smith--Executive Vice President and Chief Financial Officer
This is Mike. I mean this is a three-year initiative, and we're in year one of the three years. And we laid out the capital and the expense portions of that, that we'll realize over the three years. We did talk about the shift, and it's really primarily a lot of our expenses happening in the second and third quarter of this year that will shift to more of the capital side of things.
But really, we're focusing on this business transformation of ERP as really a growth initiative. And it will give us efficiencies, no question, as we standardize processes around the world, as we do things one way around the world. It's really to make sure we can focus our resources on growing the business, bringing in acquisitions much easier. We -- in the past, as we brought in acquisitions, it's been tough, and it takes a lot of effort from the organization.
So I think that's something I'd focus from a growth perspective as we continue to get more and more scale to be a bigger company. This is really an investment in our business to get us to the next level.
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
I'll add to that a little bit, Rob, and that is that this is linked also to our Global Enablement program, where we're simplifying our processes, aligning them globally so we can centralize them. And that definitely both enables us to be more agile and grow. And it also does absolutely result in cost savings because we get -- we do get a benefit from that scale. So this is a technology-enabling part of that Global Enablement project.
As part of this, we are also -- as a technology upgrade, we are making the migration to the next generation of SAP S/4HANA. The whole industry is going to have to go to that. Most -- some of us have, but most of us have not yet started that journey. It is -- if you are doing it on a pretty brisk pace as we are, minimum of a 3-year project -- SAP goes out of service in 2025.
We want to be well ahead of that curve, and we see this as an opportunity rather than as a cost that we have to bear down the road.
Robert Moskow--Credit Suisse -- Analyst
OK. A quick follow-up, though. I thought I heard you say that you're in a better position to make acquisitions now. Can you -- did I hear that correctly? And if so, what capabilities are you focused on acquiring?
Mike Smith--Executive Vice President and Chief Financial Officer
As we move down toward the three times debt to EBITDA, I think that was what we were saying, as we get closer to our commitment, that allows us to start looking at acquisitions.
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
Exactly. We're not -- and the kind of acquisitions that we would look for will be consistent with what we've done and messaged in the past, great flavor businesses, great consumer brands that build our consumer flavor business, flavor solutions businesses that add flavor capability and capacity. And those will be the main areas.
Mike Smith--Executive Vice President and Chief Financial Officer
And businesses that grow.
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
And of course, businesses...
Mike Smith--Executive Vice President and Chief Financial Officer
We obviously don't do without growth.
Robert Moskow--Credit Suisse -- Analyst
Got it. So three times is really the trigger?
Mike Smith--Executive Vice President and Chief Financial Officer
No.
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
You can say that's a trigger, but we've said we've always committed to that is that we're going to get to three times by the end of 2020. And as we get -- as we're closing in on that, we're not going to start working on deals once we get to three. Right now, we've got a debt-to-EBITDA ratio that starts with three, and we're on track to end up with...
Mike Smith--Executive Vice President and Chief Financial Officer
Yes. The back end of the year, Rob, is all heavy cash flow. By the end of the year, we will be in sight.
Robert Moskow--Credit Suisse -- Analyst
Yes. Yes. I thought -- OK. Thank you.
Operator
Thank you. Our next question comes from the line of Adam Samuelson with Goldman Sachs.
Adam Samuelson--Goldman Sachs -- Analyst
Yes. Thanks. Good morning, everyone. So a question on the flavor solutions business and really centered on the margin side.
Can you quantify the transactional FX headwind that you're facing there? I'm just -- and the spirit of the question is the first half organic growth from the business is a little bit north of 5% and margin on a year-on-year basis are up 10, 20 basis points. And I'm just trying to think about the operating leverage within that mix. Doesn't seem like it's a headwind, especially when you talk about the bulk ingredients business being down. So I'm just trying to make sure I'm understanding kind of some of the costs or margin pressures that are hitting you there and how to think about that going forward.
Mike Smith--Executive Vice President and Chief Financial Officer
So I think you can think about it in a couple of factors that are actually hitting us in the flavor solutions side. The transactional FX, as you said, which has been hitting us the last six months of last year and the first six months of this year. We'll get into a more favorable FX comparison in the second 6, so that should be an acceleration there. We're also, as Lawrence mentioned, in Asia, particularly in China, as -- we kind of have a negative mix issue right now as the QSRs are focused more on their core products versus the LTOs, or limited time offers.
We make more margin obviously on limited time offers. So -- but we see that -- again, that ebbs and flows. And as the economies recover, we think we'll go back to more LTOs, and we're actually seeing a little bit of that in some of the areas. So I see an acceleration of our operating margin on the flavor solutions side in the second half as those clouds go away.
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
Yes, particularly that FX is going to be less unfavorable in the second half now. We'll -- I'll temper both of our remarks with the caveat that this has really been a volatile environment, and we're -- but the FX outlook that we have right now, we should be getting into comparisons that are pretty close year on year.
Adam Samuelson--Goldman Sachs -- Analyst
OK. And then just quickly on the JV, you took up the range for earnings growth in that line item. Is that just a reflection of the first half performance where you're above the high end of the kind of upper single-digit growth? Or is the full year, is the back half actually improving there, too?
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
Yes. If I can jump in on that, so we're having really strong sales growth in our mix JV, and that's falling through to profitability. So the performance year-to-date there has been really good. We have positive outcomes.
And so originally, our outlook on our JVs as a group was flat. We're in this pretty strong place right now, and so we have a -- it's a little bit of both. We have great results here to date, and we expect that to continue. And I also wanted to really call this out because [Inaudible] we don't talk about the unconsolidated operations, but those are real operating results.
We are not passive operators of our unconsolidated JVs. And just in the last few weeks, both Mike and I have been down there multiple times. These are businesses that we're actively engaged in...
Mike Smith--Executive Vice President and Chief Financial Officer
And doing very well.
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
And doing very well.
Operator
Our next question comes from the line of Chris Growe with Stifel.
Chris Growe--Stifel Financial Corp. -- Analyst
All right. I just had two questions, if I could. I want to follow up on an earlier discussion of obviously a bit of a delay in the grilling season. I guess I wanted to be clear.
Is that something if you get back, you get those sales back, say, starting in Q3, that this sort of pent-up demand by consumers that got pushed out of it? Is that the way to look at it? Or is it more of potential for loss sales given promotional changes there?
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
No. I think that -- if I could -- I know you said you had two parts. I'm going to just jump in and answer. I think the consumption that didn't happen, didn't happen.
It was -- that compression is also something that we've had discussions about with our customers as well, so -- and so there was lost merchandising activity. The customers couldn't get their Easter promotions down fast enough to get the grilling promotion display materials up. And what the consumers didn't consume -- because remember, we talked about through the scanner that the Grill Mates, the grilling part of our seasoning business is the part that was slow, and that's consumption that is -- that's really lost.
Mike Smith--Executive Vice President and Chief Financial Officer
But it's something we planned internally. Everyone knows when Easter was going to hit, we move some advertising into the third quarter. You're going to see a nice up spend in the third quarter, which hopefully will continue to drive good consumption.
Chris Growe--Stifel Financial Corp. -- Analyst
OK. Great. And then in relation to the gross margin, how would you characterize cost inflation and pricing? Are those two roughly estimates? I know you did mention that CCI was the main driver of your gross margin improvement. And maybe related to that, in terms of the CCI savings, are they more gross margin focused this year versus SG&A? Or if you have any color there, just would be interested in that.
Mike Smith--Executive Vice President and Chief Financial Officer
Yes. I wouldn't say from a CCI perspective, we haven't seen a large shift between cost of goods sold CCI or SG&A CCI. I think from a pricing perspective and a cost perspective, as we said at the beginning of the year, this is a relatively benign environment for us, low single-digit cost inflation. And we take up some pricing where we needed to do that this year, but it's a relatively benign size.
So the CCI is able to work for us better to drop through to the operating profit margin.
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
And we have some ongoing discussions on price on specific items as well that are always in progress.
Operator
Our next question comes from the line of Rob Dickerson with Deutsche Bank.
Rob Dickerson--Deutsche Bank -- Analyst
Just kind of an overview question on guidance in the back half given all the questions that have already been asked. So it seems like what you're saying and kind of what I'm hearing is there was maybe a little bit extra spend on the ERP system upgrade, I guess, right? I guess the shift to..
Mike Smith--Executive Vice President and Chief Financial Officer
It's a shift, Rob. It's going from capital to expense. If you noticed, we talked about it in the script. Our capital range was $200 million to $220 million.
We've shifted that down to $200 million now for the year. So capital is down, expense is up. Think about it that way.
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
It's the same money.
Mike Smith--Executive Vice President and Chief Financial Officer
Same cash.
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
On the fixed notes, right?
Mike Smith--Executive Vice President and Chief Financial Officer
Right.
Rob Dickerson--Deutsche Bank -- Analyst
Right. So -- and I mean at times, I actually am very ignorant. I do admit that. So could you just explain that simplistically so everybody on the call can understand?
Mike Smith--Executive Vice President and Chief Financial Officer
Yes. OK. That's fine. I mean I can talk for hours about the accounting around this, but I won't.
But it's -- one of the things when we came into the year and as Lawrence talked about in the January call, we were starting to engage our system integrator to look at the scope of the project, the timing. And we had an estimate of what the total cost would be over this couple of years. And based on what we knew at the time, based on the phases of the project and what is capital -- what is expense from an accounting perspective, we took our best crack at it. Once the system integrator got in and put the plan together, we realized that, OK, there's a little bit more expense upfront than we thought, a little less capital based on the work that they're doing on the ERP design, the implementation, all that sort of stuff.
So that's where -- what you see here. Total cost is going to be about the same. It's just a shift between the two based on the accounting rules and better in preparing right now.
Rob Dickerson--Deutsche Bank -- Analyst
OK. Good answer. And then just secondly and simplistically, it sounds like what you're saying is in the back half, right, given -- I guess sounds like there's been a little margin mix. Pressure is not a lot, but like you said, it kind of -- restaurants relative to kind of base core retail in Asia, let's ignore the ERP piece for a second.
But then in the back half, maybe some of that loose ends we'll see, but it's also there's FX reversal, not a full reversal but less of a headwind. And then it also sounds like maybe that you're coming out of this kind of late, wet post-Easter grilling season that maybe, with marketing dollars, you can improve velocities and hopefully also improve some margin mix. Because when I just look at the guide, right, and you talked about some of the shift in the grilling season in the quarter or what happened in China, but quite frankly, your top line is actually still pretty strong, and you're exactly in line for the most part where you were relative to Q1 on a tier stack basis. So it is -- it seems like it's more of a margin expansion expectation in the back half versus a big top line acceleration relative to the first half.
Is that a fair summary?
Mike Smith--Executive Vice President and Chief Financial Officer
Yes. I think you got that right, Robin. You remember the fourth quarter, some of the challenges, we're going to have a really favorable mix in the back half compared to 2018 based on what we saw last year. And the other thing, someone mentioned CCI before, CCI built during the year, so that does help margin also.
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
Right. And Rob, I'm glad you made a point about the sales growth being solid. And look, take just a step back on the whole overall picture because like last quarter, this was really a solid, no-drama quarter. We put together two pretty undramatic solid performances year-over-year.
We had solid sales growth in this quarter, nearly 3% in constant currency, which compares very strongly to our peers. Through the first half, a little over 3.5% on all of -- sales growth, constant currency, all of it organic. And as we've signaled all year, we expect a stronger second half. We've had good operating profit growth and margin expansion.
It's actually in line with our algorithm. And quarter-by-quarter, we're putting together a strong 2019. We're very confident in our outlook on the second half. And I think that -- so it's a some really good points you raised.
Operator
Thank you. And ladies and gentlemen, this concludes our question-and-answer session. I'll turn the floor back to Mr. Kurzius for any final comments.
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
Great. Thank you, everyone, for your questions and for participating on today's call. McCormick is a global leader in flavor, and we're differentiated with a broad and advantaged portfolio which continues to drive growth. Growing a profitable business and operate in an environment that's changing at an ever faster pace.
We're responding readily to changes in the industry with new ideas, innovation and purpose with a relentless focus on growth, performance and people. We continue to perform strong globally and build shareholder value. Our second-quarter financial results, both across our consumer and flavor solutions segment, was strong. We have confidence in our fiscal year outlook, and we're well positioned to deliver another strong year in 2019.
Kasey Jenkins
Thank you, Lawrence, and thanks to all for joining today's call. If you have any further questions regarding today's information, you can reach us at (410) 771-7140. This concludes this morning's conference call. And for all of you in the U.S., enjoy your 4th of July holiday next week.
Grill some.
Duration: 60 minutes
Kasey Jenkins
Lawrence Kurzius--Chairman, President, and Chief Executive Officer
Mike Smith--Executive Vice President and Chief Financial Officer
Andrew Lazar--Barclays -- Analyst
David Driscoll--Citi Research -- Analyst
Ken Goldman--J.P. Morgan -- Analyst
Alexia Howard--Sanford C. Bernstein -- Analyst
Robert Moskow--Credit Suisse -- Analyst
Adam Samuelson--Goldman Sachs -- Analyst
Chris Growe--Stifel Financial Corp. -- Analyst
Rob Dickerson--Deutsche Bank -- Analyst
More MKC analysis
All earnings call transcripts
This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see ourTerms and Conditionsfor additional details, including our Obligatory Capitalized Disclaimers of Liability.
Motley Fool Transcribinghas no position in any of the stocks mentioned. The Motley Fool recommends McCormick. The Motley Fool has adisclosure policy. |
The Avita Medical (ASX:AVH) Share Price Is Up 575% And Shareholders Are Delighted
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Avita Medical Limited(ASX:AVH) shareholders might be concerned after seeing the share price drop 11% in the last month. But over the last year the share price has taken off like one of Elon Musk's rockets. Indeed, the share price is up a whopping 575% in that time. So it is not that surprising to see the stock retrace a little. While winners often keep winning, it can pay to be cautious after a strong rise.
Anyone who held for that rewarding ride would probably be keen to talk about it.
View our latest analysis for Avita Medical
Avita Medical recorded just AU$2,857,595 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. It seems likely some shareholders believe that Avita Medical has the funding to invent a new product before too long.
Companies that lack both meaningful revenue and profits are usually considered high risk. You should be aware that there is always a chance that this sort of company will need to issue more shares to raise money to continue pursuing its business plan. While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. Avita Medical has already given some investors a taste of the sweet gains that high risk investing can generate, if your timing is right.
Avita Medical had cash in excess of all liabilities of AU$25m when it last reported (December 2018). That's not too bad but management may have to think about raising capital or taking on debt, unless the company is close to breaking even. Given the share price has increased by a solid 575% in the last year, its fair to say investors remain excited about the future, despite the potential need for cash. You can see in the image below, how Avita Medical's cash levels have changed over time (click to see the values). You can see in the image below, how Avita Medical's cash levels have changed over time (click to see the values).
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. However you can take a look at whether insiders have been buying up shares. It's often positive if so, assuming the buying is sustained and meaningful. You canclick here to see if there are insiders buying.
Investors should note that there's a difference between Avita Medical's total shareholder return (TSR) and its share price change, which we've covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. We note that Avita Medical's TSR, at 575% is higher than its share price return of 575%. When you consider it hasn't been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.
We're pleased to report that Avita Medical shareholders have received a total shareholder return of 575% over one year. That's better than the annualised return of 33% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. If you would like to research Avita Medical in more detail then you might want totake a look at whether insiders have been buying or selling shares in the company.
If you are like me, then you willnotwant to miss thisfreelist of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on 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. |
Dovish central banks to push Asian bond yields lower: Reuters poll
By Vivek Mishra and Tushar Goenka
BENGALURU (Reuters) - Benchmark sovereign bond yields in China, India and Indonesia will decline over the coming year, tracking a shift in global monetary policy towards easing triggered by slowing economic growth and fading inflation expectations, a Reuters poll showed.
A turn in global monetary policy and a significant escalation in trade tensions have sparked a sharp rally in almost all Asian sovereign bonds in tandem with their global peers this year - including an inversion in the U.S. Treasury yield curve.
The yield on 10-year bonds of India and Indonesia have fallen around 50 basis points so far in 2019 while yield on China's bonds has hardly changed.
They are all expected to fall slightly over the coming year, according to the June 21-27 poll of over 30 fixed-income strategists.
That view for lower yields is largely driven by expectations the Federal Reserve will cut interest rates in coming months. The U.S. central bank last cut rates in 2008 in response to the global financial crisis.
"We expect Asia bonds to deliver modest positive returns in the second half of this year. The change in the Fed's stance on monetary easing has decidedly opened the door for Asian central banks to turn more accommodating," said Jennifer Kusuma, senior Asia rates strategist at ANZ.
"A sustained inversion in the U.S. Treasury yield curve suggests ample growth pessimism in the price. However, we expect the current fragile sentiment to continue to dominate markets."
The yield on China's 10-year bond is expected to fall to 3.14% by the end of this year, the lowest since March. It is forecast to settle at 3.20% by the end of June next year from about 3.28% on Thursday.
China's 10-year bond yields have hovered within a narrow range and have not dropped below 3% since 2016.
That is despite the People's Bank of China hinting at rate cuts and other monetary policy easing steps to support subdued economic growth in the face of an escalating trade war with the United States.
While China has not cut interest rates since 2015, it has taken other easing measures, including lowering the amount of money banks must park as reserves.
"The 10-year China government bond yields have resumed their downtrend following the escalation of trade tensions. As investors seek assets of longer duration and lower risk, we expect the downtrend to continue and liquidity conditions to remain accommodative," said ANZ's Kusuma.
All but two of 24 respondents who answered an additional question said risks to their forecasts for China and India's 10-year bond yields were skewed more to the downside.
Strategists forecast the yield on India's benchmark bond to decline to 6.85% in a year, from about 6.90% on Thursday.
India's 10-year bond yields plunged about 40 basis points in May, the sharpest monthly fall since November 2016, largely due to increased foreign investments after Prime Minister Narendra Modi's strong victory in the general election.
Below-target inflation in the near-term and a slowing economy have fueled expectations the Reserve Bank of India will cut rates again soon.
"With a relative hawk (RBI Deputy Governor Viral Acharya) stepping down, the monetary policy panel is likely to turn more dovish. This reinforces our call for another 50 basis points cut in the rest of fiscal year 2020," said Eugene Leow, rates strategist at DBS.
"We continue to expect the 10-year yields to be biased for further downside."
Indonesia's 10-year bond yields are forecast to fall to 7.25% in a year's time from about 7.42% on Thursday, mostly because Bank Indonesia is forecast to cut interest rates next quarter, joining central banks in India, Malaysia and the Philippines who have already acted.
"We expect Bank Indonesia will cut interest rates. It will cause bond yields to go down for the rest of the year and early next year," said Ariawan, head of fixed income research at BNI Sekuritas.
(Additional reporting by Anisha Sheth; Polling by Khushboo Mittal; Editing by Jonathan Cable & Shri Navaratnam) |
Why We Think Freedom Foods Group Limited (ASX:FNP) Could Be Worth Looking At
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Freedom Foods Group Limited (ASX:FNP) 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 FNP, it is a company with robust financial health as well as a excellent growth outlook. 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, read the fullreport on Freedom Foods Group here.
Investors in search for stocks with room to flourish should look no further than FNP, with its expected earnings growth of 71%. The optimistic bottom-line growth is supported by an outstanding revenue growth of 82% over the same time period, which indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. FNP's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. FNP’s debt-to-equity ratio stands at 33%, which means its debt level is acceptable. This indicates a good balance between taking advantage of low cost funding through debt financing, but having enough financial flexibility and headroom to grow debt in the future.
For Freedom Foods Group, there are three relevant factors you should further examine:
1. Historical Performance: What has FNP's returns been like over the past? Go into more detail in the past track record analysis and take a look atthe free visual representations of our analysisfor more clarity.
2. Valuation: What is FNP 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 FNP is currently mispriced by the market.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of FNP? 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. |
Did You Miss HUB24's (ASX:HUB) Magnificent 1349% Share Price Gain?
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WhileHUB24 Limited(ASX:HUB) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 13% in the last quarter. But that doesn't change the fact that the returns over the last half decade have been spectacular. In fact, during that period, the share price climbed 1349%. Impressive! Arguably, the recent fall is to be expected after such a strong rise. But the real question is whether the business fundamentals can improve over the long term.
It really delights us to see such great share price performance for investors.
Check out our latest analysis for HUB24
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
During the five years of share price growth, HUB24 moved from a loss to profitability. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. Before buying or selling a stock, we always recommend a close examination ofhistoric growth trends, available here..
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for HUB24 the TSR over the last 5 years was 1355%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
HUB24 shareholders gained a total return of 2.4% during the year. Unfortunately this falls short of the market return. On the bright side, the longer term returns (running at about 71% a year, over half a decade) look better. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. 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.
HUB24 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 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. |
What Kind Of Shareholders Own Ingenia Communities Group (ASX:INA)?
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The big shareholder groups in Ingenia Communities Group (ASX:INA) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that used to be publicly owned tend to have lower insider ownership.
With a market capitalization of AU$737m, Ingenia Communities Group is a small cap stock, so it might not be well known by many institutional investors. In the chart below below, we can see that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about INA.
View our latest analysis for Ingenia Communities Group
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 51% of Ingenia Communities Group. 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 Ingenia Communities Group's historic earnings and revenue, below, but keep in mind there's always more to the story.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Ingenia Communities Group. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Shareholders would probably be interested to learn that insiders own shares in Ingenia Communities Group. It has a market capitalization of just AU$737m, and insiders have AU$8.5m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checkingif those insiders have been buying.
With a 47% ownership, the general public have some degree of sway over INA. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.
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. |
Are Jindal Worldwide Limited’s (NSE:JINDWORLD) High Returns Really That Great?
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Today we'll look at Jindal Worldwide Limited (NSE:JINDWORLD) 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. And finally, we'll look at how its current liabilities are impacting 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. All else being equal, a better business will have a higher ROCE. Overall, it is a valuable metric that has its flaws. 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 Jindal Worldwide:
0.15 = ₹1.1b ÷ (₹14b - ₹6.8b) (Based on the trailing twelve months to March 2019.)
So,Jindal Worldwide has an ROCE of 15%.
See our latest analysis for Jindal Worldwide
ROCE can be useful when making comparisons, such as between similar companies. Using our data, we find that Jindal Worldwide's ROCE is meaningfully better than the 12% average in the Luxury industry. We consider this a positive sign, because it suggests it uses capital more efficiently than similar companies. Aside from the industry comparison, Jindal Worldwide'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.
Jindal Worldwide's current ROCE of 15% is lower than 3 years ago, when the company reported a 21% ROCE. So investors might consider if it has had issues recently. You can click on the image below to see (in greater detail) how Jindal Worldwide's past growth compares to other companies.
Remember that this metric is backwards looking - it shows what has happened in the past, and does not accurately predict the future. ROCE can be misleading for companies in cyclical industries, with returns looking impressive during the boom times, but very weak during the busts. This is because ROCE only looks at one year, instead of considering returns across a whole cycle. If Jindal Worldwide 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.
Jindal Worldwide has total liabilities of ₹6.8b and total assets of ₹14b. Therefore its current liabilities are equivalent to approximately 49% of its total assets. Jindal Worldwide's middling level of current liabilities have the effect of boosting its ROCE a bit.
Unfortunately, its ROCE is still uninspiring, and there are potentially more attractive prospects out there. You might be able to find a better investment than Jindal Worldwide. If you want a selection of possible winners, check out thisfreelist of interesting companies that trade on a P/E below 20 (but have proven they can grow earnings).
If you like to buy stocks alongside management, then you might just love thisfreelist of companies. (Hint: insiders have been buying them).
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. |
BOJ board's debate of more easing at June meet signals possible early action
By Leika Kihara
OSAKA (Reuters) - Bank of Japan policymakers debated the feasibility of ramping up stimulus at their meeting in June, according to a summary of their opinions, which could heighten speculation the central bank will top up monetary support as early as next month.
The discussions, released on Friday, also showed one board member urged that "all policy measures" should be on the table, underscoring the strains on Japan's export-reliant economy from slowing global growth and the U.S.-China trade war.
The policymaker said the BOJ must show its readiness to act if the economy's recovery is derailed.
"All policy measures, including adjustments in short- and long-term interest rates, an acceleration in the pace of money printing and an increase in the amount of asset buying, should be deliberated when considering additional easing," the member was quoted as saying.
Another board member said it was necessary to consider the feasibility of using "a wide range of tools" to ramp up stimulus, while being mindful of their effects and side-effects.
"Amid changes in the external environment such as growing expectations for monetary easing in the United States and Europe, the BOJ also needs to strengthen monetary easing," the member was quoted as saying.
Others in the nine-member board disagreed, calling for maintaining the current stimulus programme for the time being as the economy has so far sustained a moderate expansion, the summary showed.
The BOJ does not disclose the identity of those who made the comments at the rate review. Board member Goushi Kataoka has consistently called on the central bank to take stronger steps to stimulate the economy.
The BOJ kept policy steady this month but governor Haruhiko Kuroda signalled readiness to boost stimulus as global risks cloud the outlook, joining U.S. and European central banks in opening the door to additional easing.
Japan's economy expanded by an annualised 2.1% in the first quarter but many analysts predict growth will slow in coming months as the U.S.-China row wears on.
The summary underscores a rift within the board between those who see room to ramp up stimulus, and others who are worried about the rising cost of prolonged easing such as the knock to financial institutions' profits from near-zero rates.
One board member said lending rates seem to be approaching levels considered the "reversal rate," or the rate at which the drawbacks of ultra-low borrowing costs exceed the benefits.
"If base rates for bank loans decline further, there could be a decline in the amount of bank loans," the member said.
Some analysts believe the BOJ would take steps to mitigate the pain on financial institutions if it were to ease further.
An idea being floated in markets is for the BOJ to provide funds to financial institutions at negative rates, essentially paying them to borrow money from the central bank.
One of the board members dismissed the idea, saying it would not lead to an increase in the amount of bank loans and instead add to the plight of financial institutions by pushing down interest rates further, the summary showed.
Under a policy dubbed yield curve control (YCC), the BOJ guides short-term rates at minus 0.1% and 10-year government bond yields around zero percent. It also buys massive amounts of government bonds and risky assets such as exchange-traded funds.
(Reporting by Leika Kihara; Editing by Shri Navaratnam) |
Jindal Stainless (NSE:JSL) Shareholders Have Enjoyed An Impressive 122% Share Price Gain
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WhileJindal Stainless Limited(NSE:JSL) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 13% in the last quarter. But that doesn't change the fact that the returns over the last three years have been very strong. Indeed, the share price is up a very strong 122% in that time. So the recent fall in the share price should be viewed in that context. If the business can perform well for years to come, then the recent drop could be an opportunity.
View our latest analysis for Jindal Stainless
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During three years of share price growth, Jindal Stainless moved from a loss to profitability. Given the importance of this milestone, it's not overly surprising that the share price has increased strongly.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. Dive deeper into the earnings by checking this interactive graph of Jindal Stainless'searnings, revenue and cash flow.
Investors in Jindal Stainless had a tough year, with a total loss of 46%, against a market gain of about 4.9%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 10% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It is all well and good that insiders have been buying shares, but we suggest youcheck here to see what price insiders were buying at.
Jindal Stainless 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 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. |
How Much is Telstra Corporation Limited's (ASX:TLS) CEO Getting Paid?
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Andy Penn has been the CEO of Telstra Corporation Limited (ASX:TLS) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Telstra
At the time of writing our data says that Telstra Corporation Limited has a market cap of AU$45b, and is paying total annual CEO compensation of AU$4.5m. (This number is for the twelve months until June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$2.4m. We looked at a group of companies with market capitalizations over AU$11b and the median CEO total compensation was AU$5.1m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
So Andy Penn is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Telstra has changed from year to year.
Over the last three years Telstra Corporation Limited has shrunk its earnings per share by an average of 3.8% per year (measured with a line of best fit). In the last year, its revenue changed by just -0.9%.
Unfortunately, earnings per share have trended lower over the last three years. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to checkthis free visual report onanalyst forecastsfor future earnings.
With a three year total loss of 16%, Telstra Corporation Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
Andy Penn is paid around what is normal the leaders of larger companies.
Returns have been disappointing and the company is not growing its earnings per share. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. CEO compensation is one thing, but it is also interesting tocheck if the CEO is buying or selling Telstra (free visualization of insider trades).
Important note:Telstra may not be the best stock to buy. You might find somethingbetterinthis list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Bethenny Frankel in tears over near-death experience
On the season finale of The Real Housewives of New York City Thursday night, Bethenny Frankel was in tears after recovering from a near-death experience, which landed her in the intensive care unit. Frankel was in Boston with her boyfriend, who had brought her miso soup, which happened to have fish flakes in it. Since Frankel has a severe fish allergy, the housewife quickly went into anaphylactic shock. "Paul left to get Benadryl. He came back three minutes later and I was unconscious," said Frankel. "Paul was, like, seeing if I was breathing and I was drooling." Frankel then recalled, through tears, "I was in the ambulance and they jammed this, like, rocket pen in my leg and I got to the ER, and then I heard this guy say if it had been five more minutes that I would have passed away." Frankel explained that it didn't seem real when they told her she was going into the ICU. However, what scared Frankel the most was the fact that she could have died if she had been alone. "If no one was with me I would have been dead. That's what's freaking me out, if I was alone. And I don't want to be alone now," sobbed Frankel. Since August of last year, Frankel has struggled with the tragic loss of her on-and-off boyfriend Dennis Shields, when he was found dead in his Trump Tower apartment. Recently on the show, Frankel went off on Luann de Lesseps over the fact that de Lesseps never asked if Frankel was okay following Shields's death. However, on Thursday night's finale, Frankel said she felt Shields's presence on the way to the emergency room, which, in a way, finally gave her the closure she needed. "I felt Dennis pulling at me," Frankel described to her driver. "I didn't think it. I felt it. I felt that he was pulling me." Frankel explained that, after feeling Shields's presence, she's "done with him," and that "it's over." "I'll always love Dennis," said Frankel. "I talk about him. I think about him every single day. But he always wanted me to be happy ultimately. He would always say to me, 'You will find someone who will love you and treat you the way that you deserve to be treated.' So, it was some sort of closure with Dennis. I'm not going with you." Story continues The Real Housewives of New York City airs Thursdays at 9 p.m. on Bravo . Check out Bethenny Frankel’s total meltdown over her late fiancé: Read more from Yahoo! Entertainment: ‘Big Brother’ just premiered and Twitter is already calling out its racism Rosie O’Donnell wishes Meghan McCain ‘wouldn’t be mean to Joy Behar’ Dramatic ‘KUWTK’ reveals how the Kardashians reacted to the news of Tristan and Jordyn’s cheating scandal 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 Kind Of Shareholder Owns Most Megaport Limited (ASX:MP1) Stock?
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A look at the shareholders of Megaport Limited (ASX:MP1) 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. Warren Buffett said that he likes 'a business with enduring competitive advantages that is run by able and owner-oriented people'. So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.
With a market capitalization of AU$855m, Megaport is a small cap stock, so it might not be well known by many institutional investors. In the chart below below, we can see that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholder can tell us about MP1.
Check out our latest analysis for Megaport
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 13% of Megaport. 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 Megaport, (below). Of course, keep in mind that there are other factors to consider, too.
Megaport is not owned by hedge funds. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
It seems insiders own a significant proportion of Megaport Limited. Insiders own AU$159m worth of shares in the AU$855m company. 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 60% of Megaport 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.
Our data indicates that Private Companies hold 8.1%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.
I always like to check for ahistory of revenue growth. You can too, by accessing this free chart ofhistoric revenue and earnings in thisdetailed graph.
But ultimatelyit is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look atthis free report showing whether analysts are predicting a brighter future.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
MGC TOKEN Asia Pacific Regional Feedback Conference and Star Concert Tour Day 2!
NEW YORK, NY / ACCESSWIRE /June28, 2019 /It can't stop the steps of friendly exchanges between MGC TOKEN global members. Language and ethnic differences also can't stop the enthusiasm of MGC TOKEN global members. On June 27th, MGC TOKEN Asia-Pacific Regional Feedback Conference and Star Concert Tour Day 2 starts, and members will arrive at Bangkok Airport in Thailand.
On the morning of June 27, 2019, MGC TOKEN members from all over the world who have not yet arrived in Bangkok, Thailand, take the bus to their respective departure airports under the leadership of the MGC TOKEN staff and they will assist you to check in. After check in, the members wait for the flight to take off at the airport.
On the afternoon of June 27, 2019, MGC TOKEN members arrive at Bangkok Airport, Thailand. The MGC TOKEN Thai staff have been waiting at the airport. Members gather at the airport after their arrival. The member who arrive first take the bus to the five-star hotel prepared by MGC TOKEN.
When arrive in the hotel, MGC TOKEN staff will assist the members to check in. MGC TOKEN also prepares exquisite cards for members in hotel rooms. Welcome!
On the evening of June 27, 2019, MGC TOKEN members from all over the world finally arrive at the airport and successfully check into the hotel. MGC TOKEN has prepared a Thai-style ancient massage for members, so that you can relax and participate joyfully in the MGC TOKEN Asia-Pacific Regional Feedback Conference and Star Concert on June 28th. MGC MGC TOKEN Global Members will visit local clubhouse in Thailand to enjoy Thai ancient massage under the guidance of the staff.
After the massage, the MGC TOKEN tour guide will lead the members to take a bus back to their respective hotels. MGC TOKEN Asia-Pacific Regional Feedback Conference and the Star Concert Tour Day 2 is successfully completed. We look forward to MGC TOKEN Asia-Pacific Regional Feedback Conference and the Star Concert Tour Day 3.
mgctoken@gmail.com
SOURCE:MGC TOKEN
View source version on accesswire.com:https://www.accesswire.com/550237/MGC-TOKEN-Asia-Pacific-Regional-Feedback-Conference-and-Star-Concert-Tour-Day-2 |
If You Had Bought Mesoblast (ASX:MSB) Stock Five Years Ago, You'd Be Sitting On A 69% Loss, Today
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Statistically speaking, long term investing is a profitable endeavour. But unfortunately, some companies simply don't succeed. To wit, theMesoblast Limited(ASX:MSB) share price managed to fall 69% over five long years. That's not a lot of fun for true believers. It's up 4.8% in the last seven days.
View our latest analysis for Mesoblast
Mesoblast 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last five years Mesoblast saw its revenue shrink by 9.3% per year. That puts it in an unattractive cohort, to put it mildly. Arguably, the market has responded appropriately to this business performance by sending the share price down 21% (annualized) in the same time period. It's fair to say most investors don't like to invest in loss making companies with falling revenue. This looks like a really risky stock to buy, at a glance.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
Thisfreeinteractive report on Mesoblast'sbalance sheet strengthis a great place to start, if you want to investigate the stock further.
Investors in Mesoblast had a tough year, with a total loss of 3.7%, against a market gain of about 12%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. However, the loss over the last year isn't as bad as the 21% per annum loss investors have suffered over the last half decade. We'd need to see some sustained improvements in the key metrics before we could muster much enthusiasm. You could get a better understanding of Mesoblast's growth by checking outthis more detailed historical graphof earnings, revenue and cash flow.
If you are like me, then you willnotwant to miss thisfreelist of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on 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. |
How the Dems used their time during the second night of the first primary debate
The 2020 Democratic presidential candidates largely ignored time constraints during the second night of the first primary debate, seeking break out moments and ways to distinguish themselves from the rest of the field. Moderators gave top-polling candidates extra time to explain their positions on healthcare, immigration and economic policy, with California Sen. Kamala Harris and former Vice President Joe Biden speaking on average about 15 seconds longer than allowed. Biden was involved in most of the night’s longest exchanges. His back-and-forth with Sen. Bernie Sanders of Vermont, who is currently polling among the top candidates, focusing on Biden's 2002 Iraq War vote and Rep. Eric Swalwell of California using Biden’s own words to “pass the torch” to the next generation of lawmakers. Harris, who spoke for nearly 12 minutes, cited her position as a former federal prosecutor and black American to highlight herself as an authority on racial justice. She requested more time to discuss social inequality and drilled fellow top-biller Biden on his past stances on racial issues like busing, noting that she herself was bussed in elementary school. “I do not believe you are a racist,” Harris said, looking at Biden directly. Still, she added, policy regarding race cannot be just an “intellectual debate” among Democrats. Lower-polling candidates saw the relaxed moderating as an opportunity to introduce their platforms to voters. Former Colorado Gov. John Hickenlooper, who has been running as one of the more moderate Democrats in the race, cited his record of reaching across the aisle, like in passing universal background checks “in a purple state.” Candidates also went beyond one-or-two-word answers when asked to name single issues they would attack during their first days in office. Many mentioned several topics instead, spending averages of 10 to 15 seconds to underline their policy plans on the border crisis and foreign policy strategies. Throughout the debate, Sen. Kirsten Gillibrand of New York frequently interjected and had the night’s longest closing remarks, reiterating her role as the author of a universal healthcare bill and frequent advocacy for women’s rights. Those on the night two stage also took more time to address the “threat” of a second Trump presidency after some expressed disappointment that the first night’s candidates didn’t mention the sitting president enough. View comments |
Should You Be Concerned About Saga Furs Oyj's (HEL:SAGCV) Historical Volatility?
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If you're interested in Saga Furs Oyj (HEL:SAGCV), 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. The first category is company specific volatility. This can be dealt with by limiting your exposure to any particular stock. 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 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 Saga Furs Oyj
Looking at the last five years, Saga Furs Oyj has a beta of 1.34. 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 Saga Furs Oyj 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 Saga Furs Oyj fares in that regard, below.
Saga Furs Oyj is a rather small company. It has a market capitalisation of €36m, which means it is probably under the radar of 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.
Since Saga Furs Oyj 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. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as Saga Furs Oyj’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 SAGCV’s future growth? Take a look at ourfree research report of analyst consensusfor SAGCV’s outlook.
2. Past Track Record: Has SAGCV 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 SAGCV's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how SAGCV 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. |
Why Suzlon Energy Limited's (NSE:SUZLON) CEO Pay Matters To You
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In 2016 JP Chalasani was appointed CEO of Suzlon Energy Limited (NSE:SUZLON). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Suzlon Energy
At the time of writing our data says that Suzlon Energy Limited has a market cap of ₹31b, and is paying total annual CEO compensation of ₹90m. (This figure is for the year to March 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at ₹82m. We looked at a group of companies with market capitalizations from ₹14b to ₹55b, and the median CEO total compensation was ₹22m.
Thus we can conclude that JP Chalasani receives more in total compensation than the median of a group of companies in the same market, and of similar size to Suzlon Energy Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Suzlon Energy has changed over time.
Over the last three years Suzlon Energy Limited has shrunk its earnings per share by an average of 68% per year (measured with a line of best fit). It saw its revenue drop -40% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to checkthis free visual report onanalyst forecastsfor future earnings.
With a three year total loss of 67%, Suzlon Energy Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount Suzlon Energy Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
Over the same period, investors would have come away with nothing in the way of share price gains. This analysis suggests to us that the CEO is paid too generously! So you may want tocheck if insiders are buying Suzlon Energy shares with their own money (free access).
Important note:Suzlon Energy may not be the best stock to buy. You might find somethingbetterinthis list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Trump, Xi and the G20 Summit
The heavily anticipated G20 Summit is finally underway in Japan.
We have seen the global equity markets bounce around in response to chatter from both Beijing and Washington.
Economic data from both sides of the fence has shown cracks that have led to a material shift in FED forward guidance. The Chinese government has continued to provide support. It may be last chance saloon to avoid tariffs on all goods exported to the U.S, however.
How both leaders address other world leaders in the early part of the Summit could give some insights into what to expect.
In the early hours of this morning, news from the Summit suggests plenty of sideline action.
Trump has already held meetings with Japan, India and Germany’s heads of state. The U.S President will need to be on the charm offensive. Walking out of key meetings this time around may not be an option.
While the U.S President has been a stern advocate of protectionism, political isolation from the world stage would not suit his needs at this juncture.
The U.S Presidential Election campaigns have kicked off and, with the FED and central banks sounding the alarm bells, the odd auto factory is unlikely to be enough.
Trump will need to come away from the G20 with a string of positives to get his campaign off to a flying start. No one will care where the U.S equity markets are today, but voters will care when it comes to election day.
For U.S farmers, it’s an altogether different story, however.
Financial support from the Republicans was a stop-gap last month and Trump is not going to be able to keep filling the farmer coffers.
The U.S goods trade deficit widened from $70.92bn to $74.55bn in May, according to figures out of the U.S on Wednesday.
From Trump’s perspective, some form of an agreement to support soybean exports to China will need to be achieved. China may be too demanding, however.
The Chinese Premier has continued to maintain his negative views on protectionism at the G20 Summit this morning.
While the U.S has materially shifted on foreign policy, supporting protectionism, China has continued to open its doors to foreign investment.
Unfortunately for China, the Chinese economy alone is not enough to sustain the rest of the world excluding the U.S.
Japanese Prime Minister Abe has already been in talks with both Premier Xi and President Trump.
While Premier Xi will be looking to build both economic and political ties with other members of the G20, the might of the U.S can’t be ignored by the other 18 members.
Foreign policy on Iran, North Korea and trade will be key areas of discussion.
The EU is certainly not in a position to fall out of favor with the U.S President. Canada will be in the same boat.
China’s more open-minded foreign policy approach means that other heads of state can focus more on addressing Trump’s concerns.
It may not all go according to plan, however. With protectionism, must come some degree of isolation. G20 members from the EU and, Germany in particular, will be all too aware of what’s around the corner.
Last week the global equity markets were convinced that the G20 Summit would deliver an end to the extended U.S – China trade war.
This morning, there may be a reality setting. While Trump and Xi may be able to sit across the table from one another, neither may be willing to budge on key demands.
China wants the U.S to cease the ongoing assault on Huawei and to remove tariffs. The U.S wants China to import more goods from the U.S, a tall order.
Will either side surprise the rest of the G20? Progress will need one to succumb to the threats and there has been no evidence of that…
The promise of more talks may be all that the markets will get. That can’t be a good thing. Even if Trump agrees to hold off on more tariffs, there will be a sense of inevitability.
This trade war has been going on for a year and neither side has been able to concede in key areas. There’s really no reason for either side to suddenly change tact. A global recession would certainly change the dynamics…
Premier Xi’s position wouldn’t be under threat should the economy face a material slowdown. For Trump, a U.S recession could bring down the curtain on re-election.
Many U.S voters were on the fence at the last time of asking. Those voters are far more likely to vote with their wallets this time around. That will at least be what Premier Xi will be hoping for…
Thisarticlewas originally posted on FX Empire
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Did AF Gruppen ASA's (OB:AFG) Recent Earnings Growth Beat The Trend?
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When AF Gruppen ASA (OB:AFG) announced its most recent earnings (31 March 2019), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well AF Gruppen has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I've summarized the key takeaways on how I see AFG has performed.
Check out our latest analysis for AF Gruppen
AFG's trailing twelve-month earnings (from 31 March 2019) of øre782m has jumped 17% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 9.9%, indicating the rate at which AFG is growing has accelerated. What's enabled this growth? Let's take a look at whether it is only because of an industry uplift, or if AF Gruppen has seen some company-specific growth.
In terms of returns from investment, AF Gruppen has invested its equity funds well leading to a 41% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 7.5% exceeds the NO Construction industry of 4.4%, indicating AF Gruppen has used its assets more efficiently. However, its return on capital (ROC), which also accounts for AF Gruppen’s debt level, has declined over the past 3 years from 37% to 27%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 11% to 44% over the past 5 years.
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as AF Gruppen gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research AF Gruppen to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for AFG’s future growth? Take a look at ourfree research report of analyst consensusfor AFG’s outlook.
2. Financial Health: Are AFG’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. |
Should Webjet Limited (ASX:WEB) Be Your Next Stock Pick?
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As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Webjet Limited (ASX:WEB), it is a company with impressive financial health as well as a buoyant growth outlook. 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, read the fullreport on Webjet here.
WEB’s debt-to-equity ratio stands at 35%, which means its debt level is acceptable. This means that WEB’s capital structure strikes a good balance between low-cost debt funding and maintaining financial flexibility without overly restrictive terms of debt. WEB's has produced operating cash levels of 0.49x total debt over the past year, which implies that WEB's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For Webjet, there are three essential aspects you should look at:
1. Historical Performance: What has WEB's returns been like over the past? Go into more detail in the past track record analysis and take a look atthe free visual representations of our analysisfor more clarity.
2. Valuation: What is WEB 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 WEB is currently mispriced by the market.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of WEB? Exploreour interactive list of stocks with large potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Should You Worry About Whitehaven Coal Limited's (ASX:WHC) CEO Pay Cheque?
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Paul Flynn has been the CEO of Whitehaven Coal Limited (ASX:WHC) since 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Whitehaven Coal
At the time of writing our data says that Whitehaven Coal Limited has a market cap of AU$3.7b, and is paying total annual CEO compensation of AU$4.6m. (This number is for the twelve months until June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$1.3m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of AU$2.9b to AU$9.2b. The median total CEO compensation was AU$3.4m.
It would therefore appear that Whitehaven Coal Limited pays Paul Flynn more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Whitehaven Coal, below.
On average over the last three years, Whitehaven Coal Limited has grown earnings per share (EPS) by 79% each year (using a line of best fit). It achieved revenue growth of 13% over the last year.
This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Shareholders might be interested inthisfreevisualization of analyst forecasts.
I think that the total shareholder return of 301%, over three years, would leave most Whitehaven Coal Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Whitehaven Coal Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Shareholders may want tocheck for free if Whitehaven Coal insiders are buying or selling shares.
If you want to buy a stock that is better than Whitehaven Coal, thisfreelist of high return, low debt companies is a great place to look.
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. |
California regulator considers penalty against PG&E in 2017 wildfires
(Reuters) - California utilities regulator has opened a case to evaluate and consider penalties against power and gas utility PG&E Corp for its involvement in the fierce wildfires that killed 46 people in Northern California's wine country in 2017.
The proceeding will evaluate findings in the California Public Utilities Commission's (CPUC) Safety and Enforcement Division (SED) investigation into whether PG&E violated any rules during the wildfires, CPUC said Thursday.
The regulator said an investigation into the wildfires by SED found that PG&E failed to follow best industry practices, and that there were "various deficiencies in its vegetation management practices and procedures and equipment operations in severe conditions."
"PG&E's violations during the 2017 fire siege are extensive and disturbing, and go to basic requirements, such as the failure to maintain adequate records," said CPUC Commissioner Clifford Rechtschaffen.
"We will consider all appropriate sanctions in response."
The CPUC also ordered the utility to provide a report on its operations of its electric facilities and to take "immediate corrective action."
PG&E said it was reviewing the CPUC's order and SED's findings in the wildfires, adding that it would "fully cooperate" with the investigation.
CPUC also asked PG&E to create a mobile application for the public to report issues with utility poles.
The San Francisco-based utility filed for bankruptcy in January, citing potential civil liabilities in excess of $30 billion from the North Bay fires and a separate 2018 blaze that killed 85 people.
"We understand and recognize the CPUC's concerns, and acknowledge that while we have implemented significant additional wildfire mitigation measures following the devastating 2017 and 2018 wildfires, there is still more work todo and we are committed to doing it the right way," PG&E said in a statement.
PG&E has named a new chief executive officer and revamped its board this year. It has also said it would significantly expand the practice of shutting off power to communities at risk of wildfire when conditions demand it.
(Reporting by Ismail Shakil in Bengaluru; editing by Gopakumar Warrier) |
Are Tesco PLC's (LON:TSCO) Interest Costs Too High?
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Tesco PLC (LON:TSCO), a large-cap worth UK£22b, comes to mind for investors seeking a strong and reliable stock investment. 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 extending previous success is in the health of the company’s financials. I will provide an overview of Tesco’s financial liquidity and leverage to give you an idea of Tesco’s position to take advantage of potential acquisitions or comfortably endure future downturns. Note that this commentary is very high-level and solely focused on financial health, so I suggest you dig deeper yourselfinto TSCO here.
Check out our latest analysis for Tesco
TSCO has shrunk its total debt levels in the last twelve months, from UK£8.6b to UK£7.3b – this includes long-term debt. With this reduction in debt, TSCO currently has UK£2.3b remaining in cash and short-term investments to keep the business going. Additionally, TSCO has produced UK£2.0b in operating cash flow over the same time period, resulting in an operating cash to total debt ratio of 27%, signalling that TSCO’s operating cash is sufficient to cover its debt.
With current liabilities at UK£21b, it seems that the business may not have an easy time meeting these commitments with a current assets level of UK£13b, leading to a current ratio of 0.61x. The current ratio is calculated by dividing current assets by current liabilities.
With a debt-to-equity ratio of 49%, TSCO can be considered as an above-average leveraged company. This is not unusual for large-caps since debt tends to be less expensive than equity because 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 TSCO’s debt levels to the test by looking at how well interest payments are covered by earnings. Preferably, earnings before interest and tax (EBIT) should be at least three times as large as net interest. For TSCO, the ratio of 7.73x suggests that interest is appropriately covered. Strong interest coverage is seen as a responsible and safe practice, which highlights why most investors believe large-caps such as TSCO is a safe investment.
TSCO’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. But, its lack of liquidity raises questions over current asset management practices for the large-cap. Keep in mind I haven't considered other factors such as how TSCO has been performing in the past. I recommend you continue to research Tesco to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for TSCO’s future growth? Take a look at ourfree research report of analyst consensusfor TSCO’s outlook.
2. Valuation: What is TSCO 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 TSCO 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. |
Stars, surprises comprise All-Star starting rosters
The starting lineups for this summer's Major League Baseball All-Star Game were announced Thursday night, with several surprises getting the nod. Unheralded free agent signees Hunter Pence and DJ LeMahieu were among the names unveiled at their respective positions. LeMahieu, the New York Yankees' second baseman, and Pence, the Texas Rangers' designated hitter, will each suit up for the American League. Pence, 36, is perhaps the biggest surprise after it appeared his time in the majors was coming to an end with the San Francisco Giants last season. after signing a minor league contract with the Rangers in the spring, he was a consistent threat in the lineup (.294 average, 15 home runs) until he was placed on the injured list with a right groin strain on June 17. "To make the transition from the performance last year, to stand in this moment I hope that I'm sitting here kind of as a messenger -- don't let people tell you what you can and can't do," Pence said. "I know this isn't the end goal. The goal is to win a World Series, to make the playoffs. But this is a big honor, a tremendous honor." Pence, now a four-time All-Star, will be starting the game for the first time. LeMahieu, 30, has been a revelation for the Yankees since signing a two-year, $24 million contract in the offseason. He leads the American League in hitting with a .336 average and has added 12 homers and 54 RBIs. LeMahieu will be a first-time All-Star starter, though this is his third roster nod at the exhibition. Arizona Diamondbacks second baseman Ketel Marte (National League) and Minnesota Twins shortstop Jorge Polanco (AL) were among other unexpected names selected as starters after an impressive first half to the season. They are joined by outfielder Ronald Acuna Jr. of the Atlanta Braves (NL) and first baseman Carlos Santana of the Cleveland Indians (AL) as first-time All-Stars. The majority of the remainder of each starting lineup was comprised of some of the game's biggest stars, with Los Angeles Angels outfielder and two-time MVP Mike Trout the leading overall vote-getter. Story continues "It makes you feel good," Trout said. "You put in all the hard work. You play to win, but you also play for all the fans coming to the ballpark to enjoy a baseball game. Enjoy the passion you have for the game. To be voted in and be the highest vote-getter, it means a lot to me." Here are the full starting lineups for each league: AMERICAN Catcher -- Gary Sanchez, Yankees First base -- Carlos Santana, Indians Second base -- DJ LeMahieu, Yankees Shortstop -- Jorge Polanco, Twins Third base -- Alex Bregman, Astros Outfield -- Mike Trout, Angels; George Springer, Astros; Michael Brantley, Astros Designated hitter -- Hunter Pence, Rangers NATIONAL Catcher -- Willson Contreras, Cubs First base -- Freddie Freeman, Braves Second base -- Ketel Marte, Diamondbacks Shortstop -- Javier Baez, Cubs Third base -- Nolan Arenado, Rockies Outfield -- Christian Yelich, Brewers; Cody Bellinger, Dodgers; Ronald Acuna Jr., Braves The remainder of each league's roster will be announced Sunday. This is the first year fan balloting was divided into two phases: "The Primary," which narrowed the starting choices to three at each position, and "The Starters," which will began online Wednesday at noon ET and closed Thursday at 4 p.m. ET. The All-Star Game will be played July 9 at Progressive Field in Cleveland. --Field Level Media |
Former WWE star Tommy Dreamer opens up about depression
Tommy Dreamer battled serious depression while competing in pro wrestling. (George Napolitano/MediaPunch/IPX/AP) Depression is a topic that is not nearly talked about enough, especially in overtly masculine sports like professional wrestling. Former WWE and ECW star Tommy Dreamer is the latest athlete to open up about his struggles with depression, as he shared a harrowing story on his House of Hardcore podcast . Although the title of the article gives away the key part, the story is not for the faint of heart. Dreamer’s story begins at the turn of the century when the ECW went out of business. Dreamer felt slighted by head ECW booker Paul Heyman, who previously begged Dreamer to not leave the company, lest it fold. But when Heyman later left for the WWE, Dreamer felt screwed out of an opportunity, leaving him spiraling into a depression. Heyman eventually offered Dreamer a spot at Wrestlemania 17 but then reneged on the deal. That enraged Dreamer and left him wanting revenge. “I remember I did a show there, and I saw a sign that said, ‘Guns Welcome,’ and I was in Houston. I did an indie show, and I said, ‘What is this?’ I’m from New York, what do you mean, ‘Guns welcome?’ and they said, ‘Oh you are allowed to bring a firearm into the venue.’ I was across the street from the Astrodome. When I tell you it resonated in my head so, so much. That I’ll tell you what I wanted to do. It’s sick that I think this. At Wrestlemania, I was gonna hop the rail and I was gonna whack Paul E. in the back of the head right at the announce table, then I was gonna whack myself. The ultimate martyr, I was gonna hit my pose crack, boom, pull the trigger. Because I was that insane. Don’t know if I would have went through with it, but that’s what I was thinking about everyday. I was like, ‘I will go down in history.’ Pop, boom. First they’d think it as an angle until I shot him. I was so severely depressed and so mental with rage, I needed help.” Fortunately for everyone involved, Dreamer received a call from wrestling commentator Jim Ross, who calmed the then-29-year-old wrestler. He assured Dreamer that they were still thinking of him and wanted to keep him involved. Story continues “Think of how stupid I would have been, how dumb and how messed up my thoughts would have been if they would have come to fruition. I am so happy I didn’t do it, I am so happy that I did get that phone call, from someone who was a stranger, I barely knew the guy. There was another day, there has been a lot of other days.” Not only did Dreamer keep from harming himself and others, but he appeared in the main card of a Wrestlemania six years later, winning as a part of the ECW Origins team. To this day, he continues to be involved with the sport on Major League Wrestling and as a commentator. More from Yahoo Sports: USWNT needs Alex Morgan to step up vs. France Rapinoe stands ground in cross-Atlantic Trump spat Report: Celtics are the favorite to land Walker Sources: Hill meets with NFL over child abuse charges |
Here's What You Should Know About Tesco PLC's (LON:TSCO) 2.5% Dividend Yield
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Today we'll take a closer look at Tesco PLC (LON:TSCO) 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. 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.
A slim 2.5% yield is hard to get excited about, but the long payment history is respectable. At the right price, or with strong growth opportunities, Tesco could have potential. The company also bought back stock equivalent to around 0.7% of market capitalisation this year. Some simple analysis can reduce the risk of holding Tesco for its dividend, and we'll focus on the most important aspects below.
Explore this interactive chart for our latest analysis on Tesco!
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. Tesco paid out 42% of its profit as dividends, over the trailing twelve month period. This is medium payout level that leaves enough capital in the business to fund opportunities that might arise, while also rewarding shareholders. One of the risks is that management reinvests the retained capital poorly instead of paying a higher dividend.
In addition to comparing dividends against profits, we should inspect whether the company generated enough cash to pay its dividend. Tesco paid out 53% of its cash flow as dividends last year, which is within a reasonable range for the average corporation. It's positive to see that Tesco's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
We update our data on Tesco every 24 hours, so you can always getour latest analysis of its financial health, here.
Before buying a stock for its income, we want to see if the dividends have been stable in the past, and if the company has a track record of maintaining its dividend. Tesco has been paying dividends for a long time, but for the purpose of this analysis, we only examine the past 10 years of payments. The dividend has been cut by more than 20% on at least one occasion historically. During the past ten-year period, the first annual payment was UK£0.11 in 2009, compared to UK£0.058 last year. The dividend has shrunk at around 6.5% a year during that period. Tesco's dividend hasn't shrunk linearly at 6.5% per annum, but the CAGR is a useful estimate of the historical rate of change.
We struggle to make a case for buying Tesco for its dividend, given that payments have shrunk over the past ten years.
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 not great to see that Tesco's have fallen at approximately 10% over the past five years. Declining earnings per share over a number of years is not a great sign for the dividend investor. Without some improvement, this does not bode well for the long term value of a company's dividend.
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. Tesco's dividend payout ratios are within normal bounds, although we note its cash flow is not as strong as the income statement would suggest. Second, earnings per share have been in decline, and its dividend has been cut at least once in the past. While we're not hugely bearish on it, overall we think there are potentially better dividend stocks than Tesco out there.
Without at least some growth in earnings per share over time, the dividend will eventually come under pressure either from costs or inflation. See if the 17 analysts are forecasting a turnaround in ourfree collection of analyst estimates here.
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. |
Is Diageo plc (LON:DGE) Investing Effectively In Its Business?
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Today we'll look at Diageo plc (LON:DGE) and reflect on its potential as an investment. Specifically, we're going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business.
Firstly, we'll go over how we 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 measures the amount of pre-tax profits a company can generate from the capital employed in its business. In general, businesses with a higher ROCE are usually better quality. 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 Diageo:
0.16 = UK£4.1b ÷ (UK£32b - UK£7.1b) (Based on the trailing twelve months to December 2018.)
Therefore,Diageo has an ROCE of 16%.
View our latest analysis for Diageo
ROCE can be useful when making comparisons, such as between similar companies. We can see Diageo's ROCE is around the 17% average reported by the Beverage industry. Separate from Diageo's performance relative to its industry, its ROCE in absolute terms looks satisfactory, and it may be worth researching in more depth.
The image below shows how Diageo's ROCE compares to its industry, and you can click it to see more detail on its past growth.
Remember that this metric is backwards looking - it shows what has happened in the past, and does not accurately predict the future. Companies in cyclical industries can be difficult to understand using ROCE, as returns typically look high during boom times, and low during busts. This is because ROCE only looks at one year, instead of considering returns across a whole cycle. Since the future is so important for investors, you should check out ourfreereport on analyst forecasts for Diageo.
Current liabilities are short term bills and invoices that need to be paid in 12 months or less. 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 counteract this, we check if a company has high current liabilities, relative to its total assets.
Diageo has total liabilities of UK£7.1b and total assets of UK£32b. As a result, its current liabilities are equal to approximately 22% of its total assets. Current liabilities are minimal, limiting the impact on ROCE.
This is good to see, and with a sound ROCE, Diageo could be worth a closer look. Diageo shapes up well under this analysis,but it is far from the only business delivering excellent numbers. You might also want to check thisfreecollection of companies delivering excellent earnings growth.
I will like Diageo 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. |
European Companies Look to Build Their Own Walls in the Cloud
(Bloomberg) -- Using code rather than concrete, European companies are busy building walls to protect their data, and are being encouraged by local politicians concerned about threats to their sovereignty.
France’s biggest supplier of drinking water is one example. Before switching to Google’s cloud-based office software, Veolia Environnement SA first hired cybersecurity company Atos SE to handle the encryption of its data before it reached the Alphabet Inc.-owned company’s servers.
Geopolitical tensions and trade wars are making European politicians cautious about domestic champions ceding control of their data to technology suppliers from the U.S. or China, fearing that providers could deny access to critical information about customers or production, or serve as a venue for rogue agents.
Agnes Pannier-Runacher, France’s deputy economy minister, said in an interview that businesses relinquishing control of their data was “a systemic risk” to the competitiveness and sovereignty of an economy.
Firms are increasingly migrating their data into cloud-based ecosystems -- an industry Gartner estimates will be worth about $214 billion in 2019, and one dominated by American and Chinese giants such as Amazon.com.com, Microsoft Corp., and Alibaba Group Holding Ltd.
Germany’s central bank also recently warned the region’s banking sector that the move to shifting data on the cloud will make the industry harder to monitor.
“For many companies, data is a strategic question,” Pannier-Runacher said. “It’s okay to have certain data out of reach in a functioning multilateral system; it becomes problematic in a unilateral system where one side can put pressure and cut access.”
Read More: Huawei Frightens Europe’s Data Protectors. America Does, Too
Under the Trump Administration’s Cloud Act (or the “Clarifying Lawful Overseas Use of Data Act”) that was signed last year, all U.S. cloud providers can be ordered to provide local authorities data stored on their servers no matter where that data is physically stored. A similar concept has been enshrined in Chinese law since 2017, in which information of citizens must be stored in-country and accessible on demand to the authorities.
As a result, European encryption specialists like Atos and Thales have been touting their home-grown history as a unique selling point, when competing with U.S. rivals such as Salesforce.com Inc. Amazon and others. Smaller European-grown cloud providers like Gigas Hosting SA in Spain and OVH Groupe SAS in France – while still dwarfs compared to their U.S. rivals – have not been not shy in making the point that English isn’t their first language
Read More: If You’re to Beat Amazon in Spain, Maybe Start Speaking Spanish
“Veolia wants to maintain control and sovereignty over its data, however secure cloud solutions may be,’’ said Pascal Dalla-Torre, the company’s cybersecurity officer. “We’re building a sanctuary, a secure space. It’s a solution to protect our sensitive data.’’
Atos isn’t alone in tapping the rising demand for European encryption middlemen: Multi-billion-dollar European firms such as defense contractor Thales SA and German software giant SAP SE both sell security products that sit between a company’s data and its cloud provider. Societe Generale, France’s third-largest bank by market cap, said it’s using Netherlands-based Gemalto to secure its cloud-destined information.
Atos says it has a pipeline of 1 billion euros ($1.1 billion) under negotiations for security contracts similar to the one it signed with Veolia.
“European businesses want Google’s technology, but with the right protections -- that’s one of the most common demands we have from customers today,” Atos Chairman and Chief Executive Officer Thierry Breton said in an interview.
Europe is not the only region looking to promote its local providers. Boosted in part by escalating U.S. tensions, Beijing-based database and cloud provider PingCAP is winning over local tech giants, startups and financial institutions to its enterprise software.
U.S. companies yet to see any serious knock-on effect. Oracle Corp. Recently closed at a record high amid positive signs in its transition to cloud-based computing, while Salesforce has been busy inking $15.3 billion deals.
“The pace of innovation of hyper-scalers is so high that European companies must use them to stay in the game,” Carla Arend, researcher IDC’s lead cloud analyst, said. "But the regulatory environment and global security risks are certainly part of the concerns that Europeans are taking into account.”
--With assistance from Fabio Benedetti-Valentini and Gregory Viscusi.
To contact the reporters on this story: Marie Mawad in Paris at mmawad1@bloomberg.net;Helene Fouquet in Paris at hfouquet1@bloomberg.net
To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Nate Lanxon
For more articles like this, please visit us atbloomberg.com
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Britain's biggest rents: Would you pay £65,000 a week?
This large Kensington villa has luxurious interior design throughout. Photo: Sotheby's Paying the rent every month is a big financial burden for many families across Britain. The English housing crisis has pushed rents higher in recent years, and stagnant incomes have only made it harder to keep up. The average rent in the UK this May was £934 per calendar month, according to the HomeLet Rental Index. For most people, that’s a lot of money. But to the wealthiest renters in Britain, that’s just a fraction of what they pay each month. Some people are willing and able to pay mega rents of tens of thousands of pounds each month. This small market is mostly high-net worth individuals who need short-term places to stay for work or business, or as uber-luxe student digs for their children who are at university. These properties would cost tens of millions of pounds to buy. So, even at the eye-watering rents advertised, they’re saving on the option of purchasing. It will come as no surprise that the most expensive homes to rent are in London, where property prices are significantly higher than elsewhere in the country. Central London is also a billionaire’s playground popular with the wealthiest families from all over the world. Here are some of the most expensive rental properties on the market right now: Hampstead: £35,000 per week Frognal, a Hampstead mansion, is on the lettings market. The 6,070 square foot property has eight bedrooms, nine bathrooms, a bar, three reception rooms, an outdoor swimming pool, and a private driveway. It also comes with a guest annex with two bedrooms and a studio flat. This glorious north London family home is available to rent for £35,000. READ MORE: The most expensive properties for sale right now in London Kensington: £35,000 per week This large 13,000 square foot family home is a characterful, period Kensington villa. The living areas are open, light, and spacious. There is an indoor swimming pool that looks out on the garden, a lift to all floors, luxurious interior design throughout, private off street parking, and a separate three-bedroom guest house for visitors. If you want to join the infamous Sloane Rangers of Kensington, you can — for £35,000 a week. Story continues Frognal, a Hampstead mansion, has eight bedrooms and nine bathrooms. Photo: Fox Gregory Knightsbridge: £40,000 per week This exquisite recently refurbished 10,001 square foot penthouse in Knightsbridge overlooks Hyde Park from its terraces, of which there are six. The apartment has seven bedrooms, six bathrooms, a jacuzzi, cinema room, gym, treatment room, and 24-hour concierge. You can move in now for a rent of £40,000 per week. Knightsbridge: £40,000 per week Sitting within the Candy brothers’ development at One Hyde Park — dubbed the most expensive block of flats in the world — is this five-bedroom, five-bathroom apartment that spans 9,125 square feet, taking up the entire seventh floor of the building. That means it has views of both Knighstbridge and Hyde Park. The development benefits from services managed by the neighbouring Mandarin Oriental Hotel, including a pool, gym, squash court, treatment rooms, and an entertainment suite. The rent on this property comes in at £40,000 a week. READ MORE: World's top penthouses: Dream cloud-kissing apartments for sale Mayfair: £65,000 per week Close to both Oxford Street and Knightsbridge, this 4,822 square foot penthouse on Park Lane overlooks Hyde Park. It has five bedrooms, five bathrooms, and sits within the ultra-exclusive Grosvenor House Apartments development. Residents benefit from a private gym, 24-hour room service, daily housekeeping services, and “state of the art home automation technology.” “From organising a dinner party, to setting up your home office and stocking your home with the finest groceries, we make everything completely effortless from the moment you arrive,” according to the advert. The rent is £65,000 per week, which works out to £780,000 a year. |
The RealReal continues an eye-popping year for VC-backed IPOs
The RealRealhas debuted on the NASDAQ, trading under the symbol REAL and closing up 44.5% from its IPO price of $20 per share, up from the original range of $17 to $19. Founded in 2011 by former Pets.com CEO Julie Wainwright, the San Francisco-based company raised about $300 million by selling 15 million shares, with a 30-day underwriter option to purchase up to 2.25 million additional shares. The pricing gave The RealReal an initial market cap of roughly $1.7 billion, well above its last private valuation of $1 billion; it finished trading Friday at a market cap of around $2.5 billion.The operator of an online consignment marketplace provides full-service authentication and merchandising services for luxury goods with a comparatively high take rate, averaging about 35%. Its competitors, such aseBay AuthenticateandPoshmark, take around 20% in commissions for similar services. The appeal of The RealReal, therefore, lies in its claim to completely authenticate any merchandise sold through its website.However, the emphasis on premium offerings and commitment to authenticity has not prevented claims of fraud and the filing of various lawsuits. Chanel filed suit in 2018 alleging the site sold at least seven counterfeit handbags, in addition to claiming The RealReal violated Chanel's stated authority in being the exclusive authenticator of its own branded products. This followed a 2017 lawsuit by a Michigan-based customer alleging The RealReal substantially inflated weight details of gemstones, among other misrepresentations. The 2017 lawsuit was settled in 2018; Chanel's remains ongoing. The RealReal has denied all accusations.Speaking to its successes, however, is its recently acquired status as a fully fledged unicorn. Here's a look at The RealReal's fundraising and valuation history, per PitchBook data:June 2012:$7.5M round | $17M valuationApril 2013:$14M | $56MMay 2014:$20M | $150MApril 2015:$40M | $240MJune 2016:$40M | $300MJune 2017:$50M | $450MJuly 2018:$115M | $745MMarch 2019:$50M | $1.0B Fashion joins biotech While it may have been the most high-profile, The RealReal wasn't the only VC-backed company getting newly minted public status in what's been a busy quarter for successful debuts. Here's a look at three biotech companies Wall Street welcomed this week: Adaptive Technologies Opening to a strong pop on Thursday was biotech-focused software developerAdaptive Technologies, which rose over 100% from its $20 IPO price to reach a first-day close of $40.30. The company offered 15 million shares, up from the 12.5 million previously expected, raising $300 million in the process. Founded in 2009, the Seattle-based company was valued at $1.1 billion with a $195 million Series F in 2015. Its IPO share price gave the business an initial market cap of $2.4 billion.Adaptive Technologies may have a particularly strong advantage thanks to its focus on software development to help analyze and diagnose blood tests. Further, the company previously yielded a $45 million private investment from Microsoft, as Adaptive has pledged to sink at least $12 million into the tech giant's Azure infrastructure over the next seven years. This insulation from the intense speculation of make-or-break FDA-regulated drug pipelines may be viewed as its main appeal for biotech investors often burned by failed clinical trials. Morphic Therapeutics Boston-areaMorphic Therapeutic(aka Morphic Holding) debuted on the NASDAQ on Thursday under the symbol MORF. The company pulled in $90 million after offering 6 million shares at $15 apiece, ultimately closing its first trading day at $18. Founded in 2014, the biotech company raised an $80 million Series B last September. At the time, CEO Praveen Tipirneni reportedly denied any plans for an IPO.Morphic's focus is on orally administered integrin drugs. The company is currently early in its drug development pipeline, with the submission of two investigational new drug (IND) applications expected within a year. In 2018, Morphic struck a collaboration deal withAbbVieto study fibrotic diseases and this year struck a deal with Jannsen involving undisclosed research programs. Karuna TherapeuticsKaruna Therapeutics, also based in Boston, debuted Friday, offering about 5.58 million shares at $16 apiece, which gave it an initial market cap of around $342 million. Karuna was valued at $240 million in April with an $80 million Series B, led byARCH Venture Partners. Friday’s trading saw the stock close up 25% with around 2.7 million shares traded, including after-hours transactions.Founded in 2009, the biotech company is developing drugs to treat neuropsychiatric conditions, such as Alzheimer's disease and schizophrenia. Its lead candidate, KarXT, expects topline Phase 2 results later this year with respect to its treatment of psychosis caused by schizophrenia; other applications of the drug are still in Phase 1 trials.Featured image courtesy of The RealReal |
Did BP p.l.c. (LON:BP.) Insiders Sell Shares?
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We often see insiders buying up shares in companies that perform well over the long term. 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 inBP p.l.c.(LON:BP.).
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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.'
See our latest analysis for BP
Over the last year, we can see that the biggest insider sale was by the , Bernard Looney, for UK£5.9m worth of shares, at about UK£5.41 per share. That means that an insider was selling shares at below the current price (UK£5.51). We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was 100% of Bernard Looney's holding.
We note that in the last year insiders divested 1.5m shares for a total of UK£8.4m. BP insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you willnotwant to miss thisfreelist of growing companies that insiders are buying.
The last quarter saw substantial insider selling of BP shares. Specifically, Bernard Looney ditched US$1.9m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
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. We usually like to see fairly high levels of insider ownership. Insiders own 0.06% of BP shares, worth about UK£70m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
An insider sold BP shares recently, but they didn't buy any. And even if we look to the last year, we didn't see any purchases. But it is good to see that BP is growing earnings. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! Of course,the future is what matters most. So if you are interested in BP, you should check out thisfreereport on analyst forecasts for the company.
Of courseBP 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. |
Need To Know: BP p.l.c. (LON:BP.) Insiders Have Been Selling Shares
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We often see insiders buying up shares in companies that perform well over the long term. 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 inBP p.l.c.(LON:BP.).
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. 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.'
See our latest analysis for BP
The , Bernard Looney, made the biggest insider sale in the last 12 months. That single transaction was for UK£5.9m worth of shares at a price of UK£5.41 each. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of UK£5.51. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was 100% of Bernard Looney's stake.
In the last twelve months insiders netted UK£8.4m for 1.5m shares sold. In the last year BP insiders didn't buy any company stock. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love thisfreelist of companies. (Hint: insiders have been buying them).
The last quarter saw substantial insider selling of BP shares. Specifically, Bernard Looney ditched US$1.9m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that BP insiders own 0.06% of the company, worth about UK£70m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
An insider sold BP shares recently, but they didn't buy any. And even if we look to the last year, we didn't see any purchases. On the plus side, BP makes money, and is growing profits. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! Of course,the future is what matters most. So if you are interested in BP, you should check out thisfreereport on analyst forecasts for the company.
If you would prefer to 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.
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. |
Did Whitehaven Coal Limited (ASX:WHC) Insiders Sell Shares?
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We often see insiders buying up shares in companies that perform well over the long term. 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 inWhitehaven Coal Limited(ASX:WHC).
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.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard Universitystudyfound that 'insider purchases earn abnormal returns of more than 6% per year.'
View our latest analysis for Whitehaven Coal
The MD, CEO & Director, Paul Flynn, made the biggest insider sale in the last 12 months. That single transaction was for AU$3.3m worth of shares at a price of AU$4.98 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of AU$3.60. So it is hard to draw any strong conclusion from it.
Happily, we note that in the last year insiders paid AU$806k for 164k shares. But they sold 1.3m for AU$6.4m. In total, Whitehaven Coal insiders sold more than they bought over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Whitehaven Coal better if I see some big insider buys. While we wait, check out thisfreelist of growing companies with considerable, recent, insider buying.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Whitehaven Coal insiders own about AU$320m worth of shares (which is 8.8% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
The fact that there have been no Whitehaven Coal insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of Whitehaven Coal, we can't say the same about the selling of shares. Of course,the future is what matters most. So if you are interested in Whitehaven Coal, you should check out thisfreereport on analyst forecasts for the company.
But note:Whitehaven Coal 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. |
Why I Like Bushveld Minerals Limited (LON:BMN)
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Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Bushveld Minerals Limited (LON:BMN) due to its excellent fundamentals in more than one area. BMN is a financially-robust company with a great track record and an optimistic growth outlook. Below is a brief commentary on these key aspects. If you're interested in understanding beyond my broad commentary, read the fullreport on Bushveld Minerals here.
BMN is an attractive stock for growth-seeking investors, with an expected earnings growth of 31% in the upcoming year, supported by its outstanding capacity to churn out cash from operating activities, which is predicted to more than double over the next year. This indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. Over the past few years, BMN has demonstrated a proven ability to generate robust returns of 31% Unsurprisingly, BMN surpassed the Metals and Mining industry return of 13%, which gives us more confidence of the company's capacity to drive earnings going forward.
BMN'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 an important determinant of the company’s health. Looking at BMN's capital structure, the company has no debt on its balance sheet. This implies that the company is running its operations purely on off equity funding. which is typically normal for a small-cap company. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.
For Bushveld Minerals, I've put together three fundamental factors you should further research:
1. Valuation: What is BMN 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 BMN is currently mispriced by the market.
2. Dividend Income vs Capital Gains: Does BMN 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 BMN as an investment.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of BMN? 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. |
Tom Daley urges gay footballers to come out of the closet to be positive role models
Olympic Diver Tom Daley, right, and partner Dustin Lance Black at the GQ Magazine 30th Anniversary celebrations, in London in 2018. (Photo by Grant Pollard/Invision/AP) Tom Daley has urged gay football players to come out to demonstrate to young people that sexuality should not be an issue in sport. The 25-year-old British diving champion - who is married to writer and director Dustin Lance Black with whom he shares a one-year-old son - released a video on YouTube in 2013 when he aged 19 revealing he was in a relationship with a man. Daley told Yahoo UK: “I’m sure that in the world of sport there are people that are closeted and feel they can’t come out and feel trapped and I feel really bad for them because it’s such a weight on your shoulders to be living like that. Everyone is ready at different times and there is no right or wrong way to do it, it’s just a matter of being able to do it when you’re ready. Read more: Tom Daley takes batch cooking baby food to Olympic level “But knowing that people in sport, especially a high profile sport, if you were to come out and share your personal story it would help so many young children that look up to you - whether it be a football player or a rugby player - and think, ‘Oh wow! Who I am isn’t going to stop me being able to achieve my dreams in sport.’ View this post on Instagram A post shared by Tom Daley (@tomdaley) on May 29, 2019 at 12:37pm PDT “If anything, being slightly different and being that person can help you be stronger and deal with a lot of different pressures when it comes to competition.” Daley - an ambassador for British Lion Eggs - has created a Pride power bowl recipe in celebration of LGBT Pride month. The Olympic medalist admitted that before he came out he believed the world would end. Daley said: “I think for anyone, whether they’re in sport or not, it is a daunting time to think about coming out and telling people about yourself and who you are. “I built it up to be one of the craziest and scariest things and I thought the world is going to end, it’s this terrible event. It didn’t and I was like, ‘Oh okay that wasn’t so bad.’ Story continues Tom Daley during a photocall at the London Aquatics Centre in Stratford (Credit: PA) “I know that isn’t the same for everyone, I’m very lucky to have had that experience but i think there’s something really powerful about sharing your personal stories. “Just being able to share personal stories can help change people’s hearts and when you change people’s hearts you change their minds and the way they think about things.” Read more: Tom Daley’s husband hits out at British Swimming in buggy row The diving champion said he was “baffled” by the recent spate of homophobic attacks in the UK. Daley said: “It shocking to see in this day and age that things like that can happen. “I think people should be lifting people up and celebrating differences. “When people are attacking people for being different it just baffles me.” Tom Daley is an ambassador for British Lion eggs. For recipe inspiration including Daley’s and more about the essential nutrients eggs contain visit eggrecipes.co.uk ---Watch the latest videos from Yahoo UK--- |
Have Insiders Been Selling Wockhardt Limited (NSE:WOCKPHARMA) Shares?
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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares inWockhardt Limited(NSE:WOCKPHARMA).
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard Universitystudyfound that 'insider purchases earn abnormal returns of more than 6% per year.'
See our latest analysis for Wockhardt
The , Sanjeev Mehta, made the biggest insider sale in the last 12 months. That single transaction was for ₹13m worth of shares at a price of ₹653 each. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. The silver lining is that this sell-down took place above the latest price (₹376). So it may not shed much light on insider confidence at current levels.
Over the last year we saw more insider selling of Wockhardt shares, than buying. 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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love thisfreelist of companies. (Hint: insiders have been buying them).
Over the last three months, we've seen a bit of insider selling at Wockhardt. Insiders only netted ₹1.2m selling shares, in that period. It's not great to see insider selling, nor the lack of recent buyers. But the volume sold is so low that it really doesn't bother us.
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data indicates that Wockhardt insiders own about ₹473m worth of shares (which is 1.1% of the company). However, it's possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we're not overly impressed by these holdings.
Insiders haven't bought Wockhardt stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. To put this in context, take a look at how a company has performed in the past. You can accessthisdetailed graphof past earnings, revenue and cash flow.
But note:Wockhardt 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. |
Have Insiders Been Buying AF Gruppen ASA (OB:AFG) Shares?
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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 before you buy or sellAF Gruppen ASA(OB:AFG), you may well want to know whether insiders have been buying or selling.
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, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard Universitystudyfound that 'insider purchases earn abnormal returns of more than 6% per year.'
See our latest analysis for AF Gruppen
The , Lars Paulsen, made the biggest insider sale in the last 12 months. That single transaction was for øre2.6m worth of shares at a price of øre161 each. That means that an insider was selling shares at slightly below the current price (øre169). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was 80% of Lars Paulsen's holding.
Over the last year, we can see that insiders have bought 47775 shares worth øre4.9m. On the other hand they divested 23513 shares, for øre3.5m. In the last twelve months there was more buying than selling by AF Gruppen insiders. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
AF Gruppen is not the only stock insiders are buying. So take a peek at thisfreelist of growing companies with insider buying.
The last three months saw significant insider selling at AF Gruppen. Specifically, Lars Paulsen ditched øre2.6m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
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. We usually like to see fairly high levels of insider ownership. AF Gruppen insiders own 5.9% of the company, currently worth about øre986m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
An insider sold stock recently, but they haven't been buying. But we take heart from prior transactions. On top of that, insiders own a significant portion of the company. So the recent selling doesn't worry us. Therefore, you should should definitely take a look at thisFREEreport showing analyst forecasts for AF Gruppen.
Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of interesting 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. |
Is Randstad N.V. (AMS:RAND) As Strong As Its Balance Sheet Indicates?
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Randstad N.V. (AMS:RAND), a large-cap worth €8.8b, comes to mind for investors seeking a strong and reliable stock investment. Most investors favour these big stocks due to their strong balance sheet and high market liquidity, meaning there are an abundance of stock in the public market available 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. Using the most recent data for RAND, I will determine its financial status based on its solvency and liquidity, and assess whether the stock is a safe investment.
See our latest analysis for Randstad
RAND's debt levels surged from €1.4b to €1.9b over the last 12 months – this includes long-term debt. With this rise in debt, the current cash and short-term investment levels stands at €263m to keep the business going. On top of this, RAND has produced €777m in operating cash flow during the same period of time, resulting in an operating cash to total debt ratio of 41%, meaning that RAND’s current level of operating cash is high enough to cover debt.
Looking at RAND’s €5.5b in current liabilities, the company may not be able to easily meet these obligations given the level of current assets of €5.4b, with a current ratio of 0.98x. The current ratio is calculated by dividing current assets by current liabilities.
RAND’s level of debt is appropriate relative to its total equity, at 32%. RAND is not taking on too much debt commitment, which can be restrictive and risky for equity-holders. We can test if RAND’s debt levels are sustainable by measuring interest payments against earnings of a company. Net interest should be covered by earnings before interest and tax (EBIT) by at least three times to be safe. For RAND, the ratio of 48.37x suggests that interest is amply covered. It is considered a responsible and reassuring practice to maintain high interest coverage, which makes RAND and other large-cap investments thought to be safe.
RAND has demonstrated its ability to generate sufficient levels of cash flow, while its debt hovers at an appropriate level. Though its low liquidity raises concerns over whether current asset management practices are properly implemented for the large-cap. Keep in mind I haven't considered other factors such as how RAND has been performing in the past. I recommend you continue to research Randstad to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for RAND’s future growth? Take a look at ourfree research report of analyst consensusfor RAND’s outlook.
2. Valuation: What is RAND 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 RAND 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 Intrinsic Value Of Randstad N.V. (AMS:RAND)
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Today we will run through one way of estimating the intrinsic value of Randstad N.V. (AMS:RAND) by projecting its future cash flows and then discounting them to today's 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.
Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. Anyone interested in learning a bit more about intrinsic value should have a read of theSimply Wall St analysis model.
See our latest analysis for Randstad
We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars:
[{"": "Levered FCF (\u20ac, Millions)", "2019": "\u20ac938.38", "2020": "\u20ac912.30", "2021": "\u20ac906.50", "2022": "\u20ac693.00", "2023": "\u20ac713.00", "2024": "\u20ac663.53", "2025": "\u20ac632.03", "2026": "\u20ac611.74", "2027": "\u20ac598.67", "2028": "\u20ac590.37"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x5", "2020": "Analyst x7", "2021": "Analyst x4", "2022": "Analyst x1", "2023": "Analyst x1", "2024": "Est @ -6.94%", "2025": "Est @ -4.75%", "2026": "Est @ -3.21%", "2027": "Est @ -2.14%", "2028": "Est @ -1.38%"}, {"": "Present Value (\u20ac, Millions) Discounted @ 6.31%", "2019": "\u20ac882.69", "2020": "\u20ac807.24", "2021": "\u20ac754.50", "2022": "\u20ac542.57", "2023": "\u20ac525.10", "2024": "\u20ac459.67", "2025": "\u20ac411.87", "2026": "\u20ac374.99", "2027": "\u20ac345.19", "2028": "\u20ac320.21"}]
Present Value of 10-year Cash Flow (PVCF)= €5.42b
"Est" = FCF growth rate estimated by Simply Wall St
The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 10-year government bond rate of 0.4%. We discount the terminal cash flows to today's value at a cost of equity of 6.3%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = €590m × (1 + 0.4%) ÷ (6.3% – 0.4%) = €10.0b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= €€10.0b ÷ ( 1 + 6.3%)10= €5.41b
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is €10.84b. In the final step we divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of €59.12. Compared to the current share price of €47.78, the company appears about fair value at a 19% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.
The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. 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 Randstad 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 6.3%, which is based on a levered beta of 0.996. 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 Randstad, There are three further factors you should look at:
1. Financial Health: Does RAND 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 RAND'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 RAND? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. Simply Wall St updates its DCF calculation for every NL stock every day, so if you want to find the intrinsic value of any other stock justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Here's Why I Think New Wave Group (STO:NEWA B) Might Deserve Your Attention Today
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It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks with a good story, even if those businesses lose money. And in their study titledWho Falls Prey to the Wolf of Wall Street?'Leuz et. al. found that it is 'quite common' for investors to lose money by buying into 'pump and dump' schemes.
In contrast to all that, I prefer to spend time on companies likeNew Wave Group(STO:NEWA B), which has not only revenues, but also profits. While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.
See our latest analysis for New Wave Group
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. As a tree reaches steadily for the sky, New Wave Group's EPS has grown 37% each year, compound, over three years. As a general rule, we'd say that if a company can keep upthatsort of growth, shareholders will be smiling.
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. New Wave Group maintained stable EBIT margins over the last year, all while growing revenue 16% to kr6.5b. That's a real positive.
You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.
In investing, as in life, the future matters more than the past. So why not check out thisfreeinteractive visualization of New Wave Group'sforecastprofits?
Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
Even though there was some insider selling over the last year, that was outweighed by Founder Torsten Jansson's huge outlay of kr15m, spent buying shares. We should note the average purchase price was around kr48.78. The quantum of that insider purchase is both rare and a sight to behold, not unlike an endangered Amur Leopard in the wild.
The good news, alongside the insider buying, for New Wave Group bulls is that insiders (collectively) have a meaningful investment in the stock. Notably, they have an enormous stake in the company, worth kr1.5b. That equates to 35% of the company, making insiders powerful and aligned with other shareholders. So it might be my imagination, but I do sense the glimmer of an opportunity.
While insiders already own a significant amount of shares, and they have been buying more, the good news for ordinary shareholders does not stop there. The cherry on top is that the CEO, Torsten Jansson is paid comparatively modestly to CEOs at similar sized companies. I discovered that the median total compensation for the CEOs of companies like New Wave Group with market caps between kr1.9b and kr7.4b is about kr4.9m.
The CEO of New Wave Group only received kr1.3m in total compensation for the year ending December 2018. That's clearly well below average, so at a glance, that arrangement seems generous to shareholders, and points to a modest remuneration culture. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, that does support enhanced alignment between the CEO and the ordinary shareholders. It can also be a sign of good governance, more generally.
Given my belief that share price follows earnings per share you can easily imagine how I feel about New Wave Group's strong EPS growth. Better still, insiders own a large chunk of the company and one has even been buying more shares. So it's fair to say I think this stock may well deserve a spot on your watchlist. If you think New Wave Group might suit your style as an investor, you could go straight to its annual report, or you could first checkour discounted cash flow (DCF) valuation for the company.
There are plenty of other companies that have insiders buying up shares. So if you like the sound of New Wave Group, you'll probably love thisfreelist of growing companies that insiders are buying.
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. |
When Should You Buy New Wave Group AB (publ) (STO:NEWA B)?
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! New Wave Group AB (publ) ( STO:NEWA B ), which is in the luxury business, and is based in Sweden, received a lot of attention from a substantial price movement on the OM over the last few months, increasing to SEK69.9 at one point, and dropping to the lows of SEK58.7. 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 New Wave Group's current trading price of SEK63 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 New Wave Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for New Wave Group What is New Wave Group worth? Good news, investors! New Wave Group is still a bargain right now. My valuation model shows that the intrinsic value for the stock is SEK79.2, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because New Wave Group’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity. What does the future of New Wave Group look like? OM:NEWA B Past and Future Earnings, June 28th 2019 Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. New Wave Group’s earnings over the next few years are expected to increase by 26%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value. Story continues What this means for you: Are you a shareholder? Since NEWA B is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation. Are you a potential investor? If you’ve been keeping an eye on NEWA B for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy NEWA B. 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 New Wave Group. You can find everything you need to know about New Wave Group in the latest infographic research report . If you are no longer interested in New Wave Group, you can use our free platform to see my list of over 50 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 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. |
Who won the Democrats' second debate? Our panelists' verdicts
Kate Aronoff: Democrats – and America – need better than Biden Joe Biden has been running for president on the idea that he’s the best equipped to beat Donald Trump. Tonight’s debate shed considerable doubt on that premise. If this is how he performs against his opponents on the same side of the aisle – clinging desperately to the legacy of an administration he didn’t lead – then how do we think he’ll fare against the most talented bully in American politics? Other candidates performed impressively. Bernie Sanders had the clearest ideas on how to improve the lives of people in this country and take on vested interests hoarding wealth and power. But Kamala Harris delivered the night’s and possibly the cycle’s most powerful moment when she challenged Biden on his history of supporting racist policies and politicians. In response, he got as defensive as a grandfather going up against his kids at a Thanksgiving table, taking pains to clarify precisely which type of desegregation he opposed in the 1970s. America deserves better. Kate Aronoff is a writing fellow at In These Times. She covers elections and the politics of climate change Art Cullen: One of the real winners was actually Elizabeth Warren Kamala Harris wowed early when, during shouting chaos among the 10 candidates, she reminded the other candidates that Americans “don’t want a food fight; they want to know how to put food on the table”. She was powerful, precise and put her formidable legal skills to work on camera attacking Joe Biden’s record on race and bussing. Biden worked hard to tie himself to President Obama and aggressively defend his civil rights record, but he struggled under Harris’s withering prosecutor-style cross-examination. One of the debate’s other winners wasn’t even present: Elizabeth Warren – who, along with Harris, has clearly taken Bernie Sanders’ mantle as flag-bearer for the progressive base. Sanders started the revolution, but Warren and Harris seem poised to execute it. Story continues Art Cullen is editor of the Storm Lake Times in Iowa and won the 2017 Pulitzer Prize for Editorial Writing . He is the author of Storm Lake: A Chronicle of Change, Resilience, and Hope Moira Donegan: Harris was the only real standout Related: No country for old white men: Kamala Harris leads changing of the guard At once more scripted, less policy-oriented, and more emptily contentious than Wednesday’s debate, the second Democratic presidential debate was mostly a competition to outshine the current frontrunner, Joe Biden. Kamala Harris succeeded; few of the other candidates managed to convey their message as effectively. Harris emphasized economic justice and conveyed her policy agenda through a series of morally charged anecdotes about struggling families, including her own: she adeptly attacked Biden’s record on race by invoking her own childhood as a beneficiary of school bussing. She also had one of the best sound bites of the night, when the debate devolved into one of several shouting matches: “America does not want to witness a food fight; they want to know how we’re going to put food on the table.” Biden tried to continue coasting on leftover goodwill from his time in the Obama administration, delivering answers thin on details and thick with platitudes. His vague and non-committal description of the country he would build as president seemed to accomplish little aside from reifying the message he gave rich donors at a recent fundraiser: “Nothing would fundamentally change.” Moira Donegan is a Guardian US columnist Malaika Jabali: No one really won In a Democratic debate that was obnoxious, contentious, and spent the first 30 minutes largely setting up socialism and progressive policies – like free healthcare, free education, and taxing the wealthy – as impracticable and not the popular positions that they are, no one really won. Nevertheless, within these confines Kamala Harris succeeded. She was assertive but composed, she forcefully addressed racism, and she pushed Biden on his anti-bussing record. Her prosecutorial record will be scrutinized as the race draws on, but tonight she has much to celebrate. Malaika Jabali is a public policy attorney, writer, and activist whose writing has appeared in Essence, Jacobin, the Intercept, Glamour and elsewhere Geoffrey Kabaservice: Biden was out of step with his own party Kamala Harris was the standout in tonight’s debate, bringing a force, focus, and fire that had been missing since her campaign rollout. Her gains came directly at Joe Biden’s expense and punctured the image he’d cultivated of an above-the-fray front runner. Their viral clash on bussing as a means of achieving racial balance in schools hammered home not only how out of step Biden is with the Democratic left’s evolving stance on identity issues but also his age – since Harris was a schoolchild when Biden was cutting deals with former segregationists. Harris’s victory may be pyrrhic, however, since bussing is an unpopular subject with a long history of widening divisions between Democrats. Geoffrey Kabaservice is the director of political studies at the Niskanen Center in Washington DC as well as the author of Rule and Ruin: The Downfall of Moderation and the Destruction of the Republican Party Doug Pagitt: Harris won the room Three candidates clearly had the energy in the room tonight: Joe Biden, Pete Buttigieg, and Kamala Harris. While the other candidates had their moments, there was no doubt that the applause and focused interest in the room was behind those three. As someone who organizes religious people to vote for Democratic candidates, I found it interesting to hear the enthusiastic and prolonged applause for Pete Buttigieg when he said that the Christian faith calls us to care for kids and not put them in cages and he called out the hypocrisy of the Trump administration. It seemed like an indicator that there is interest and enthusiasm for Democratic candidates who talk about faith. Of all the candidates, Biden issued the most forceful denunciations of Trump, and the crowd ate it up. But by the end of the debate it became clear how much passion there is for Harris. I’m not sure how it came across on television, but to those of us inside the room she projected powerful charisma and confidence. Doug Pagitt is the founding pastor of Solomon’s Porch , a holistic missional Christian community in Minneapolis, Minnesota |
Here’s why HeidelbergCement AG’s (FRA:HEI) Returns On Capital Matters So Much
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Today we'll evaluate HeidelbergCement AG (FRA:HEI) to determine whether it could have potential as an investment idea. 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 up, we'll look at what ROCE is and how we calculate it. 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. 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'.
The formula for calculating the return on capital employed is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
Or for HeidelbergCement:
0.055 = €1.6b ÷ (€36b - €6.3b) (Based on the trailing twelve months to December 2018.)
Therefore,HeidelbergCement has an ROCE of 5.5%.
Check out our latest analysis for HeidelbergCement
When making comparisons between similar businesses, investors may find ROCE useful. Using our data, HeidelbergCement's ROCE appears to be significantly below the 8.7% average in the Basic Materials industry. This performance is not ideal, as it suggests the company may not be deploying its capital as effectively as some competitors. Setting aside the industry comparison for now, HeidelbergCement's ROCE is mediocre in absolute terms, considering the risk of investing in stocks versus the safety of a bank account. Readers may find more attractive investment prospects elsewhere.
The image below shows how HeidelbergCement's ROCE compares to its industry, and you can click it to see more detail on its past growth.
When considering this metric, keep in mind that it is backwards looking, and not necessarily predictive. ROCE can be deceptive for cyclical businesses, as returns can look incredible in boom times, and terribly low in downturns. ROCE is, after all, simply a snap shot of a single year. What happens in the future is pretty important for investors, so we have prepared afreereport on analyst forecasts for HeidelbergCement.
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 counter this, investors can check if a company has high current liabilities relative to total assets.
HeidelbergCement has total liabilities of €6.3b and total assets of €36b. Therefore its current liabilities are equivalent to approximately 18% of its total assets. This is a modest level of current liabilities, which would only have a small effect on ROCE.
That said, HeidelbergCement's ROCE is mediocre, there may be more attractive investments around. 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.
If you like to buy stocks alongside management, then you might just love thisfreelist of companies. (Hint: insiders have been buying them).
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. dominates second quarter global M&A as mega deals roll on
By Greg Roumeliotis and Pamela Barbaglia
NEW YORK/LONDON (Reuters) - Mega deals set the pace for mergers and acquisitions (M&A) globally in the second quarter of 2019, as large U.S. companies defied trade row jitters and seized on strong equity and debt capital markets to agree on transformative combinations.
Global M&A volume reached $842 billion in the second quarter, down 13% and 27% from the first quarter of 2019 and second quarter of 2018 respectively, according to preliminary data from financial data provider Refinitiv.
Geopolitical risks that weighed on dealmakers' confidence, such as the trade dispute between the United States and China and the potential for a military confrontation between the United States and Iran, were partly offset by supportive financing markets that made big acquisitions possible.
This quarter's volume would have been significantly lower were it not for U.S. mega deals, given that total deal count globally fell to its lowest quarterly level since the 2008 financial crisis, Refinitiv data showed.
"The vast majority of transforming deals worth more than $10 billion have taken place in the U.S. This means Europe is lagging behind, and while U.S. companies are doubling in size, their European counterparts risk losing their competitive edge," said JPMorgan Chase & Co <JPM.N> global M&A co-head Hernan Cristerna.
Among the top deals this quarter were the $121 billion agreed merger of United Technologies Corp's airspace division with U.S. contractor Raytheon Co <RTN.N>, U.S. drugmaker AbbVie Inc's <ABBV.N> $63 billion agreement to acquire peer Allergan Plc <AGN.N>, and Occidental Petroleum Corp's <OXY.N> $38 billion deal to buy Anadarko Petroleum Corp <APC.N>.
U.S. M&A totaled $466 billion in the second quarter, down just 3% from a year ago. Dealmaking in Europe, however, plunged 54% to $152 billion, while Asia M&A dived 49% to $132 billion.
Some attempts at big European mergers, such as a tie-up of auto makers Fiat Chrysler Automobiles BV <FCHA.MI> and Renault SA <RENA.PA>, as well as of Deutsche Bank AG <DBKGn.DE> and Commerzbank AG <CBKG.DE>, failed amid political resistance and concerns over regulatory scrutiny.
"Every quarter that goes by without progress in combining European companies and helping them adjust to technological and geopolitical disruption means there will be pent-up supply and demand for deals down the line to achieve that adjustment," said Perella Weinberg Partners LP founding partner Paulo Pereira.
Cross-border M&A also suffered because of the trade jitters. It has been over 400 days since a cross-border deal of more than $20 billion has been announced, said Citigroup Inc <C.N> global M&A co-head Cary Kochman.
"The ease with which corporates approached globalsation has waned. In its place are regional models and the realignment of domestic supply chains," said Kochman.
Dealmaking by private equity firms soared to $136 billion, almost an all-time high, as cheap debt fueled leveraged buyouts.
Some dealmakers now say they see confidence in smaller companies to explore M&A following the wave of mega deals, which may lead to a bump in the number of transactions.
"What we have seen so far this year is a steady number of mega deals, and all signs suggest this will continue," said Morgan Stanley <MS.N> Americas head of M&A Tom Miles.
"But what is also beginning to happen is that smaller and mid-sized companies, that were nervous about pursuing deals early in the year, are now feeling comfortable enough with the economic environment to also explore M&A," Miles added.
(Reporting by Greg Roumeliotis in New York and Pamela Barbaglia in London, Editing by Sherry Jacob-Phillips) |
Should You Be Holding HeidelbergCement AG (FRA:HEI)?
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HeidelbergCement AG (FRA:HEI) 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 HEI, it is a well-regarded dividend-paying company that has been a rockstar for income investors, currently trading at an attractive share price. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the fullreport on HeidelbergCement here.
HEI's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. Investors have the opportunity to buy into the stock to reap capital gains, if HEI's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the basic materials industry, HEI is also trading below its peers, relative to earnings generated. This further reaffirms that HEI is potentially undervalued.
HEI is also a dividend company, with ample net income to cover its dividend payout, which has been consistently growing over the past decade, keeping income investors happy.
For HeidelbergCement, there are three essential aspects you should look at:
1. Future Outlook: What are well-informed industry analysts predicting for HEI’s future growth? Take a look at ourfree research report of analyst consensusfor HEI’s outlook.
2. Historical Performance: What has HEI's returns been like over the past? Go into more detail in the past track record analysis and take a look atthe free visual representations of our analysisfor more clarity.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of HEI? Exploreour interactive list of stocks with large potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Should Akzo Nobel N.V. (AMS:AKZA) Be Part Of Your Income Portfolio?
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Could Akzo Nobel N.V. (AMS:AKZA) 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.
A 2.8% yield is nothing to get excited about, but investors probably think the long payment history suggests Akzo Nobel has some staying power. The company also bought back stock during the year, equivalent to approximately 14% of the company's market capitalisation at the time. Some simple research can reduce the risk of buying Akzo Nobel for its dividend - read on to learn more.
Explore this interactive chart for our latest analysis on Akzo Nobel!
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. So we need to form a view on if a company's dividend is sustainable, relative to its net profit after tax. Akzo Nobel paid out 119% of its profit as dividends, over the trailing twelve month period. Unless there are extenuating circumstances, from the perspective of an investor who hopes to own the company for many years, a payout ratio of above 100% is definitely a concern.
In addition to comparing dividends against profits, we should inspect whether the company generated enough cash to pay its dividend. Akzo Nobel paid out 575% of its free cash flow last year, which we think is concerning if cash flows do not improve. Paying out such a high percentage of cash flow suggests that the dividend was funded from either cash at bank or by borrowing, neither of which is desirable over the long term. Cash is slightly more important than profit from a dividend perspective, but given Akzo Nobel's payouts were not well covered by either earnings or cash flow, we would definitely be concerned about the sustainability of this dividend.
Consider gettingour latest analysis on Akzo Nobel's financial position 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. For the purpose of this article, we only scrutinise the last decade of Akzo Nobel's dividend payments. Its dividend payments have fallen by 20% or more on at least one occasion over the past ten years. During the past ten-year period, the first annual payment was €2.03 in 2009, compared to €2.31 last year. Dividends per share have grown at approximately 1.3% per year over this time. The dividends haven't grown at precisely 1.3% every year, but this is a useful way to average out the historical rate of growth.
It's good to see some dividend growth, but the dividend has been cut at least once, and the size of the cut would eliminate most of the growth, anyway. We're not that enthused by this.
With a relatively unstable dividend, it's even more important to see if earnings per share (EPS) are growing. Why take the risk of a dividend getting cut, unless there's a good chance of bigger dividends in future? Over the past five years, it looks as though Akzo Nobel's EPS have declined at around 11% a year. If earnings continue to decline, the dividend may come under pressure. Every investor should make an assessment of whether the company is taking steps to stabilise the situation.
To summarise, shareholders should always check that Akzo Nobel's dividends are affordable, that its dividend payments are relatively stable, and that it has decent prospects for growing its earnings and dividend. Akzo Nobel paid out almost all of its cash flow and profit as dividends, leaving little to reinvest in the business. Second, earnings per share have been in decline, and its dividend has been cut at least once in the past. In this analysis, Akzo Nobel doesn't shape up too well as a dividend stock. We'd find it hard to look past the flaws, and would not be inclined to think of it as a reliable dividend-payer.
Without at least some growth in earnings per share over time, the dividend will eventually come under pressure either from costs or inflation. Businesses can change though, and we think it would make sense to see whatanalysts are forecasting 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. |
Akzo Nobel N.V. (AMS:AKZA): Does The Earnings Decline Make It An Underperformer?
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Investors with a long-term horizong may find it valuable to assess Akzo Nobel N.V.'s (AMS:AKZA) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how Akzo Nobel is currently performing.
View our latest analysis for Akzo Nobel
AKZA's trailing twelve-month earnings (from 31 March 2019) of €354m 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 -14%, indicating the rate at which AKZA is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s transpiring with margins and whether the rest of the industry is experiencing the hit as well.
In terms of returns from investment, Akzo Nobel has fallen short of achieving a 20% return on equity (ROE), recording 4.5% instead. Furthermore, its return on assets (ROA) of 2.7% is below the NL Chemicals industry of 6.1%, indicating Akzo Nobel's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Akzo Nobel’s debt level, has declined over the past 3 years from 14% to 5.1%.
Though Akzo Nobel's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have unpredictable earnings, can have many factors influencing its business. I recommend you continue to research Akzo Nobel to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for AKZA’s future growth? Take a look at ourfree research report of analyst consensusfor AKZA’s outlook.
2. Financial Health: Are AKZA’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. |
Exclusive: Morgan Stanley likely to gain majority control of China securities JV in second half - sources
By Kane Wu and Sumeet Chatterjee
HONG KONG (Reuters) - Morgan Stanley is likely to get regulatory approval for owning a majority stake in its Chinese securities joint venture in the second half of this year, people with direct knowledge of the matter told Reuters.
The U.S. investment bank's joint venture informed the China Securities Regulatory Commission (CSRC) a couple of months ago about plans to changes in equity holding, subject to regulatory approval, the people said.
Morgan Stanley is seeking to raise its holding in the venture with Chinese partner Huaxin Securities to 51% from 49%. The venture's offerings includes underwriting and sponsoring of stock and bond sales.
The approval is likely to come in the second half of the year, the people said, with one saying it is likely to be as soon as the fourth quarter.
The timeline for possible approval to ownership changes in the joint venture has not been reported before.
When approved, Morgan Stanley will join rivals HSBC Holdings PLC, JPMorgan Chase & Co, Nomura Holdings Inc and UBS Group AG in owning controlling stakes in onshore securities joint ventures in China under liberalised rules announced in November 2017.
The move by Morgan Stanley comes even as the United States and China have waged a year-long trade war marked by tit-for-tat import tariffs on each other's goods. The likely approval, however, will be another indication that China is nevertheless pushing ahead with its agenda to open up its financial sector, after JPMorgan's approval in March.
China has in recent months allowed many foreign financial firms to either set up new businesses onshore or expand their presence through majority ownership in domestic joint ventures across mutual funds, insurance and brokerage businesses.
Earlier in June, Morgan Stanley Chief Executive James Gorman said he wanted majority ownership of a joint venture in China, but that regulators has not signed off on the idea. Morgan Stanley also has a fund management joint venture in the country. Gorman did not identify which venture he was referring to.
Morgan Stanley's senior Hong Kong bankers in recent months have been working on integrating its operations with the joint venture's, another person said. Those efforts are progressing "at full speed", the person said.
The outcome of Sino-U.S. talks to reach a trade deal could, however, impact the approval timeline, said the people, who declined to be identified as they were not authorized to discuss regulatory matters with media.
A spokeswoman for Morgan Stanley in Hong Kong declined to comment. The CSRC has not responded to a Reuters request for comment.
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Shanghai Fortune, the parent of Huaxin, said in a June 13 regulatory filing that it planned to divest of a 2% stake in Morgan Stanley Huaxin Securities through a bidding process for no less than 376.2 million yuan ($54.72 million).
The firm did not disclose possible bidders, but such a process is usually a means of transferring additional shares to an existing joint venture partner. After winning the auction, the bidder would still need regulatory approval.
Morgan Stanley raised its stake in the venture to 49% from 33.3% in 2017, betting on strong deals momentum. Before easing ownership rules in late 2017, China allowed foreigners to own a maximum 49% in such ventures.
That lack of control and limited contribution to revenue have long been a source of frustration for Wall Street banks, and became a key issue in Washington's push to persuade Beijing to open up its market for wider foreign participation.
The lifting of the cap on foreign stakes to 51% has allowed Western banks to buy more shares from their partners in existing joint ventures or enter into new partnerships.
JPMorgan and Nomura became the latest to win regulatory approval to set up majority-owned brokerage joint ventures in March this year. UBS received approval in November to hold a majority stake in its existing joint venture.
Management control would allow foreign banks including Morgan Stanley to offer more services through their joint ventures and potentially leverage their global networks to win China market share, bankers have previously said.
($1 = 6.8749 Chinese yuan renminbi)
(Reporting by Kane Wu and Sumeet Chatterjee; Additional reporting by Julie Zhu and Felix Tam; Editing by Christopher Cushing) |
The Elekta (STO:EKTA B) Share Price Is Up 95% And Shareholders Are Holding On
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By buying an index fund, you can roughly match the market return with ease. But if you buy good businesses at attractive prices, your portfolio returns could exceed the average market return. For example, theElekta AB (publ)(STO:EKTA B) share price is up 95% in the last three years, clearly besting than the market return of around 19% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 17% in the last year, including dividends.
View our latest analysis for Elekta
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During three years of share price growth, Elekta achieved compound earnings per share growth of 106% per year. This EPS growth is higher than the 25% average annual increase in the share price. So one could reasonably conclude that the market has cooled on the stock.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
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. It might be well worthwhile taking a look at ourfreereport on Elekta's earnings, revenue and cash flow.
When looking at investment returns, it is important to consider the difference betweentotal shareholder return(TSR) andshare price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Elekta, it has a TSR of 101% for the last 3 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!
It's nice to see that Elekta shareholders have received a total shareholder return of 17% over the last year. Of course, that includes the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 10% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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.
Elekta 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 SE exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
How Financially Strong Is National Express Group PLC (LON:NEX)?
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Investors are always looking for growth in small-cap stocks like National Express Group PLC (LON:NEX), with a market cap of UK£2.0b. However, an important fact which most ignore is: how financially healthy is the business? Assessing first and foremost the financial health is vital, as mismanagement of capital can lead to 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, this is not a comprehensive overview, so I’d encourage you todig deeper yourself into NEX here.
NEX's debt levels have fallen from UK£1.2b to UK£1.1b over the last 12 months – this includes long-term debt. With this reduction in debt, NEX's cash and short-term investments stands at UK£121m , ready to be used for running the business. On top of this, NEX has generated UK£307m in operating cash flow in the last twelve months, resulting in an operating cash to total debt ratio of 27%, signalling that NEX’s operating cash is sufficient to cover its debt.
With current liabilities at UK£1.0b, it appears that the company may not have an easy time meeting these commitments with a current assets level of UK£585m, leading to a current ratio of 0.57x. The current ratio is calculated by dividing current assets by current liabilities.
With a debt-to-equity ratio of 95%, NEX can be considered as an above-average leveraged company. This is somewhat unusual for small-caps companies, since lenders are often hesitant to provide attractive interest rates to less-established businesses. We can test if NEX’s debt levels are sustainable by measuring interest payments against earnings of a company. Ideally, earnings before interest and tax (EBIT) should cover net interest by at least three times. For NEX, the ratio of 5.07x suggests that interest is appropriately covered, which means that lenders may be inclined to lend more money to the company, as it is seen as safe in terms of payback.
Although NEX’s debt level is towards the higher end of the spectrum, its cash flow coverage seems adequate to meet debt obligations which means its debt is being efficiently utilised. However, its low liquidity raises concerns over whether current asset management practices are properly implemented for the small-cap. I admit this is a fairly basic analysis for NEX's financial health. Other important fundamentals need to be considered alongside. You should continue to research National Express Group to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for NEX’s future growth? Take a look at ourfree research report of analyst consensusfor NEX’s outlook.
2. Valuation: What is NEX 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 NEX 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. |
If You Had Bought Manutan International (EPA:MAN) Shares Five Years Ago You'd Have Made 50%
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Generally speaking the aim of active stock picking is to find companies that provide returns that are superior to the market average. And in our experience, buying the right stocks can give your wealth a significant boost. For example, long termManutan International SA(EPA:MAN) shareholders have enjoyed a 50% share price rise over the last half decade, well in excess of the market return of around 31% (not including dividends).
View our latest analysis for Manutan International
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.
Over half a decade, Manutan International managed to grow its earnings per share at 12% a year. This EPS growth is higher than the 8.5% average annual increase in the share price. Therefore, it seems the market has become relatively pessimistic about the company.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
Thisfreeinteractive report on Manutan International'searnings, revenue and cash flowis a great place to start, if you want to investigate the stock further.
When looking at investment returns, it is important to consider the difference betweentotal shareholder return(TSR) andshare price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Manutan International the TSR over the last 5 years was 69%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
Manutan International shareholders are down 5.1% for the year (even including dividends), but the market itself is up 6.7%. 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. Longer term investors wouldn't be so upset, since they would have made 11%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Is Manutan International cheap compared to other companies? These3 valuation measuresmight help you decide.
We will like Manutan International 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 FR exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Nissan ex-chief Ghosn cancels hastily arranged Tokyo press conference
TOKYO (Reuters) - Former Nissan boss Carlos Ghosn abruptly canceled plans on Friday for what would have been his first press conference since his arrest in November, after his daughters expressed concern it could invite retaliation by Japanese authorities, his lawyers said.
"In Japan we just don't know what terrible thing will happen next, not just limited to rearrest," one of his lawyers, Junichiro Hironaka, told reporters outside his office.
The lawyer said consequences could also include loss of bail, but did not give further details. The Japanese government's chief spokesman Yoshihide Suga has said that Ghosn is being treated in accordance with Japanese law.
Hironaka canceled the briefing at the Foreign Correspondents' Club of Japan (FCCJ) only two hours after journalists were informed of the event.
Had it gone ahead, Ghosn would have spoken as Japanese Prime Minister Shinzo Abe hosted national leaders at the G20 leaders gathering in Osaka, including U.S. President Donald Trump and French President Emmanuel Macron.
Ghosn's wife Carole has called on Macron to raise the issue of her husband's treatment in Japan.
Japanese courts have dismissed appeals by Ghosn to ease a bail restriction that bans him from contacting his wife. His lawyers have argued that that condition violates Japan's constitution and international law on family separations.
Hironaka said the decision to hold the press conference on Friday came after Ghosn's latest attempt to seek court permission for a one-off meeting with his wife failed, and was unrelated to the timing of the G20.
Ghosn's legal team have nonetheless taken note of the leaders' gathering.
Another of his lawyers, Takashi Takano, penned a statement on Tuesday that criticized Abe for promoting Japanese openness when it "fiercely guarded its private commercial entities, even through use of basic sovereign powers, including criminal investigation and penal sanction".
Once among the world's most feted auto executives, Ghosn is awaiting trial in Japan over charges including enriching himself at a cost of $5 million to Nissan.
Ghosn has denied any wrongdoing, saying he is the victim of a boardroom coup.
He has accused "backstabbing" former colleagues of conspiring to oust him from Nissan in order to derail a closer alliance between the Japanese automaker and Renault, its top shareholder.
The scandal has rocked the industry and exposed tensions in the automaking partnership between Nissan and Renault SA <RENA.PA>.
Since his initial arrest in November last year, Ghosn has been charged four times for crimes which also include underreporting his Nissan salary and temporarily transferring personal financial losses to his employer's books during his time at the helm of Japan's No. 2 automaker.
(Reporting by Tim Kelly; Editing by Muralikumar Anantharaman) |
Is Manutan International SA (EPA:MAN) A Smart Pick For Income Investors?
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Could Manutan International SA (EPA:MAN) 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. 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.
While Manutan International's 2.4% dividend yield is not the highest, we think its lengthy payment history is quite interesting. 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 Manutan International!
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Comparing dividend payments to a company's net profit after tax is a simple way of reality-checking whether a dividend is sustainable. In the last year, Manutan International paid out 30% of its profit as dividends. This is medium payout level that leaves enough capital in the business to fund opportunities that might arise, while also rewarding shareholders. Besides, if reinvestment opportunities dry up, the company has room to increase the dividend.
Another important check we do is to see if the free cash flow generated is sufficient to pay the dividend. Manutan International paid out 103% of its free cash last year. Cash flows can be lumpy, but this dividend was not well covered by cash flow. Manutan International paid out less in dividends than it reported in profits, but unfortunately it didn't generate enough free cash flow to cover the dividend. Were it to repeatedly pay dividends that were not well covered by cash flow, this could be a risk to Manutan International's ability to maintain its dividend.
Remember, you can always get a snapshot of Manutan International'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. Manutan International has been paying dividends for a long time, but for the purpose of this analysis, we only examine the past 10 years of payments. The dividend has been cut by more than 20% on at least one occasion historically. During the past ten-year period, the first annual payment was €1.52 in 2009, compared to €1.65 last year. Its dividends have grown at less than 1% per annum over this time frame.
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. It's good to see Manutan International has been growing its earnings per share at 12% 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.
To summarise, shareholders should always check that Manutan International'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 like Manutan International's low dividend payout ratio, although we're a bit concerned that it paid out a substantially higher percentage of its free cash flow. 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, Manutan International 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.
Earnings growth generally bodes well for the future value of company dividend payments. See if the 3 Manutan International analysts we track are forecasting continued growth with ourfreereport on analyst estimates 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. |
Does TKH Group N.V.'s (AMS:TWEKA) Recent Track Record Look Strong?
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After looking at TKH Group N.V.'s (AMS:TWEKA) latest earnings announcement (31 December 2018), I found it useful to revisit the company's performance in the past couple of years and assess this against the most recent figures. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways.
Check out our latest analysis for TKH Group
TWEKA's trailing twelve-month earnings (from 31 December 2018) of €109m has jumped 26% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 12%, indicating the rate at which TWEKA is growing has accelerated. What's the driver of this growth? Let's see if it is solely due to an industry uplift, or if TKH Group has experienced some company-specific growth.
In terms of returns from investment, TKH Group has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. However, its return on assets (ROA) of 7.5% exceeds the NL Electrical industry of 5.3%, indicating TKH Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for TKH Group’s debt level, has increased over the past 3 years from 14% to 15%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 64% to 63% over the past 5 years.
Though TKH Group's past data is helpful, it is only one aspect of my investment thesis. While TKH Group has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. You should continue to research TKH Group to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for TWEKA’s future growth? Take a look at ourfree research report of analyst consensusfor TWEKA’s outlook.
2. Financial Health: Are TWEKA’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 December 2018. 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. |
Japan May factory output surprisingly strong, but trade risks linger
By Daniel Leussink and Kaori Kaneko
TOKYO (Reuters) - Japan's industrial output rose at the fastest pace in more than a year in May on the back of higher car production, suggesting that growth is holding up despite fears manufacturers remain pressured by the U.S.-China trade war.
However, economists said the long-term outlook for Japan's factory output was less rosy, as the May increase likely stemmed from a rise in car production before a sales tax hike expected in October.
Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute, said "expected rush-demand" for cars before the tax is scheduled to rise to 10% from 8% contributed to the solid May output.
Still, recent economic figures such as exports "are weak and we can't be optimistic about the outlook given the slowdown in the global economy and demand for IT-related products," he said.
Industrial production jumped 2.3% from April, the fastest month-on-month pace since February 2018. May's median market forecast was 0.7%, after April saw a 0.6% rise.
The May data showed that higher production of car parts and machines used to make flat panel displays helped offset a decline for airplane parts.
Lifting car production was the launch of new models, a trade ministry official told reporters.
Manufacturers surveyed by the Ministry of Economy, Trade and Industry expect output to fall 1.2% in June but increase 0.3% in July.
"Capital goods shipments climbed to a seven-month high which suggests that business investment continued to expand in the second quarter," said Marcel Thieliant, senior Japan economist at Capital Economics.
Friday's data batch follows a set of tepid indicators in recent weeks, including exports - which fell for a sixth month in May - and a manufacturing activity gauge, suggesting the economy is feeling increased pain from slower global growth. [nL4N23O23A] [nS7N1VL00W]
The standoff between Washington and Beijing - front and centre at the just-starting Group of 20 summit in Osaka - has weighed on Chinese growth. That, in turn, hurts Japan because many of its producers rely on selling heavy machinery and electronic parts to Chinese factories.
In another source of concern, Japan's inventories rose 0.6% in May from the previous month, with its index hitting 104.4 on a seasonally-adjusted basis, the highest since comparable data became available in 2013.
MORE BOJ STIMULUS?
The latest data comes as the Bank of Japan (BOJ) is considering ramping up stimulus as trade and growth risks cloud the outlook for the export-reliant economy.
BOJ Deputy Governor Masazumi Wakatabe said on Thursday the central bank stands ready to ease monetary policy pre-emptively to fend off risks that could derail the economy's path toward achieving its 2% inflation target. [nL4N23Y0RN]
The BOJ kept monetary policy steady last week.
The central bank's closely-watched "tankan" survey, due on Monday, is expected to show big manufacturers' sentiment worsened to nearly three-year lows in the June quarter, in the wake of slowing demand at home and abroad. [nL4N23S070]
Separate data on Friday showed Tokyo's core consumer prices (CPI) index, which includes oil products but excludes fresh food prices, rose 0.9% in June from a year earlier, compared with a 1.1% increase in May.
The jobless rate stood steady at 2.4% in May, while the availability of jobs slipped, government data showed.
The jobs-to-applicants ratio fell to 1.62 in May, slightly down from April and the median estimate of 1.63.
(Reporting by Daniel Leussink & Kaori Kaneko; Editing by Richard Borsuk) |
Is Now The Time To Look At Buying TKH Group N.V. (AMS:TWEKA)?
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TKH Group N.V. (AMS:TWEKA), which is in the electrical business, and is based in Netherlands, saw a significant share price rise of over 20% in the past couple of months on the ENXTAM. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine TKH Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Check out our latest analysis for TKH Group
Good news, investors! TKH Group is still a bargain right now. According to my valuation, the intrinsic value for the stock is €68.84, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that TKH Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
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. With profit expected to grow by 47% over the next couple of years, the future seems bright for TKH Group. 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?Since TWEKA is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor?If you’ve been keeping an eye on TWEKA for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy TWEKA. 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 TKH Group. You can find everything you need to know about TKH Group inthe latest infographic research report. If you are no longer interested in TKH Group, 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. |
Is Bucher Industries AG (VTX:BUCN) Expensive For A Reason? A Look At Its Intrinsic Value
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How far off is Bucher Industries AG (VTX:BUCN) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by estimating the company's future cash flows and discounting them to their present value. 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.
Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
Check out our latest analysis for Bucher Industries
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.
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 (CHF, Millions)", "2019": "CHF181.10", "2020": "CHF190.63", "2021": "CHF197.00", "2022": "CHF203.47", "2023": "CHF210.14", "2024": "CHF217.03", "2025": "CHF224.15", "2026": "CHF231.49", "2027": "CHF239.08", "2028": "CHF246.91"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x5", "2020": "Analyst x3", "2021": "Analyst x2", "2022": "Est @ 3.28%", "2023": "Est @ 3.28%", "2024": "Est @ 3.28%", "2025": "Est @ 3.28%", "2026": "Est @ 3.28%", "2027": "Est @ 3.28%", "2028": "Est @ 3.28%"}, {"": "Present Value (CHF, Millions) Discounted @ 9.79%", "2019": "CHF164.95", "2020": "CHF158.15", "2021": "CHF148.86", "2022": "CHF140.04", "2023": "CHF131.74", "2024": "CHF123.93", "2025": "CHF116.58", "2026": "CHF109.66", "2027": "CHF103.15", "2028": "CHF97.03"}]
Present Value of 10-year Cash Flow (PVCF)= CHF1.29b
"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 3.3%. We discount the terminal cash flows to today's value at a cost of equity of 9.8%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = CHF247m × (1 + 3.3%) ÷ (9.8% – 3.3%) = CHF3.9b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= CHFCHF3.9b ÷ ( 1 + 9.8%)10= CHF1.54b
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is CHF2.83b. The last step is to then divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of CHF277.35. Relative to the current share price of CHF333.8, the company appears slightly overvalued 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.
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 Bucher Industries as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 9.8%, which is based on a levered beta of 1.093. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. What is the reason for the share price to differ from the intrinsic value? For Bucher Industries, I've put together three essential factors you should further research:
1. Financial Health: Does BUCN 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 BUCN'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 BUCN? 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 CH stock every day, so if you want to find the intrinsic value of any other stock justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Is Bucher Industries AG (VTX:BUCN) Expensive For A Reason? A Look At Its Intrinsic Value
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Today we will run through one way of estimating the intrinsic value of Bucher Industries AG (VTX:BUCN) 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.
See our latest analysis for Bucher Industries
We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To 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.
Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value:
[{"": "Levered FCF (CHF, Millions)", "2019": "CHF181.10", "2020": "CHF190.63", "2021": "CHF197.00", "2022": "CHF203.47", "2023": "CHF210.14", "2024": "CHF217.03", "2025": "CHF224.15", "2026": "CHF231.49", "2027": "CHF239.08", "2028": "CHF246.91"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x5", "2020": "Analyst x3", "2021": "Analyst x2", "2022": "Est @ 3.28%", "2023": "Est @ 3.28%", "2024": "Est @ 3.28%", "2025": "Est @ 3.28%", "2026": "Est @ 3.28%", "2027": "Est @ 3.28%", "2028": "Est @ 3.28%"}, {"": "Present Value (CHF, Millions) Discounted @ 9.79%", "2019": "CHF164.95", "2020": "CHF158.15", "2021": "CHF148.86", "2022": "CHF140.04", "2023": "CHF131.74", "2024": "CHF123.93", "2025": "CHF116.58", "2026": "CHF109.66", "2027": "CHF103.15", "2028": "CHF97.03"}]
Present Value of 10-year Cash Flow (PVCF)= CHF1.29b
"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 3.3%. We discount the terminal cash flows to today's value at a cost of equity of 9.8%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = CHF247m × (1 + 3.3%) ÷ (9.8% – 3.3%) = CHF3.9b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= CHFCHF3.9b ÷ ( 1 + 9.8%)10= CHF1.54b
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is CHF2.83b. In the final step we divide the equity value by the number of shares outstanding.This results in an intrinsic value estimate of CHF277.35. Compared to the current share price of CHF333.8, the company appears slightly overvalued at the time of writing. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.
We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Bucher Industries as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 9.8%, which is based on a levered beta of 1.093. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. What is the reason for the share price to differ from the intrinsic value? For Bucher Industries, I've put together three further aspects you should further examine:
1. Financial Health: Does BUCN 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 BUCN'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 BUCN? 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 CH 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. |
Are You An Income Investor? Don't Miss Out On Devoteam SA (EPA:DVT)
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Could Devoteam SA (EPA:DVT) 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 your dividends, it's important to be more stringent with your investments than the average punter. Regular readers know we like to apply the same approach to each dividend stock, and we hope you'll find our analysis useful.
A slim 1.0% yield is hard to get excited about, but the long payment history is respectable. At the right price, or with strong growth opportunities, Devoteam could have potential. 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. So we need to form a view on if a company's dividend is sustainable, relative to its net profit after tax. Looking at the data, we can see that 21% of Devoteam's profits were paid out as dividends in the last 12 months. With a low payout ratio, it looks like the dividend is comprehensively covered by earnings.
Another important check we do is to see if the free cash flow generated is sufficient to pay the dividend. Devoteam's cash payout ratio last year was 17%. Cash flows are typically lumpy, but this looks like an appropriately conservative payout. 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.
We update our data on Devoteam 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. For the purpose of this article, we only scrutinise the last decade of Devoteam's dividend payments. This dividend has been unstable, which we define as having fallen by at least 20% one or more times over this time. During the past ten-year period, the first annual payment was €0.30 in 2009, compared to €1.00 last year. This works out to be a compound annual growth rate (CAGR) of approximately 13% a year over that time. The dividends haven't grown at precisely 13% every year, but this is a useful way to average out the historical rate of growth.
Devoteam has grown distributions at a rapid rate despite cutting the dividend at least once in the past. Companies that cut once often cut again, but it might be worth considering if the business has turned a corner.
With a relatively unstable dividend, it's even more important to evaluate if earnings per share (EPS) are growing - it's not worth taking the risk on a dividend getting cut, unless you might be rewarded with larger dividends in 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 Devoteam has grown its earnings per share at 52% per annum over the past five 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.
To summarise, shareholders should always check that Devoteam's dividends are affordable, that its dividend payments are relatively stable, and that it has decent prospects for growing its earnings and dividend. It's great to see that Devoteam is paying out a low percentage of its earnings and cash flow. 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. Devoteam performs highly under this analysis, although it falls slightly short of our exacting standards. At the right valuation, it could be a solid dividend prospect.
Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 4 analysts we track are forecasting for Devoteamfor freewith publicanalyst estimates 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. |
What Was Marianne Williamson On During The Democratic Debate?
"You have harnessed fear for political purposes, and only love can cast that out." -- Marianne Williamson to President Donald Trump (Photo: SAUL LOEB via Getty Images) It was a crowded stage at Thursday night’s Democratic debate, and the 10 candidates did what they could to stand out. Sen. Kamala Harris (Calif.) electrified the night by going after former Vice President Joe Biden ’s record on busing and working with segregationists. South Bend, Indiana, Mayor Pete Buttigieg carefully fielded questions about police accountability and racism in his hometown. And then there was Marianne Williamson . Stationed at the far end of the stage, Williamson, an author and activist, didn’t make a peep for the first 15 minutes as everyone else climbed over each other to get on camera. When she was finally asked about her plan for lowering the cost of prescription drugs, her answer was... unexpected. “I’ll tell you one thing, it’s really nice if we’ve got all these plans,” Williamson began, speaking in her unusual Mid-Atlantic accent. “But if you think we’re going to beat Donald Trump by just having all these plans, you’ve got another thing coming. Because he didn’t win by saying he had a plan. He won by simply saying, ‘Make America great again.’” What? Having actual policy ideas matters less than #MAGA? “We’ve got to get deeper than just these superficial fixes,” she continued, referring to Democrats’ fleshed-out policies on immigration, health care, education, student loans and whatever else you can think of. The moderators moved on. They asked the panel what would be your priority issue as president? Gun violence, said Rep. Eric Swalwell (Calif.). Climate change, said Sen. Michael Bennet (Colo.). A family bill of rights, said Sen. Kirsten Gillibrand (N.Y.). “My first call is to the prime minister of New Zealand, who said that her goal is to make New Zealand the place where it’s the best place in the world for a child to grow up,” said Williamson. “I would tell her, ‘Girlfriend, you are so on!’” Uh. What about the first international relationship you’d like to reset as president? “One of my first phone calls would be to call the European leaders and say, ‘We’re baaaack!’” said Williamson. It’s not that Williamson didn’t make any substantive points as the two hours rolled on. She accused the Trump administration of child abuse for ripping migrant kids from their parents at the border and loading them into unsanitary detention facilities. Trump is attacking “America’s moral core” with his immigration policies, she said. “We open our hearts to the stranger.” And it’s not that emailing reporters a video of yourself dancing to “Runaround Sue” with a guy in a cowboy hat and urging them to “JUST DANCE,” hours before going on national television as a presidential candidate, is completely off the wall. Neither is emailing reporters to recommend that they de-stress from the debates not by drinking vodka but by doing yoga poses. Story continues “Instead of downing a shot, do a downward dog,” reads the campaign email . “Every time someone talks about the green new deal, strike an eagle pose.” (Eagle pose looks hard !) The question, though, is what the hell is Williamson on? She is living her best life in front of all of us on a national stage, and since her moment may not last much longer, whatever she’s got, we’d like some of it. “Mr. President, if you’re listening, I want you to hear me, please,” Williamson said in her closing remarks in the debate. “You have harnessed fear for political purposes, and only love can cast that out. So I, sir, I have a feeling you know what you’re doing. I’m going to harness love for political purposes. I will meet you on that field. And, sir, love will win.” I’ll meet you on that field, Marianne. We can share the goods there. Related Coverage Kamala Harris Takes Center Stage At Chaotic Democratic Debate Marianne Williamson's Bonkers Debate Performance Lights Up Twitter Harris vs. Biden, And 4 Other Takeaways From Day 2 Of The Democratic Debate Also on HuffPost Love HuffPost? Become a founding member of HuffPost Plus today. This article originally appeared on HuffPost . View comments |
Most Asian currencies edge up, baht is best quarterly performer
By Ambar Warrick
(Reuters) - Most emerging Asian currencies inched up on Friday on hopes the meeting of the presidents of China and the United States will increase risk appetites, but many traders remained cautious.
The majority of regional units were set for meagre gains in the second quarter, which has seen sharp changes in appetites, hinged on developments in the Sino-U.S. trade war and broad moves toward monetary policy easing.
There's intense interest in Saturday's meeting between U.S. President Donald Trump and Chinese President Xi Jinping for indications on whether the global economic outlook will brighten or darken.
Vishnu Varathan, senior economist at Mizuho Bank, has hopes of some upside for Asian currencies after the Osaka summit.
"To be sure, we are neither complacent about, nor comfortable with, latent downside risks to Asia/EM FX. But underlying risks to Asia FX are at least temporarily relegated to the back seat," he said in a note.
He added that Asia FX may also be poised for some relief from lower U.S. treasury yields "inspired by ultra-dovish Fed expectations."
The Thai baht, slated to be the best quarterly performer among Asian peers, strengthened slightly on Friday.
Thailand's relative economic stability through the quarter, as well the Bank of Thailand's reluctance to ease policy, has buoyed the baht, which has strengthened nearly 6 percent against the dollar this year.
Investors were awaiting May trade data later in the day from the Thai central bank, which on Wednesday cut its forecast for economic growth and predicted there will be no increase in exports this year.
The yuan inched up on a marginally firmer midpoint fix from the People's Bank of China. Its stronger daily fixings help keep the currency from breaching the 7-to-the-dollar point.
Chinese manufacturing data for June is expected on the weekend, and will provide further clues on the effects of an extended trade war on the world's second largest economy.
A Reuters poll expects a contraction due to weaker demand.
The Philippine peso weakened 0.18% for the day, while the Indian rupee strengthened a little.
QUARTERLY MOVERS AND SHAKERS
The Thai baht was set to gain around 3% for the April-June quarter while the yuan was set to lose more than 2% and be the worst quarterly performer.
The Philippine peso was on track to gain about 2.8% for the quarter, with healthy inflation in the country providing some support. The country's central bank held its benchmark interest rate earlier in June.
The South Korean won and the Taiwan dollar were set to lose about 2% and 0.7%, respectively, for the quarter, as ructions in the global technology sector pointed to further pressure on the tech-oriented economies of the two.
The two currencies are the worst performers in 2019, among their peers.
(Reporting by Ambar Warrick in Bengaluru; Editing by Richard Borsuk) |
I Ran A Stock Scan For Earnings Growth And Devoteam (EPA:DVT) Passed With Ease
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For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it completely lacks a track record of revenue and profit. But as Peter Lynch said inOne Up On Wall Street, 'Long shots almost never pay off.'
In contrast to all that, I prefer to spend time on companies likeDevoteam(EPA:DVT), which has not only revenues, but also profits. While profit is not necessarily a social good, it's easy to admire a business than can consistently produce it. 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.
Check out our latest analysis for Devoteam
If a company can keep growing earnings per share (EPS) long enough, its share price will eventually follow. That means EPS growth is considered a real positive by most successful long-term investors. As a tree reaches steadily for the sky, Devoteam's EPS has grown 30% each year, compound, over three years. If the company can sustain that sort of growth, we'd expect shareholders to come away winners.
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. Devoteam maintained stable EBIT margins over the last year, all while growing revenue 27% to €652m. That's progress.
In the chart below, you can see how the company has grown earnings, and revenue, over time. For finer detail, click on the image.
While we live in the present moment at all times, there's no doubt in my mind that the future matters more than the past. So why not checkthis interactive chart depicting future EPS estimates, for Devoteam?
I like company leaders to have some skin in the game, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. As a result, I'm encouraged by the fact that insiders own Devoteam shares worth a considerable sum. Indeed, they have a glittering mountain of wealth invested in it, currently valued at €237m. Coming in at 29% of the business, that holding gives insiders a lot of influence, and plenty of reason to generate value for shareholders. So it might be my imagination, but I do sense the glimmer of an opportunity.
You can't deny that Devoteam has grown its earnings per share at a very impressive rate. That's attractive. Further, the high level of insider buying impresses me, and suggests that I'm not the only one who appreciates the EPS growth. So this is very likely the kind of business that I like to spend time researching, with a view to discerning its true value. Once you've identified a business you like, the next step is to consider what you think it's worth. And right now is your chance to view our exclusivediscounted cashflow valuationof Devoteam. You might benefit from giving it a glance today.
Although Devoteam 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. |
Marine testifies Navy SEAL did not stab Iraq captive
SAN DIEGO (AP) A Marine who worked jointly in Iraq with a decorated Navy SEAL accused of murder testified Thursday that the platoon chief did not stab a wounded teenage Islamic State prisoner as alleged by other platoon members. Marine Staff Sgt. Giorgio Kirylo said he watched as Special Operations Chief Edward Gallagher tried to save the 17-year-old captive and never saw him use his hunting knife on him. Gallagher is accused of fatally stabbing the adolescent captive while he was under his care in Iraq in 2017 and to shooting civilians. He has pleaded not guilty to murder and attempted murder. After the boy died, Kirylo said he moved the corpse to pose for a "cool guy trophy" photo because it was the platoon's first Islamic State prisoner captured from their battlefield. He said he lifted up the teen's body to put the corpse's head on his foot when a bandage on his neck popped up. Kirylo testified that he saw no stab wounds under the dressing. He said each member of the platoon took turns posing with the body, and no one was upset. He said the platoon members took turns taking photos with the body because they were excited that they had coordinated an air strike with Iraqi troops that had killed Islamic State fighters including the captive's commander. "This was our unofficial war trophy," the Marine Raider said. Kirylo statements contradict those of SEALs who testified that Gallagher, who was on his eighth deployment, stabbed the prisoner. Two of the SEALs testified that they witnessed the stabbing, but one Corey Scott said he was the one who ultimately killed the militant by plugging his breathing tube with his thumb as an act of mercy. The Navy said it is reviewing Scott's statements following his stunning testimony last week and it may press perjury charges. Kirylo said he was close friends with several SEALs who reported the stabbing, but he now considers them liars. Many of the SEALs who testified said their names were made public and spread on social media because they came out against the chief. One indicated that taking the stand has jeopardized his career. Story continues Kirylo described the team as full of young SEALs who complained about Gallagher putting them close to the front lines and stealing their care packages. He described Gallagher as an "old school" SEAL whose aggressive style was forcing ISIS fighters to come "out of the woodwork into a shooting gallery." He said the night after the militant died that one of the SEALs encouraged the team to delete the photos, telling them it was a war crime. Kirylo told them it was not. The military jury on Thursday also saw videotaped testimony taken June 3 from the Iraqi general who handed over the war prisoner after he was injured in the airstrike outside Mosul. Gen. Abbas al-Jubouri, whose forces were partnered with U.S. troops, testified that he ordered his troops to hand over the militant to Gallagher and his fellow SEALs because he wanted to keep him alive for interrogation later. The general said during defense questioning that he did not see Gallagher harm the captive in any way and if he had, he would have spoken up. "If he did any mistake with this kid, or if anyone had from the Navy SEALs, I would have stopped them," al-Jubouri said. When he was shown photos of the dead militant with bandages around his neck and tubes in his chest, al-Jubouri said he did not recall seeing the boy with all that. ___ Weber reported from Los Angeles. ____ Corrects spelling of Marine to Giorgio Kirylo instead of Georgio, and that two of the SEALs testified that they witnessed the stabbing. |
Has ROCKWOOL International A/S (CPH:ROCK B) Got Enough Cash?
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Small-caps and large-caps are wildly popular among investors, however, mid-cap stocks, such as ROCKWOOL International A/S (CPH:ROCK B), with a market capitalization of ø34b, rarely draw their attention from the investing community. Despite this, commonly overlooked mid-caps have historically produced better risk-adjusted returns than their small and large-cap counterparts. ROCK B’s financial liquidity and debt position will be analysed in this article, to get an idea of whether the company can fund opportunities for strategic growth and maintain strength through economic downturns. Don’t forget that this is a general and concentrated examination of ROCKWOOL International's financial health, so you should conduct further analysisinto ROCK B here.
See our latest analysis for ROCKWOOL International
Debt-to-equity ratio standards differ between industries, as some are more capital-intensive than others, meaning they need more capital to carry out core operations. A ratio below 40% for mid-cap stocks is considered as financially healthy, as a rule of thumb. For ROCK B, the debt-to-equity ratio is zero, meaning that the company has no debt. This means it has been running its business utilising funding from only its equity capital, which is rather impressive. Investors' risk associated with debt is virtually non-existent with ROCK B, and the company has plenty of headroom and ability to raise debt should it need to in the future.
Given zero long-term debt on its balance sheet, ROCKWOOL International has no solvency issues, which is used to describe the company’s ability to meet its long-term obligations. But another important aspect of financial health is liquidity: the company’s ability to meet short-term obligations, including payments to suppliers and employees. Looking at ROCK B’s €413m in current liabilities, it appears that the company has been able to meet these obligations given the level of current assets of €971m, with a current ratio of 2.35x. The current ratio is the number you get when you divide current assets by current liabilities. Usually, for Building companies, this is a suitable ratio as there's enough of a cash buffer without holding too much capital in low return investments.
ROCK B has no debt in addition to ample cash to cover its near-term commitments. Its safe operations reduces risk for the company and its investors, but some degree of debt may also ramp up earnings growth and operational efficiency. Keep in mind I haven't considered other factors such as how ROCK B has performed in the past. I recommend you continue to research ROCKWOOL International to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for ROCK B’s future growth? Take a look at ourfree research report of analyst consensusfor ROCK B’s outlook.
2. Valuation: What is ROCK 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 ROCK B 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. |
Hair grown through skin using stem cells in breakthrough that could cure baldness
Human hair growing through the skin of a mouse A cure for baldness is on the horizon after scientists created hair that grows through the skin using human stem cells. Currently transplanting hair follicles from one part of the head to the other is the only option for the millions of Britain facing male-pattern baldness, alopecia or burns. But now scientists in the US have coaxed human pluripotent stem cells - the type which can become anything - into dermal papilla cells, which regulate hair follicle formation, thickness, length and growth. Usually dermal papilla cells cannot be obtained in large enough amounts to be useful for restoring hair growth. But growing them from stem cells means scientists can create an unlimited supply for transplantation. The team showed it could be done in 2015, but then the hair appeared haphazard and unnatural. Now four years on, they have refined the process to create tufts of hair that look and feel real. It marks an important step towards the development of an injection which could treat hair loss. Dr Alexey Terskikh Credit: Sanford Burnham Prebys Our new protocol overcomes key technological challenges that kept our discovery from real-world use, said Dr Alexey Terskikh, an associate professor in Sanford Burnham Prebys' Development, Aging and Regeneration Program. Now we have a robust, highly controlled method for generating natural-looking hair that grows through the skin using an unlimited source of human stem cell-derived dermal papilla cells. This is a critical breakthrough in the development of cell-based hair-loss therapies and the regenerative medicine field. The not-for-profit Sanford Burnham Prebys Institute , based in California, is largely funded by Sanford Health, which helped Jack Nicklaus, the golfer, regain his swing through injections of stem cells in his back . The new technique uses a 3D biodegradable scaffold made from the same material as dissolvable stitches which controls the direction of hair growth and helps the stem cells integrate into the skin. Tests were carried out on mice which had been engineered to be without body hair. When the human stem cells were injected under the scaffold, small tufts were shown to grow like normal hair. Story continues Scientists are hopeful that in future they will be able to take a blood sample from a patient, isolate their stem cells and coax them to become huge amounts dermal papilla cells before injecting them directly into the head, where they will embed and grow. Taking cells directly from the transplant patient also means there will be no danger or rejection. Two-thirds of all men will eventually be affected by male pattern baldness in the UK, which means that 7.4 million men are losing their hair at any one time. Genetics, aging, childbirth, cancer treatment, burn injuries and medical disorders such as alopecia can also cause the condition, and hair loss can accompany emotional distress leading to anxiety and depression. Hair loss profoundly affects many people's lives, said Dr Richard Chaffoo, a plastic surgeon who founded La Jolla Hair MD and is a medical adviser on the project, A significant part of my practice involves both men and women who are seeking solutions to their hair loss. I am eager to advance this groundbreaking technology, which could improve the lives of millions of people who struggle with hair loss. The research was presented at the International Society of Stem Cell Research in Los Angeles. |
What Can We Make Of Telenor ASA’s (OB:TEL) High Return On Capital?
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Today we'll look at Telenor ASA (OB:TEL) and reflect on its potential as an investment. Specifically, we'll consider its Return On Capital Employed (ROCE), since that will give us an insight into how efficiently the business can generate profits from the capital it requires.
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 measures the 'return' (pre-tax profit) a company generates from capital employed in its business. In general, businesses with a higher ROCE are usually better quality. 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.'
The formula for calculating the return on capital employed is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
Or for Telenor:
0.18 = øre26b ÷ (øre219b - øre75b) (Based on the trailing twelve months to March 2019.)
So,Telenor has an ROCE of 18%.
Check out our latest analysis for Telenor
When making comparisons between similar businesses, investors may find ROCE useful. In our analysis, Telenor's ROCE is meaningfully higher than the 7.9% average in the Telecom industry. I think that's good to see, since it implies the company is better than other companies at making the most of its capital. Independently of how Telenor compares to its industry, its ROCE in absolute terms appears decent, and the company may be worthy of closer investigation.
You can see in the image below how Telenor's ROCE compares to its industry. Click to see more on past growth.
When considering this metric, keep in mind that it is backwards looking, and not necessarily predictive. ROCE can be misleading for companies in cyclical industries, with returns looking impressive during the boom times, but very weak during the busts. ROCE is only a point-in-time measure. Since the future is so important for investors, you should check out ourfreereport on analyst forecasts for Telenor.
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 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.
Telenor has total liabilities of øre75b and total assets of øre219b. As a result, its current liabilities are equal to approximately 34% of its total assets. Telenor has a middling amount of current liabilities, increasing its ROCE somewhat.
While its ROCE looks good, it's worth remembering that the current liabilities are making the business look better. Telenor looks strong on this analysis,but there are plenty of other companies that could be a good opportunity. Here is afree listof companies growing earnings rapidly.
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. |
These Fundamentals Make Delta Plus Group (EPA:DLTA) Truly Worth Looking At
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Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Delta Plus Group (EPA:DLTA) due to its excellent fundamentals in more than one area. DLTA is a financially-healthy , dividend-paying company with a a strong history of performance. Below is a brief commentary on these key aspects. If you're interested in understanding beyond my broad commentary, take a look at thereport on Delta Plus Group here.
DLTA delivered a satisfying double-digit returns of 8.8% in the most recent year Unsurprisingly, DLTA surpassed the industry return of 3.6%, which gives us more confidence of the company's capacity to drive earnings going forward. DLTA is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that DLTA has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. DLTA seems to have put its debt to good use, generating operating cash levels of 0.27x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
Income investors would also be happy to know that DLTA is a great dividend company, with a current yield standing at 1.7%. DLTA has also been regularly increasing its dividend payments to shareholders over the past decade.
For Delta Plus Group, there are three important factors you should further research:
1. Future Outlook: What are well-informed industry analysts predicting for DLTA’s future growth? Take a look at ourfree research report of analyst consensusfor DLTA’s outlook.
2. Valuation: What is DLTA 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 DLTA is currently mispriced by the market.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of DLTA? 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. |
Asia's Iran oil imports fall to lowest in at least five years in May
By Florence Tan
SINGAPORE (Reuters) - Asia's crude oil imports from Iran fell in May to the lowest in at least five years after China and India wound down purchases amid U.S. sanctions, while Japan and South Korea halted imports, data from government and trade sources showed on Friday.
Total imports from Asia's top four buyers came to 386,021 barrels per day (bpd) of Iranian crude in May, down 78.5% from a year ago to the lowest monthly level since the data began to be collected by Reuters in 2014.
Imports had hit a 9-month high of 1.62 million bpd just a month earlier as buyers rushed to ship in as much as they could before waivers from U.S. sanctions on Iran expired at the start of May.
The United States withdrew from a nuclear accord between world powers and Iran last year and re-imposed sanctions on Tehran that cut off legitimate means for the OPEC producer to export its oil.
The absence of Iranian oil drove spot premiums for crude sharply higher as Asian buyers scoured the world for replacement supplies.
(Reporting by Florence Tan; editing by Richard Pullin) |
INSIGHT-Saudi Arabia's hometown ambitions could clip wealth fund's wings
* PIF's twin mandate: generate wealth and develop local projects
* Sources say domestic demands are risking global ambitions
* Fund is central to crown prince's aim to end oil dependence
* Foreign capital sceptical about returns on domestic projects
* So far, no international investors announced for NEOM project
By Saeed Azhar and Stephen Kalin
RIYADH, June 28 (Reuters) - Saudi Arabia’s Public Investment Fund (PIF) risks being pulled deeper into Crown Prince Mohammed bin Salman’s domestic projects, curbing its international ambitions and tying its fortunes closer to its home market, four sources familiar with its strategy said.
Unusually for a sovereign wealth fund, which typically is solely focused on generating wealth for future generations, PIF has a two-pronged mandate - it is also expected to develop domestic projects that will reduce Saudi Arabia’s reliance on oil. That means PIF acting as a cornerstone investor on some major hometown ventures with foreign investors expected to join in.
The projects include a high-tech economic zone dubbed NEOM planned for an area close to the size of Belgium, an entertainment park outside Riyadh called Qiddiya being built on a site 2-1/2 times larger than Disney World, and a luxury tourist resort off the Red Sea coast that will span more than 90 islands.
With the exception of Six Flags, a U.S. theme park group, which signed a deal to operate at Qiddiya, no other foreign partners or investors have been publicly announced for the ventures. Six Flags did not respond to a request for comment.
Now, two years after the projects were announced, there is a risk they could be delayed or scaled back if foreign funding does not materialise because PIF won’t be able to put up all the money required in the current timeframe, according to two of the sources.
PIF’s domestic responsibilities also make it more challenging for the $300 billion fund to resume its previous frenetic pace of overseas investment. It has not made any foreign investments so far this year, according to Refinitiv data.
PIF declined to comment on the involvement of foreign capital and the impact the domestic projects could have on its plans. It said it was still aiming to have a quarter of its assets invested abroad by next year, and half by 2030 compared to 15% currently.
PIF also said significant progress had been made in financing plans for the domestic projects.
"Each Giga-Project is developing tailored partnership and financing models, through discussions and coordination between PIF, the respective management teams and lending institutions,” the fund said.
It declined to say how much it has invested so far or the amount of financing being discussed. PIF does not release information about its financial performance.
The fund lost out on an estimated $100 billion windfall when the initial public offering of oil giant Saudi Aramco was shelved last year. It has partially filled the gap by raising debt and selling a stake in a petrochemicals company.
As the world’s largest oil exporter, Saudi Arabia has the means to step in if private funding doesn’t materialise for the projects. The state could inject fresh capital into PIF or finance the ventures from the central government budget but analysts said it would likely want to avoid that.
“The government has not stated any intention to inject fresh funding into the PIF and we think it will try to limit its on-budget exposure, conscious of still-high fiscal deficits and wanting to try to preserve its balance sheet strengths,” said Krisjanis Krustins, a director of sovereigns at Fitch Rating agency.
The government's communications office did not respond to a Reuters request for comment.
DIVERSIFICATION
Saudi authorities have said NEOM, tucked away in the desert kingdom's northwest corner, will cost $500 billion. Estimates have not been released for Qiddiya or the Red Sea Project, but a source familiar with the latter said its initial phase would cost $2.5 billion.
Local media have reported the cost of the infrastructure alone for Qiddiya would reach up to 30 billion riyals ($8 billion) and the project would eventually be worth tens of billions of riyals. Reuters could not independently verify these figures.
Reuters spoke to more than a dozen people for this story, including bankers, lawyers and corporate advisers. Most of them declined to be named because of sensitivities around PIF, which is chaired by the 33-year-old crown prince, who also controls the kingdom's economic, energy and security policies.
Cyrille Urfer, who used to lead PIF’s investments in global public markets, said it was inevitable the fund would play a major role in the crown prince’s plans to diversify the economy away from crude.
"At the end of the day, the owner and the one who takes the decision is the Saudi government, and PIF is the tool that is supervising the execution of these projects," said Urfer, who now works at Geneva-based asset manager Unigestion.
The Red Sea Development Company, set up to develop the tourism scheme, said it was talking to banks for financing but declined to provide details. Two banking sources told Reuters the company had so far only approached local lenders.
For international investors, reputational risk is a factor when investing in Saudi Arabia. British billionaire Richard Branson suspended his directorship of the Red Sea Project after the murder of Saudi journalist Jamal Khashoggi last year by operatives close to the crown prince.
Last week, the United Nations called for the crown prince to be investigated after it said there was credible evidence linking him to the killing. The government rejected the report.
A spokeswoman for Branson’s company, Virgin, told Reuters his position had not changed.
The Qiddiya Investment Company said it had been in talks with potential investors for the last year.
"We expect this pattern will increase significantly as more of the detailed plans of the project become known," the company said in a statement.
MULTI-DECADE
Since the crown prince took charge of PIF in 2015, it has transformed from a staid state holding company into an aggressive purchaser of assets. It has doubled in size, bought stakes in companies such as Uber and Tesla, committed half the funding for a planned $40 billion infrastructure fund with U.S. private equity firm Blackstone, and allocated $45 billion to a technology fund run by Japan’s SoftBank.
For a factbox on PIF’s investments click on
Still, PIF has some way to go before it fulfils the crown prince's ambition for it to be the world’s largest sovereign wealth fund. It is currently one-third the size of Norway's wealth fund – the global leader – which invests all its assets abroad.
The PIF could invest in a second technology fund currently being raised by SoftBank. But with Saudi Arabia estimated to be running a larger budget deficit this year due to higher government spending, people familiar with PIF say it is unlikely to contribute a large amount, if any.
PIF has declined to comment on its intentions for the second technology fund. Son has said initially SoftBank would likely be the only investor.
To raise funds for its investments, PIF sold a 70% stake in petrochemicals firm Saudi Basic Industries Corp (SABIC) to Aramco in March for $69 billion and borrowed $11 billion from the loan market. It will get half of the SABIC proceeds when the deal closes next year and the rest will be paid over two years.
PIF plans to borrow at least another $8 billion later this year via a bridge loan.
A NEOM spokesman said funds for the mega-zone would come from PIF, the finance ministry, investments from local private investors, foreign direct investment, public-private partnerships and other international financial institutions and banks.
"PIF will need the help of many investors," said a person who advised it on projects, including NEOM.
SoftBank is considering investing or partnering in the Saudi projects although no money has yet been committed, a source familiar with the matter said.
Three bankers who looked at the three projects say foreign money has been put off so far by a lack of detail on what protections financiers would have in the event of a default and scepticism about when they would see returns.
A PIF strategy paper puts the projects' expected return at 8.5% without specifying a timeline. It describes them as "multi-decade" endeavours. (Additional reporting by Sylvia Westall, Hadeel Al Sayegh, Davide Barbuscia in Dubai, Marwa Rashad in Riyadh and Sam Nussey in Tokyo; Editing by Ghaida Ghantous and Carmel Crimmins.) |
Where Delta Plus Group (EPA:DLTA) Stands In Terms Of Earnings Growth Against Its Industry
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Examining Delta Plus Group's (EPA:DLTA) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess DLTA's latest performance announced on 31 December 2018 and weigh these figures against its longer term trend and industry movements.
See our latest analysis for Delta Plus Group
DLTA's trailing twelve-month earnings (from 31 December 2018) of €21m has jumped 11% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 20%, indicating the rate at which DLTA is growing has slowed down. To understand what's happening, let's examine what's transpiring with margins and whether the whole industry is feeling the heat.
In terms of returns from investment, Delta Plus Group has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. However, its return on assets (ROA) of 8.8% exceeds the FR Commercial Services industry of 3.6%, indicating Delta Plus Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Delta Plus Group’s debt level, has increased over the past 3 years from 17% to 18%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 88% to 62% over the past 5 years.
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Delta Plus Group to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for DLTA’s future growth? Take a look at ourfree research report of analyst consensusfor DLTA’s outlook.
2. Financial Health: Are DLTA’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 December 2018. 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. |
Flipkart to replace 40% of its delivery vans with EVs
(Reuters) - Walmart Inc's Indian unit Flipkart said late Thursday it plans to replace nearly 40% of its current fleet of delivery vans with electric vehicles (EVs) by March 2020, as part of its efforts to cut down on its carbon footprint.
The Bengaluru-based ecommerce company said it will start with deploying 160 vans by 2019-end. Some of these EVs are already plying in New Delhi.
Flipkart has amped up its focus on sustainability since its $16 billion acquisition by Walmart last year. The company has also expanded its operations at a fast pace as it competes with rival Amazon Inc in India's online sales market.
Flipkart's move towards electric vehicles, the first among big online firms in the country, comes as the Indian government is pushing for faster adoption of these to fight pollution.
"These efforts will help us meaningfully contribute towards electric mobility... while bringing cost efficiencies for the business. In this process, we also hope to create an ecosystem for adoption of electric mobility in India," Amitesh Jha, senior vice-president of Ekart and Marketplace at Flipkart, said in a statement.
Ecommerce companies in India are also in talks with the government around various policies related to their operations in the country. Earlier this week, Commerce Minister Piyush Goyal met with ecommerce companies, including Flipkart, to talk about compliance with new foreign investment rules, Reuters reported citing sources.
In a statement dated June 27, Flipkart said it is working with local partners to co-design concepts for EVs best suited for the growing e-commerce industry.
"We believe these small but meaningful steps in this direction will go a long way in paving the way for larger adoption of EVs in the country," group Chief Executive Kalyan Krishnamurthy, said.
The electric last-mile delivery vehicles will help cut Flipkart's carbon emissions by over 50%, the company added.
(Reporting by Nivedita Bhattacharjee in Bengaluru; Editing by Rashmi Aich) |
China copper importers seek new metal sources as scrap crackdown bites
By Tom Daly
BEIJING (Reuters) - Chinese copper buyers are hunting for alternative sources of the commodity as ramped-up restrictions on imports of high-grade copper scrap kick in on Monday in the world's top consumer of the metal.
China has been gradually curbing imports of scrap, which accounted for 10% of its copper use in 2018, in a campaign against shipping foreign solid waste into the country.
From Monday, only firms with import quotas can bring in scrap copper from overseas.
"(Importers are) already looking for blister out of South America and Africa and everywhere," said an executive at a company with scrap operations in China's eastern province of Zhejiang. Blister is a partially purified form of copper.
Off-grade copper cathodes, which do not quite conform to standards set by exchanges such as the London Metal Exchange, are another alternative. Cathodes are a basic form of copper used to make products such as copper rods and tubes.
Chinese buyers are "very much interested" in off-grade cathodes, which can sell at a discount of $100 a tonne or more to registered brands, to compensate for the lack of scrap, said a source with a major supplier. He declined to be identified as he was not authorised to speak to the media.
"It seems that rod mills here are not so picky now," he added.
Supply worries have been compounded by uncertainty over how quickly and how widely import quotas for high-grade scrap will be awarded.
China's environment ministry last week released the first batch of quotas, mostly to companies in Zhejiang. Those were for 240,000 tonnes in total, equivalent to a tenth of China's copper scrap imports in 2018.
"It was slightly higher than my previous expectations, but we haven't seen any quotas released for Guangdong province yet, so maybe we shouldn't get too excited," said Chris Wu, senior copper consultant at research house CRU.
Zhejiang and the southern province of Guangdong are the country's two main metal recycling centres.
The scrap executive with operations in Zhejiang said the quotas issued so far amounted to a steep cut that would cause "huge disruption".
The list of quotas gave no timeframe for imports, but the executive said they were likely for the third quarter. "Q4 could be even less," he warned.
"It's created a huge panic and I think if anything it's going to push (copper) prices up because they are going to be desperate for raw material in China."
The environment ministry did not immediately respond to a faxed request for comment.
CHOKED PORTS
With Monday just days away, importers report congestion at key scrap ports. Two sources using Ningbo in Zhejiang said customs inspections had already become very strict. It has been taking 13-15 days to claim delivery of cargoes this month compared to the usual 10 days, one said.
Sanshan port, sometimes known as Nanhai, in Guangdong, near scrap hub Foshan, stopped accepting cargoes earlier than planned because of an excessive build-up of stockpiles.
"Everyone wants to get their cargo before July," a Guangdong-based buyer said.
(Reporting by Tom Daly; Editing by Joseph Radford) |
Inbetweeners star James Buckley says there are 'no pros to being famous'
Actor James Buckley has spoken about his struggles with fame and the anxiety it has caused him. Responding to a fan question about the pros and cons of fame on his podcast Complete Load of Podcast , the Inbetweeners star said apart from “getting a table at a restaurant or people being really helpful when you go into a shop”, he couldn’t think of any pros of being famous. “The cons are... not being able to relax,” he said. “Not being able to feel like you’re not ‘on’ when leaving the house, at any point. I don’t wanna winge about it, but it does make me anxious. It makes me very self-conscious.” “I’m accidentally famous,” he continued. “I’m not built to be famous. I’m not a star. So being stared at, people taking sneaky pictures of you...” Buckley, who rose to fame playing the sex-obsessed Jay Cartwright on the Bafta-winning E4 sitcom The Inbetweeners , clarified that he enjoys meeting fans who approach him to say they like his work, or ask permission for a photo. “But I feel constantly on edge,” he said. “I’m getting closer and closer to never leaving my house again. “I am struggling with it, and I’m not even that famous,” he added. “I’m not Tom Cruise or Brad Pitt, but I really struggle with it. It’s something I find really difficult. People taking secret pictures of me... it fries my brain. Just come and talk to me, I’d love to talk to you. That’s gonna make my day.” Buckley concluded by pointing out the impact fame can have on a person’s mental health, “and you cannot put a price on mental health”. Addressing whether he would change careers, he joked he was “not intelligent enough to have a proper job”. “I never wanted to be famous, I just wanted to make people laugh on television,” he said. “And it is a job I absolutely love. But you will become a bit insane.” Since starring in The Inbetweeners, Buckley has appeared in a number of film and TV roles, including the Steve Coogan fantasy comedy Zapped! |
Is Zotefoams plc's (LON:ZTF) CEO Overpaid Relative To Its Peers?
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In 2000 David Stirling was appointed CEO of Zotefoams plc (LON:ZTF). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Zotefoams
Our data indicates that Zotefoams plc is worth UK£285m, and total annual CEO compensation is UK£792k. (This figure is for the year to December 2018). That's a notable increase of 17% on last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£249k. When we examined a selection of companies with market caps ranging from UK£158m to UK£631m, we found the median CEO total compensation was UK£654k.
So David Stirling receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at Zotefoams, below.
Over the last three years Zotefoams plc has grown its earnings per share (EPS) by an average of 16% per year (using a line of best fit). It achieved revenue growth of 16% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to checkthis free visual depiction ofwhat analysts expectfor the future.
Most shareholders would probably be pleased with Zotefoams plc for providing a total return of 134% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
David Stirling is paid around the same as most CEOs of similar size companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Indeed, many might consider the pay rather modest, given the solid company performance! CEO compensation is one thing, but it is also interesting tocheck if the CEO is buying or selling Zotefoams (free visualization of insider trades).
Important note:Zotefoams may not be the best stock to buy. You might find somethingbetterinthis list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
Dude uses washing machine to mix alcohol for party
Most people mix their cocktails by hand but a man from Bohol province who had to welcome 200 guests to his party had to find an easier way to do it. His brilliant idea? To use a washing machine as a massive blender. The genius behind it is Tagbilaran City resident Dean Albert Raynaldo, who celebrated his 25th birthday and his wife’s baby shower on Wednesday. His guests were so stoked to see the washing machine that they posted videos of it on Facebook that same night. Here’s the video that was taken by his friend Camille Gabuya. Her video has gone viral and has been shared almost 87,000 times. Not to be outdone is Raynaldo’s other friend Matt Lubid, who also took a video. His post has gone viral and has been shared almost 40,000 times. Raynaldo told Coconuts Manila on Facebook Messenger that he bought a new washing machine for the occasion. “In our parties before, we would usually just mix the alcohol and fruit juice in a huge plastic container, then we attach the container to an electronic water dispenser.” “One day, my brother and friends suddenly came up with the idea of using a washing machine to mix drinks. I tried to look for one online because we needed something new. It wasn’t that expensive, so I [bought it and] pushed through with the plan.” Raynaldo proudly said that he only spent PHP2,000 (US$39.05) to buy the washing machine and PHP5,000 (US$97.64) for the alcohol and fruit juice. While it might look like a lot of alcohol was dumped into the washing machine, Raynaldo said that a quarter of the mix was composed of fruit juice. “Two hundred guests enjoyed those drinks,” he said. The finished product was also superior to what they used to have. “It tasted better because it mixed everything well. Before, we had to shake the huge plastic container by hand [and the drink didn’t taste that good],” he said. Raynaldo said he’s not sure when they’re going to use that special washing machine again. While there have been some haters online, many also thought the idea was really cool. RanniDane Honra tagged a friend and wrote in Filipino: “Let’s buy a new washing machine. This would be so good on your birthday!” Photo: Matt Lubid Lawrence Acosta was amazed. “I didn’t know you could use a washing machine to mix drinks. Thanks [for the idea].” Photo: Matt Lubid Kanika Grey tagged a friend and told her that they should do the same on her birthday. Photo: Matt Lubid Mary Jane Maycon tagged a friend and wrote: “Next time we’re having drinks at your house let’s bring out your washing machine.” Story continues Photo: Matt Lubid Remember to drink moderately! Would you try this yourself? Tell us by leaving a comment below or tweeting to @CoconutsManila. This article, Dude uses washing machine to mix alcohol for party , originally appeared on Coconuts , Asia's leading alternative media company. Want more Coconuts? Sign up for our newsletters! View comments |
What You Must Know About Atlas Copco AB's (STO:ATCO A) Financial Health
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Atlas Copco AB (STO:ATCO A), a large-cap worth kr343b, comes to mind for investors seeking a strong and reliable stock investment. Most investors favour these big stocks due to their strong balance sheet and high market liquidity, meaning there are an abundance of stock in the public market available for trading. These companies are resilient in times of low liquidity and are not as strongly impacted by interest rate hikes as companies with lots of debt. Today I will analyse the latest financial data for ATCO A to determine is solvency and liquidity and whether the stock is a sound investment.
View our latest analysis for Atlas Copco
ATCO A has shrunk its total debt levels in the last twelve months, from kr23b to kr19b , which also accounts for long term debt. With this debt repayment, the current cash and short-term investment levels stands at kr14b to keep the business going. Moreover, ATCO A has produced kr18b in operating cash flow during the same period of time, resulting in an operating cash to total debt ratio of 94%, signalling that ATCO A’s current level of operating cash is high enough to cover debt.
At the current liabilities level of kr32b, it appears that the company has been able to meet these obligations given the level of current assets of kr54b, with a current ratio of 1.69x. The current ratio is the number you get when you divide current assets by current liabilities. Usually, for Machinery 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.
With a debt-to-equity ratio of 40%, ATCO A's debt level may be seen as prudent. ATCO A is not taking on too much debt commitment, which may be constraining for future growth. We can test if ATCO A’s debt levels are sustainable by measuring interest payments against earnings of a company. As a rule of thumb, a company should have earnings before interest and tax (EBIT) of at least three times the size of net interest. In ATCO A's case, the ratio of 40.21x suggests that interest is comfortably covered. High interest coverage is seen as a responsible and safe practice, which highlights why most investors believe large-caps such as ATCO A is a safe investment.
ATCO A’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 ATCO A has been performing in the past. You should continue to research Atlas Copco to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for ATCO A’s future growth? Take a look at ourfree research report of analyst consensusfor ATCO A’s outlook.
2. Valuation: What is ATCO A 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 ATCO A 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 Does Atlas Copco AB's (STO:ATCO A) Share Price Indicate?
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Atlas Copco AB (STO:ATCO A) saw a double-digit share price rise of over 10% in the past couple of months on the OM. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Atlas Copco’s outlook and valuation to see if the opportunity still exists.
See our latest analysis for Atlas Copco
According to my valuation model, Atlas Copco seems to be fairly priced at around 18.12% above my intrinsic value, which means if you buy Atlas Copco today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is SEK247.71, then there isn’t really any room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since Atlas Copco’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. Atlas Copco’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
Are you a shareholder?It seems like the market has already priced in ATCO A’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 the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor?If you’ve been keeping an eye on ATCO A, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, 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 Atlas Copco. You can find everything you need to know about Atlas Copco inthe latest infographic research report. If you are no longer interested in Atlas Copco, 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. |
Factbox: China to tighten restrictions on scrap metal imports from Monday
BEIJING (Reuters) - New restrictions on imports of scrap metal into China come into force on Monday, nearly two years after Beijing told the World Trade Organization it would stop accepting shipments of solid waste as part of a sweeping campaign against "foreign garbage".
Below is a summary of the new rules, along with details on past and future measures in China's crackdown on scrap.
- China is restricting imports of eight further types of scrap metal from Monday July 1, including high-grade copper and aluminium scrap, known in China as 'Category 6', as well as types of steel scrap.
Scrap copper, which can be recycled into new metal or used as a direct-melt by fabricators making copper products, is seen as the most significant item on the latest restricted list.
- Companies that want to keep importing these items must apply for quotas from China's environment ministry, demonstrating they have facilities to process the material in compliance with environmental protection standards.
- The ministry has so far issued around 240,000 tonnes of import quotas for copper scrap, about 54,000 tonnes for aluminium scrap and almost 15,000 tonnes for steel scrap.
- China tightened the impurity threshold on nonferrous scrap imports to 1% from March 2018; the ferrous scrap threshold was set at 0.5%.
- It banned imports of low-grade Category 7 copper scrap and 15 other types of solid waste, including scrap vessels and iron and steel slag, from the end of 2018. It also stopped giving traders scrap copper import quotas in 2018, meaning only actual users could import.
- In tandem with the crackdown, China in August 2018 imposed import tariffs of 25% on scrap material from the United States in a tit-for-tat trade row. Chinese companies are entitled to apply for waivers.
- China's policy has seen alternative scrap-processing hubs sprout up across Southeast Asia, including in Malaysia, where major smelters like Jiangxi Copper are planning to invest.
- Since 2019, only 18 Chinese ports have been allowed to accept imports of solid waste, including scrap metal. Among them are ports in Tianjin and Dalian in the north; Ningbo, Qingdao and Shanghai in the east, and Guangzhou and Shenzhen in the south.
- China will restrict a further 16 types of solid waste, including stainless steel scrap, scrap tungsten, scrap magnesium and scrap titanium from end-2019.
- China, which cut solid waste imports by over 40% in 2018, aims to reduce such shipments to zero by the end of 2020. However, the scrap industry is lobbying for a recategorisation of high-quality scrap from "solid waste" to "resource" to ensure continued supply.
(Reporting by Tom Daly; Editing by Joseph Radford) |
Was Young & Co.'s Brewery, P.L.C.'s (LON:YNGA) Earnings Growth Better Than The Industry's?
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Measuring Young & Co.'s Brewery, P.L.C.'s (LON:YNGA) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess YNGA's recent performance announced on 01 April 2019 and weigh these figures against its long-term trend and industry movements.
View our latest analysis for Young's Brewery
YNGA's trailing twelve-month earnings (from 01 April 2019) of UK£32m has increased by 4.7% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 6.6%, indicating the rate at which YNGA is growing has slowed down. To understand what's happening, let's look at what's going on with margins and if the whole industry is feeling the heat.
In terms of returns from investment, Young's Brewery has fallen short of achieving a 20% return on equity (ROE), recording 5.3% instead. Furthermore, its return on assets (ROA) of 4.1% is below the GB Hospitality industry of 5.9%, indicating Young's Brewery's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Young's Brewery’s debt level, has declined over the past 3 years from 6.1% to 5.8%.
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Young's Brewery gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Young's Brewery to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for YNGA’s future growth? Take a look at ourfree research report of analyst consensusfor YNGA’s outlook.
2. Financial Health: Are YNGA’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 01 April 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. |
Does Young & Co.'s Brewery, P.L.C.'s (LON:YNGA) Recent Track Record Look Strong?
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For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on Young & Co.'s Brewery, P.L.C. (LON:YNGA) useful as an attempt to give more color around how Young's Brewery is currently performing.
See our latest analysis for Young's Brewery
YNGA's trailing twelve-month earnings (from 01 April 2019) of UK£32m has increased by 4.7% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 6.6%, indicating the rate at which YNGA is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s transpiring with margins and whether the whole industry is experiencing the hit as well.
In terms of returns from investment, Young's Brewery has fallen short of achieving a 20% return on equity (ROE), recording 5.3% instead. Furthermore, its return on assets (ROA) of 4.1% is below the GB Hospitality industry of 5.9%, indicating Young's Brewery's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Young's Brewery’s debt level, has declined over the past 3 years from 6.1% to 5.8%.
Young's Brewery's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Young's Brewery to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for YNGA’s future growth? Take a look at ourfree research report of analyst consensusfor YNGA’s outlook.
2. Financial Health: Are YNGA’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 01 April 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. |
Hong Kong Protesters Release a Video Appeal to World Leaders Meeting at the G20 Summit
In a video appeal, a Hong Kong pro-democracy party urged world leaders assembling today at the G20 Summit to push China on a controversial bill that has ignited a political crisis in the semiautonomous enclave. Joshua Wong, the international face of Hong Kongs democracy movement, published the video on his Facebook page Thursday. He and two other members of his Demosisto political party appealed to the foreign nations in English, Japanese and German. Hong Kong has always been a safe harbor from Chinas abusive system, but now the World City is under threat, Demosisto member Agnes Chow says in Japanese in the video, which includes trilingual subtitles. The video comes as millions of Hong Kong residents have taken to the streets this month over an extradition bill that has now been suspended but that protesters want altogether scrapped. They blocked roads and stormed the justice secretarys office on Thursday in the latest bout of unrest. The demonstrators are hoping to use the G20 summit in Japan over the weekend to elevate the plight of Hong Kong, and get the political crisis put on the agenda. Earlier in the week, protesters ran a marathon circuit of foreign consulates , including those of the U.S., U.K., Japan and France, soliciting their backing in the push for greater political freedom in the city. As night fell, as many as 10,000 rallied at City Hall while representatives read out calls for the withdrawal of the bill in Korean, French, Spanish and other languages of the G20 nations. Beijing has said it would not tolerate discussions of the topic at the summit. The upcoming G20 summit and the meetings between political leaders and [Chinese] President Xi [Jinping] are a key opportunity to address the hard line policy from Beijing to Hong Kong, Wong Yik-mo, a Demosisto member and vice-convener of the group that organized the City Hall demonstration, says in the video appeal. We implore citizens of the world to deliver our concerns to your government. Though Hong Kongs leader has indefinitely suspended the extradition bill, protestors continue to take to the streets to demand a full withdrawal, as well as an independent investigation into the polices use of tear gas and rubber bullets to disperse demonstrators on June 12 and a retraction of the governments characterization of some protestors as rioters. In a separate call to action, Demosisto co-founder and former lawmaker Nathan Law urged President Donald Trump to broach Hong Kongs struggle when he meets with Xi in G20. Story continues We hope President Donald Trump knows what matters most to Hong Kong: Our continued stability and prosperity depends on the limitation of Beijings interference, so we do not live in fear, Law wrote in open letter addressed to Secretary of State Mike Pompeo. Protestors also raised about $700,000 on a crowdfunding platform this week to run advertisements about the bill in major newspapers around the world. Full-page calls to Stand with Hong Kong at G20 were published in the New York Times , the Globe and Mail and Germanys Süddeutsche Zeitung, and more are set to appear in additional papers Friday. View comments |
Investors Who Bought Alten (EPA:ATE) Shares Five Years Ago Are Now Up 198%
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When you buy a stock there is always a possibility that it could drop 100%. But when you pick a company that is really flourishing, you canmakemore than 100%. Long termAlten SA(EPA:ATE) shareholders would be well aware of this, since the stock is up 198% in five years. In more good news, the share price has risen 4.8% in thirty days.
Check out our latest analysis for Alten
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 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 five years of share price growth, Alten achieved compound earnings per share (EPS) growth of 16% per year. This EPS growth is slower than the share price growth of 24% per year, over the same period. So it's fair to assume the market has a higher opinion of the business than it did five years ago. And that's hardly shocking given the track record of growth.
You can see below how EPS has changed over time (discover 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. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. It might be well worthwhile taking a look at ourfreereport on Alten's earnings, revenue and cash flow.
It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Alten's TSR for the last 5 years was 222%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!
It's nice to see that Alten shareholders have received a total shareholder return of 22% over the last year. And that does include the dividend. Having said that, the five-year TSR of 26% a year, is even better. Is Alten cheap compared to other companies? These3 valuation measuresmight help you decide.
Of courseAlten may not be the best stock to buy. So you may wish to see thisfreecollection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on FR exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
This Is Why We Need A Climate Debate
For a brief moment on Thursday night, the complicated, daunting and terrifyingly overdue task of averting climate catastrophe came into focus as the second contingent of Democratic presidential hopefuls took the debate stage. Sen. Kamala Harris (Calif.), vowing to enact a Green New Deal , evoked the smoldering embers of a wildfire-scorched California town that firefighters tried to protect even as their own homes burned. South Bend, Indiana, Mayor Pete Buttigieg proposed a carbon price and farming policies that trap carbon dioxide while breathing new life into rural America. Former Colorado Gov. John Hickenlooper , deriding the Green New Deal as socialism and defending oil and gas companies, promised to work with industry to cut emissions as quickly as possible. Former Vice President Joe Biden pledged to up the ante on former President Barack Obama’s signature policies and marshal the United States’ power to lead the world. Sen. Bernie Sanders (I-Vt.), in a challenge to the fossil fuel industry, stated gravely: “The old ways are no longer relevant.” But when moderators asked all 10 candidates to name a legislative priority, just two answered climate change. Then the debate moved on. It was, undoubtedly, an improvement over Wednesday night’s first debate, when candidates spent just over 9 minutes discussing an emergency that threatens, even in best-case projections, destruction on a scale incomprehensible to most people. Yet the candidates didn’t spar. They didn’t offer specifics. They didn’t even get the chance to respond to the same questions so that voters watching the televised performance could compare answers. The combined 15 minutes of the first primary parleys made it clear: Democrats need a full debate devoted exclusively to climate change. As it happens, Democrats ― both voters and a majority of the politicians vying for their ballots ― want a full debate devoted exclusively to climate change. Activists began calling on the Democratic National Committee to schedule a climate debate months ago, gathering as of Thursday night nearly 223,000 signatures on an online petition . Washington Gov. Jay Inslee, running for president on climate change alone, championed the cause and rallied 14 other contenders, including Biden and Sens. Kirsten Gillibrand (N.Y.) and Elizabeth Warren (Mass.), behind him. A poll taken this month found that 64% of Democratic-leaning voters support the idea. Story continues And yet the DNC, the Democrats’ main party organ, remains steadfast against a full debate devoted exclusively to climate change. Why? Democratic presidential candidates had a lot to say Thursday night on the debate stage in Miami, but little of it was about climate change. (Photo: Wilfredo Lee/ASSOCIATED PRESS) Earlier this month, DNC Chair Tom Perez, responding to intensifying pressure from Inslee’s campaign, argued in an awkwardly defensive Medium post that such an event would unfairly favor the governor’s candidacy. But the 14 other candidates backing Inslee up refutes that explanation. On Thursday evening, the DNC told me candidates are free to participate in whatever forums they want, opening the door to an unofficial discussion. But absent the party’s marketing resources and official seal, such an event would be unlikely to reach the millions of Americans who tuned in to watch these past two nights. It’s conceivable that top Democrats don’t grasp the magnitude of the crisis at hand. Last October, a United Nations report authored by the world’s top climate scientists projected that humanity needs to roughly halve its still-surging emissions over the next decade or face warming beyond 2.7 degrees Fahrenheit above pre-industrial levels. At that point, the extreme weather, sea-level rise and droughts ― to say nothing of the geopolitical conflicts such stresses trigger ― are expected to cost $54 trillion in damages and cut millions of lives short. The National Climate Assessment, a report authored by scientists at 13 federal agencies, confirmed the findings a month later. Federal researchers in Hawaii detected atmospheric concentrations of carbon dioxide at 415 parts per million last month ― the highest levels since humans evolved. It’s no longer theoretical. Historic wildfires, floods and storms killed thousands of Americans in just the past two years. A cyclone virtually wiped Mozambique’s fourth-largest city off the map overnight in March. Temperatures soared to an oven-hot 120 degrees Fahrenheit in India this month. This week, wildfire flames turned 42,000 acres of the Florida Everglades to ash just 30 miles northwest of where the Democrats stood on the debate stage. Perez said the DNC received “more than 50 requests to hold debates focused on” issues including immigration, racism and voting rights. Yet climate change is not another player on that stage. It’s the stage itself. A climate debate is a platform to examine each of those topics with the urgency they deserve. Droughts are parching once-fertile land in Central America, sowing unrest and driving desperate migrants north to the U.S. border with Mexico. At Wednesday night’s debate, former Housing and Urban Development Secretary Julián Castro and Sen. Cory Booker (N.J.) teased out “a Marshall Plan” for Honduras, Guatemala and El Salvador. The proposal was framed as part of the discussion of immigration policy. How would such a plan help lower emissions in other countries? What responsibility does the United States, the world’s second-biggest source of climate pollution, have to shelter those whose equatorial homes are inhospitably hot? A boy sits on an abandoned boat on what is left of drought-parched Lake Atescatempa in Guatemala. (Photo: MARVIN RECINOS via Getty Images) Nearly 3,000 Puerto Ricans died in 2017 as the U.S. territory languished without power for months in the wake of hurricanes scientists say are becoming more frequent with climate change. Black Americans breathe in 1.54 times more particulate matter pollution than the general population and are exposed to air that’s 38% more polluted than the air their white compatriots breathe. Can the industries whose emissions bring those inequities to bear really be a partner in curbing climate change? How would the next president right those wrongs? Where does racial justice fit into a future administration’s climate policy? The U.N. put out a report just this week warning that accelerating warming risks “climate apartheid.” China is investing billions building embassies and infrastructure overseas and advancing its authoritarian model of government as a template for stability in an increasingly chaotic world. How would a climate-focused foreign policy challenge those trends? What does a democratic solution to climate change look like? Are there rights an American president would sacrifice for ecological security? Data for Progress, the left-leaning think tank that drafted one of the first blueprints for a Green New Deal, posed even more straightforward questions in a memo sketching out a climate debate earlier this month. A sampling: Should climate policy focus on market-based mechanisms like a carbon tax, carbon price or cap-and-trade? Should climate policy like a Green New Deal explicitly call for restrictive supply-side interventions into the energy economy to bring about a managed decline and phaseout of fossil fuels, for example by banning new fossil fuel developments offshore and on public lands? How should fossil fuel companies and electric utilities be held accountable, both for past pollution and for knowing misrepresentation of climate science to the public and shareholders? Having answers to these questions should be a basic qualification for the White House. Unfortunately, its current occupant, and the party that’s expected to nominate him for a second term, take the easy route of stridently dismissing the need to ask at all. Blissful ignorance may seem like good politics. The eventual Democratic nominee’s answers could, after all, make it easier for President Donald Trump to win key industrial states like Pennsylvania and Wisconsin yet again. “Perez is more afraid of losing voters than he is of shielding people from the truth,” R.L. Miller, president of the political action committee Climate Hawks Vote, told me after the debate Thursday night. Another four years of the Trump administration would be a predictable climate disaster. But the only way to give voters a certain alternative is to hold a climate debate. Related Coverage World Headed For ‘Climate Apartheid,’ UN Expert Warns Democrats Spent Less Than 10 Minutes Talking About Climate Change At First 2020 Debate Jay Inslee Demands Rule Changes At DNC After First Debate ‘Failed’ On Climate Change Also on HuffPost Love HuffPost? Become a founding member of HuffPost Plus today. バングラデシュ バングラデシュは世界で最も人口 密度が高く 、一人あたりの耕地面積が少ない国の一つだ。2013年、 世界銀行 は「気候変動により、バングラデシュには川の異常氾濫、これまで以上に強力な熱帯低気圧、海面上昇、気温上昇などの危機が迫っている」と警告している。 また、EUの グローバル気候変動同盟 （GCCA）は「すでに沿岸部や乾燥・半乾燥地域では、洪水、熱帯低気圧、高潮、干ばつが頻発している」と報告している。 バングラデシュのシェイク・ハシナ首相は9月にハフポストUS版に寄稿し「バングラデシュは、気候変動の脅威に最もさらされている国です。気候変動と、気候変動が与えるその影響と闘うためには、明確なゴールが重要です」と述べている。また、2015年の降水量が例年より50%増え、農作物が深刻を受けたことに触れ「パリの気候変動会議では、測定可能で検証できる排出量削減目標を定めなければなりません」と強調した。 上の写真は2011年にバングラデシュ南西のサトキラ地区で起こった洪水の様子だ。男性がレスキューボートを待っている。 チャド ベリスク・メープルクロフトの「 気候変動脆弱性指数 」とノートルダムグローバル適応力指数で、チャドは最も気候変動の影響を受ける国のそれぞれ1位と2位に入っている。 チャドはアフリカで 最も貧しい国のひとつ で、大規模な自然災害に対処するための十分な設備がない。 GCCAの報告書 は「自然災害によって深刻な干ばつや破壊的な洪水が増加する可能性があり、農業、畜産、漁業、健康や住宅へ大きな打撃を与えるだろう」と伝えている。 気候変動による被害が最も顕著なのはチャド湖だ。 国連 によれば、湖の大きさは1963年と比較して20分の1に縮んでいる。 上の写真は、かつては世界で最も大きな湖のひとつだったチャド湖だ。ニジェール、ナイジェリア、カメルーンといったチャド湖に面するその他の国々も、気候変動と湖の面積が縮んだことによる 影響を受けている 。 パリの気候変動サミットで、ナイジェリアのムハンマド・ブハリ大統領は「チャド湖に面している国々は、お互いが直面している課題についてさらに詳しく話し合い、この問題を一日も早く解決しなければなりません」と 語った 。 太平洋の島々 海抜の低い太平洋の島国は、完全に海の下に沈んでしまう恐れがある。 10万5000人が住み、33の島国からなるキリバスは平均標高が2mもない。Webマガジン「 Slate 」によれば、パリの気候変動会議でアノテ・トン大統領は「島に人が住めない状態になった時は島民を保護するとフィジーが申し出てくれている」と語っている。 上の写真は9月に撮影された。キリバスの村民ベイア・ティームは、以前は3～4年に一度起こっていた異常な高潮が今は3カ月おきに発生し、ほとんどの井戸が海の下に沈んでしまった、と話す。 キリバスに助けの手を差し伸べたフィジーも、自然災害に直面している。10月に行われた太平洋諸国の会議でラトゥ・イノケ・クンブアンボラ外相は、気候に影響を受けやすい腸チフスやデング熱、レプトスピラ症、下痢性疾患がフィジーで再び増えていると述べたと ガーディアン紙 が伝えている。 ニジェール ニジェールでは国民の80%以上が農業に従事している。この農業への高い依存度が、気候変動による影響を大きくすると アメリカ地質調査所 の報告書は指摘する。 2013年には世界銀行のエコノミスト、エル・ハッジ・アダマ・トゥーレ氏が次のように述べている。「気候リスクにさらされ、さらに内陸国であるニジェールは、世界で最も温暖化の影響を受けやすい国のひとつです」「状況を複雑にしているのは、国内と地域それぞれで抱える過激派です。これらの要因が農業に影響を与えることで、食料や栄養の問題に発展します」 ニジェールは世界で最も出生率の高い国だ。女性1人あたりが産む子供は7.6人で、2031年までに人口が2倍に増加すると予想されている。気候変動で農業が打撃を受ければ、多くの国民が食料不足に苦しむ可能性がある。 上の写真は農作業をするニジェール人の少年と父親だ。2005年に撮影された。 ハイチ 「自然災害と社会経済問題が混ざり合うと気候変動に対して脆くなることを示す、ということをハイチの事例が示しています」と コロンビア大学 の地球研究所は説明する。 森林や土壌、水などの資源を乱用したことでハイチは気候変動に対して脆くなった。また、気候変動は天然資源に更なる被害を与えることになる、と GCCA は警告している。 ハイチは、ハリケーンの通り道に位置する。今後気候変動が進むにつれ、より強力なハリケーンがもっと頻繁に到来するだろうとコロンビア大学は予測している。 上の写真は2012年にハリケーン・サンディに襲われた時の様子だ。ポルトープランスの住民が浸水した家から泥水を捨てている。 コンゴ民主共和国 気候変動はコンゴ民主共和国の農業に大きな打撃を与え、病気を蔓延させる可能性がある。 コンゴでは90%近くの人が農業で生計を立てているが、気候変動により中央部に位置するコンゴ盆地では豪雨、洪水、地すべり、土壌の浸食が発生し、農作物が大きな打撃を受ける可能性があると BBC が伝えている。逆に南部のカタンガでは、2020年までに雨季が少なくとも2カ月短くなるだろうと予想されている。 また、温暖化によって マラリア や心臓血管病、水を介する感染症が増えるとも予測されている。 上の写真は、CO2を吸収するアカシアの木々の間でキャッサバを育てるコンゴ人男性。国連の地球温暖化防止条約で「CO2排出量の多い国」と登録されたことを受け、温暖化防止に取組んでいる。 アフガニスタン アフガニスタン は山が多く、内陸で乾燥した国だ。 国連 はアフガニスタンを、気候変動によって最も影響を受ける国の一つに認定し、600万ドルをかけて支援を行っている。 気候変動により、アフガニスタンでは干ばつや洪水が増え、砂漠化が進む可能性がある。また、約30年にわたって続いた戦争後の農業や安全の発展を 阻害する と、GCCAは警告する。 上の写真はカブールで埃まみれの道を羊と歩くアフガニスタンの少女だ。2007年に撮影された。 中央アフリカ共和国 最も貧しい国の一つ中央アフリカ共和国は、大統領失脚後に内戦が激化している。そこに気候変動が加わり、さらに状況を悪化させている。 森林の研究機関「国際林業研究センター」の科学者のデニス・ソンワ氏は「状況に適応する能力をつければ、国を発展させることができます。誰もが参加できるような仕組みを作ることによって、紛争を減らし国内の緊張を和らげるでしょう」と語った。 ソンワ氏によれば、中央アフリカ共和国では、いまだにかんがいシステムが整備されておらず、雨季に降る雨に頼る昔ながらの農法が使われている。 一方で、首都バンギでは何度も洪水が起き、年間平均700万ドルの損害が出ているとガーディアン紙は伝える。 上の写真は、アメリカ陸軍特殊部隊との会議が行われている建物を警備する中央アフリカ共和国軍の軍人だ。 ギニアビサウ ギニアビサウ政府が作った報告書は、国の大半が低地の湾岸地域で日差しが強いギニアビサウは、気候変動によって深刻な影響を被るだろうと警告している。 ギニアビサウもかんがいではなく、雨に頼って農業をしており、これがすでに問題となっている。 報告書には「気温の上昇にともない、あちこちで雨の降り方が不規則になっている。そして地表から蒸発する水蒸気の量が急激に増えたことで、農作物の生産が落ち、土壌が浸食されるようになった」と書かれている。 上の写真は、ギニアビサウの都市コントゥボエル近郊で水田を耕す農夫たちだ。 This article originally appeared on HuffPost . |
U.S.-based clearing house opens crypto trading platform for brokers and advisors
Apex Clearing Corporation, the U.S.-based clearing and custody house, has launched a cryptocurrency trading platform for broker-dealers and financial advisors to help their clients invest in cryptocurrencies more easily.
The firmannouncedthe news Thursday, saying that the Apex Crypto platform allows moving assets from a traditional investment account "in just a few clicks", opening and funding new accounts "in minutes" as compared to weeks it takes traditionally.
The crypto platform currently supports four cryptocurrencies - bitcoin (BTC), bitcoin cash (BCH), ether (ETH) and litecoin (LTC), according to the announcement. Apex said the platform is currently accessible in 40 U.S. states and the District of Columbia, with additional states expected to join in the future.
"The interest and demand for cryptocurrency continues to rise," said Edward Haravon, chief operating officer at Apex Crypto.
Apex's client, discount stock brokerage firm SogoTrade, has already rolled out the crypto platform to its U.S.-based clients and is planning to expand it for international clients in "the near future."
Apex further said that its crypto platform also allows clients to meet legal and regulatory guidelines by holding crypto assets in separate accounts. |
Looking At Cranswick plc (LON:CWK) From All Angles
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I've been keeping an eye on Cranswick plc (LON:CWK) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe CWK has a lot to offer. Basically, it is a notable dividend-paying company that has been able to sustain great financial health over the past. 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 Cranswick here.
CWK is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that CWK manages its cash and cost levels well, which is a key determinant of the company’s health. CWK's has produced operating cash levels of 6.18x total debt over the past year, which implies that CWK's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For those seeking income streams from their portfolio, CWK is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 2.2%.
For Cranswick, there are three important factors you should further research:
1. Future Outlook: What are well-informed industry analysts predicting for CWK’s future growth? Take a look at ourfree research report of analyst consensusfor CWK’s outlook.
2. Historical Performance: What has CWK's returns been like over the past? Go into more detail in the past track record analysis and take a look atthe free visual representations of our analysisfor more clarity.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of CWK? 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. |
Do Directors Own Cranswick plc (LON:CWK) Shares?
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If you want to know who really controls Cranswick plc (LON:CWK), then you'll have to look at the makeup of its share registry. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. We also tend to see lower insider ownership in companies that were previously publicly owned.
Cranswick isn't enormous, but it's not particularly small either. It has a market capitalization of UK£1.3b, which means it would generally expect to see some institutions on the share registry. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholder can tell us about CWK.
View our latest analysis for Cranswick
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.
Cranswick already has institutions on the share registry. Indeed, they own 83% of the company. 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 Cranswick, (below). Of course, keep in mind that there are other factors to consider, too.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Cranswick is not owned by hedge funds. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Shareholders would probably be interested to learn that insiders own shares in Cranswick plc. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around UK£16m worth of shares (at current prices). It is good to see this level of investment by insiders. You cancheck here to see if those insiders have been buying recently.
The general public, with a 15% 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.
It's always worth thinking about the different groups who own shares in a company. But to understand Cranswick better, we need to consider many other factors.
I like to dive deeperinto how a company has performed in the past. You can accessthisinteractive graphof past earnings, revenue and cash flow, for free.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss thisfreereport on analyst forecasts.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading. |
GLOBAL MARKETS-Asian shares slip, gold gains as Trump-Xi trade jitters build
* MSCI Asia ex-Japan drops 0.25%; Nikkei off 0.29%
* European shares seen flat at the open
* Gold firms on trade uncertainty, weak dollar
* U.S. Treasury yields remain near recent lows
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Andrew Galbraith
SHANGHAI, June 28 (Reuters) - Asian shares stumbled on Friday and gold jumped amid rising doubts that a highly anticipated meeting between U.S. President Donald Trump and Chinese President Xi Jinping this weekend could lead to an easing of trade tensions.
Uncertainty over whether the talks will produce progress in ending the year-long trade war between the world's two largest economies comes amid signs of rising risks to global growth.
European shares are expected to tread water ahead of the meeting. Financial spreadbetters see London's FTSE virtually unchanged at 7,404, Frankfurt's DAX 0.1% firmer at 12,288, and Paris' CAC 0.02% higher at 5,494 at the start of trade.
"I'm not sure the Americans can deliver what the Chinese want and the Chinese don't want to deliver what the Americans want," said Greg McKenna, strategist at McKenna Macro, adding that he sees an "extend and pretend" outcome, in which Chinese and U.S. officials agree to continue talks, as the most likely outcome of the weekend meeting.
Regardless of the outcome, McKenna said, "we will not be in a holding pattern on Monday morning."
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.25%. Japan's Nikkei stock index ended down 0.29%.
White House economic adviser Larry Kudlow said on Thursday that Trump had agreed to no preconditions for the meeting, set to take place on Saturday at the G20 summit in Japan, and is maintaining his threat to impose new tariffs on Chinese goods.
Kudlow also dismissed a Wall Street Journal report that China was insisting on lifting sanctions on Chinese telecom equipment giant Huawei Technologies Co Ltd as part of a trade deal and that the Trump administration had tentatively agreed to delay new tariffs on Chinese goods.
On Thursday, China's central bank pledged to support a slowing economy as global risks rise, ahead of the release of data that is expected to show China's factory activity shrank for a second consecutive month in June.
Chinese blue chips fell 0.64% on Friday and Hong Kong's Hang Seng lost 0.62%. Australian shares shed 0.71%.
The losses followed gains in global equity markets overnight. U.S S&P 500 e-mini stock futures wavered on Friday, trimming early gains to trade up just 0.05%.
"Central expectations for the G20 meeting between Trump and Xi are that negotiations will resume, additional U.S. tariffs will be delayed, China will buy more U.S. goods and talks over tech-trade will gain renewed focus," analysts at ANZ said in a note.
"However, as the difficulty of resolving economic aspirations between the two countries is herculean, markets remain cautious."
Seema Shah, global investment strategist at Principal Global Investors, said even if signs of progress emerge on trade, investors would quickly move on to U.S. interest rate policy.
"As the equity market is now fully pricing in a 50 basis point cut, market disappointment could be significant ... And if the Fed follows through with a cut despite a brighter trade outlook? Beyond the knee-jerk euphoria, expect minimal market reaction – this last scenario is exactly what the market is already expecting," she said in a note.
On Thursday, the S&P 500 rose 0.38% and the Nasdaq Composite added 0.73%. The Dow Jones Industrial Average eased 0.04%, dragged down by losses in Boeing Co shares following a Reuters report that the U.S. Federal Aviation Administration identified a new safety risk in the planemaker's grounded 737 MAX aircraft.
Highlighting mixed market views on the outlook for the weekend's Sino-U.S. talks, yields on benchmark 10-year Treasury notes rose to 2.0137%, compared with a U.S. close of 2.005% on Thursday, despite the reversal in equities.
The two-year yield dipped to 1.7369%, less than 4 basis points above recent lows, reflecting near certainty that the Federal Reserve will cut benchmark interest rates in July.
The dollar was 0.1% lower against the safe-haven yen at 107.67, but the euro weakened slightly, buying $1.1362.
The dollar index, which tracks the greenback against a basket of six major rivals, gained less than 0.1% to 96.232, but was still up only about 0.4% from three-month lows hit earlier this week.
In commodity markets, trade worries continued to weigh on oil, with U.S. crude losing 0.52% to $59.12 a barrel and global benchmark Brent crude down 0.68% to $66.10 per barrel.
The weak dollar and uncertainty over global trade saw gold rebound after dipping below $1,400 per ounce on Thursday. Spot gold was last traded at $1,416.19 per ounce, up 0.49%, but down from earlier highs.
(Reporting by Andrew Galbraith; Additional reporting by Stephen Culp in NEW YORK Editing by Kim Coghill and Jacqueline Wong) |
Why Godrej Agrovet Limited's (NSE:GODREJAGRO) High P/E Ratio Isn't Necessarily A Bad Thing
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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 look at Godrej Agrovet Limited's (NSE:GODREJAGRO) P/E ratio and reflect on what it tells us about the company's share price. Looking at earnings over the last twelve months,Godrej Agrovet has a P/E ratio of 29.81. That is equivalent to an earnings yield of about 3.4%.
View our latest analysis for Godrej Agrovet
Theformula for price to earningsis:
Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
Or for Godrej Agrovet:
P/E of 29.81 = ₹506.55 ÷ ₹16.99 (Based on the trailing twelve months 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.
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. Therefore, even if you pay a high multiple of earnings now, that multiple will become lower in the future. A lower P/E should indicate the stock is cheap relative to others -- and that may attract buyers.
It's nice to see that Godrej Agrovet grew EPS by a stonking 41% in the last year. And its annual EPS growth rate over 5 years is 19%. With that performance, I would expect it to have an above average P/E ratio.
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, Godrej Agrovet has a higher P/E than the average company (16.7) in the food industry.
That means that the market expects Godrej Agrovet will outperform other companies in its industry. Clearly the market expects growth, but it isn't guaranteed. So investors should delve deeper. I like to checkif company insiders have been buying or selling.
It's important to note that the P/E ratio considers the market capitalization, not the enterprise value. In other words, it does not consider any debt or cash that the company may have on the balance sheet. 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.
Net debt totals just 3.4% of Godrej Agrovet's market cap. The market might award it a higher P/E ratio if it had net cash, but its unlikely this low level of net borrowing is having a big impact on the P/E multiple.
Godrej Agrovet has a P/E of 29.8. That's higher than the average in the IN market, which is 15.4. While the company does use modest debt, its recent earnings growth is superb. So to be frank we are not surprised it has a high P/E ratio.
Investors have an opportunity when market expectations about a stock are wrong. 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.' So thisfreevisual report on analyst forecastscould hold the key to an excellent investment decision.
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. |
'Inbetweeners' star James Buckley: Struggles with anxiety make scared to leave house
Inbetweeners star James Buckley has spoken about his struggles with fame (Credit: PA) The Inbetweeners star James Buckley has revealed he is struggling with fame to the point he is considering becoming a recluse. The 31-year-old actor and father-of-two is due to appear in an upcoming episode of Doctor Who , told The Daily Star: “really, really” struggles with being recognised in public and it makes him “anxious”, “self-conscious” and “uncomfortable”. Buckley said: “I think I’m getting closer and closer to never leaving my house again. “If someone said to me: ‘I would really like to be famous,’ I would say to them: ‘You really don’t.’ Read more: Emily Atack: Inbetweeners co-star got erection filming sex scene “Because I’m struggling with it and I’m not even that famous. “I’m not anywhere near Tom Cruise or Brad Pitt or someone like that and I really, really struggle with it. It’s something I find really difficult. “Having people take secret pictures of me, it just fries my brain. “I’m just a bloke – just come talk to me. I’d love to talk to you.” View this post on Instagram A post shared by James Buckley (@buxtagram) on Jan 1, 2019 at 6:06am PST Buckley - who rose to fame at the age of 19 as class clown Jay Cartwright in the hit E4 sitcom - went on: “The price of fame, which we’re finding out more as there’s more people killing themselves, is your mental health. “And you cannot put a price on that.” The Inbetweeners two-hour reunion special, Fwends Reunited , aired in January this year, marking 10 years since the show began, but was not well received by fans, despite the tw movie spin-off being box office smash-hits. Buckley admitted he felt “pretty hated”, by the reaction the reunion episode and vowed not to take part in any more. Read more: James Buckley says Inbetweeners reunion made him look an idiot The White Gold star previously admitted that even he had struggled to watch the episode in which he and co-stars Simon Bird, Joe Thomas and Blake Harrison were interviewed by Jimmy Carr about their memories of making the show. Story continues Buckley explained: “It became a thing that wasn’t a celebration of this good thing I did in my life, it was me being taken the p*** out of for hours on end. “I got caught where I was acting up as Jay because there was an audience there of Inbetweeners fans and I got caught in this spot between Jay and myself where myself was going, ‘You’re acting like a f***ing idiot, you’re being a moron, you’re being a d***.’” If you’ve been affected by this story and want to talk to someone, you can call the Samaritans free on 116 123 or at jo@samaritans.org |
Does Greggs plc's (LON:GRG) Recent Track Record Look Strong?
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Analyzing Greggs plc's (LON:GRG) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess GRG's recent performance announced on 29 December 2018 and compare these figures to its long-term trend and industry movements.
See our latest analysis for Greggs
GRG's trailing twelve-month earnings (from 29 December 2018) of UK£66m has jumped 16% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 15%, indicating the rate at which GRG is growing has accelerated. What's enabled this growth? Let's take a look at whether it is merely because of industry tailwinds, or if Greggs has seen some company-specific growth.
In terms of returns from investment, Greggs has fallen short of achieving a 20% return on equity (ROE), recording 20% instead. However, its return on assets (ROA) of 13% exceeds the GB Hospitality industry of 5.9%, indicating Greggs has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Greggs’s debt level, has declined over the past 3 years from 26% to 26%.
Though Greggs's past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Greggs to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for GRG’s future growth? Take a look at ourfree research report of analyst consensusfor GRG’s outlook.
2. Financial Health: Are GRG’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 29 December 2018. 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. |
Is XP Power Limited (LON:XPP) A Great Dividend Stock?
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Is XP Power Limited (LON:XPP) a good dividend stock? How can we tell? Dividend paying companies with growing earnings can be highly rewarding in the long term. Yet sometimes, investors buy a popular dividend stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations.
With XP Power yielding 3.8% and having paid a dividend for over 10 years, many investors likely find the company quite interesting. It would not be a surprise to discover that many investors buy it for the dividends. Some simple analysis can reduce the risk of holding XP Power for its dividend, and we'll focus on the most important aspects below.
Click the interactive chart for our full dividend analysis
Dividends are usually paid out of company earnings. If a company is paying more than it earns, then the dividend might become unsustainable - hardly an ideal situation. Comparing dividend payments to a company's net profit after tax is a simple way of reality-checking whether a dividend is sustainable. Looking at the data, we can see that 54% of XP Power's profits were paid out as dividends in the last 12 months. 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.
We also measure dividends paid against a company's levered free cash flow, to see if enough cash was generated to cover the dividend. XP Power paid out 131% of its free cash last year. Cash flows can be lumpy, but this dividend was not well covered by cash flow. Paying out such a high percentage of cash flow suggests that the dividend was funded from either cash at bank or by borrowing, neither of which is desirable over the long term. XP Power paid out less in dividends than it reported in profits, but unfortunately it didn't generate enough free cash flow to cover the dividend. Were it to repeatedly pay dividends that were not well covered by cash flow, this could be a risk to XP Power's ability to maintain its dividend.
Remember, you can always get a snapshot of XP Power'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. For the purpose of this article, we only scrutinise the last decade of XP Power's dividend payments. This dividend has been unstable, which we define as having fallen by at least 20% one or more times over this time. During the past ten-year period, the first annual payment was UK£0.21 in 2009, compared to UK£0.85 last year. Dividends per share have grown at approximately 15% per year over this time. XP Power's dividend payments have fluctuated, so it hasn't grown 15% every year, but the CAGR is a useful rule of thumb for approximating the historical growth.
So, its dividends have grown at a rapid rate over this time, but payments have been cut in the past. The stock may still be worth considering as part of a diversified dividend portfolio.
With a relatively unstable dividend, it's even more important to see if earnings per share (EPS) are growing. Why take the risk of a dividend getting cut, unless there's a good chance of bigger dividends in 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 XP Power has grown its earnings per share at 10% per annum over the past five years. XP Power's earnings per share have grown rapidly in recent years, although more than half of its profits are being paid out as dividends, which makes us wonder if the company has a limited number of reinvestment opportunities in its business.
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. XP Power gets a pass on its dividend payout ratio, but it paid out virtually all of its cash flow as dividends. This may just be a one-off, but we'd keep an eye on this. 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, XP Power 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.
Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 4 analysts we track are forecasting for XP Powerfor freewith publicanalyst estimates 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. |
INSIGHT-Ivory Coast and Ghana team up for greater share of chocolate wealth
* Bulk of farmers live in poverty, threatening sector's future
* Ivory Coast, Ghana fix floor price at $2,600 per tonne
* Reactions to the move are divided
* Some worry it could push companies to buy beans elsewhere
* They also fear it could over-stimulate production
By Ange Aboa and Joe Bavier
EDOUKOUKRO, Ivory Coast/JOHANNESBURG, June 28 (Reuters) - K ouakou Kinimo is a pretty typical Ivory Coast cocoa farmer. He works a small holding. At 52, he's roughly the mean age for a West African grower. And, like many farmers, he doesn't want any of his six children to follow in his footsteps.
"I suffered," he said, seated beneath a tree dripping with green cocoa pods on his plantation near the border with Ghana. "I worked so hard and have nothing to show for it."
This month, Ivory Coast and Ghana - the world's top two cocoa producers - teamed up to impose a minimum floor price that chocolate companies must pay if they want to access their more than 60% share of global supply.
It's an attempt to ease pervasive farmer poverty that has become a blight on chocolate's image and a threat to the sector's future in West Africa, as young people walk away from a life of backbreaking labour with little reward.
A meeting on July 3 will hash out the details. But industry players, fair trade campaigners and even fellow producer countries are divided over whether a price fixing strategy is the answer.
While some applaud the nations' aim to use their market dominance to improve farmer incomes, others worry the strategy could push companies to buy their beans elsewhere - or over-stimulate production, leading to a global price crash.
Under the plan, Ivory Coast and Ghana will fix the floor price at $2,600 per tonne free-on-board and have announced a suspension of forward sales until the plan is put in place.
It's not the first attempt to improve the lot of farmers.
Third-party certification schemes such as Fairtrade, Rainforest Alliance and UTZ grant bonuses to growers meeting social and environmental standards. Cocoa companies have their own sustainability programmes. And Ghana and Ivory Coast both guarantee a farmer price at the start of each season.
But those measures haven't solved the problem.
"If you have a model that's based on the gross exploitation of suppliers, it simply cannot work sustainably," Edward George, an independent cocoa expert, told Reuters.
The Cocoa Barometer, a biannual report published by civil society groups, calculates that farmers receive just 6.6% of the sale price for a bar of chocolate.
And last year a Fairtrade International survey found that just 12% of Ivorian cocoa-farming households earned $2.50 per person per day, a level it calculated to be the living income benchmark.
It's a situation that angers Kinimo, who is missing a finger on his left hand, the result of an accident on his plantation.
"It's not normal at all that they, the ones eating the chocolate, set the price. The farmer should set the price," he argued. "The cars that they make, who sets the price for those? They do, and we buy them."
A FIRST STEP
Farmer advocacy groups have applauded the decision, which comes as the two neighbours seek to forge closer ties following decades of rivalry.
"The only way that cocoa sustainability is going to move from being an aspiration to a reality is this type of coordinated action on price," said Jon Walker, senior cocoa advisor at Fairtrade International.
A $2,600 floor price is still about $1,000 below the level that would have assured a living income last season, but Walker thinks it's an important first step.
Even some industry players said it was less radical than they might have feared.
"Whether you look at average prices over 10 years or since 2000, you will come out somewhere between $2,400 and $2,600, so the suggested price cannot be considered unreasonable," said Pam Thornton, a consultant with Britain's Nightingale Investment Management.
In an indication of the demand for cocoa from Ivory Coast and Ghana, trade sources said that European buyers were paying the highest premium in almost a decade over London futures in order to obtain beans.
But not everyone is happy.
The head of the cocoa association of Nigeria, the world's fourth largest exporter, accused Ghana and Ivory Coast of failing to consult other producer nations.
And while Ivory Coast and Ghana said cocoa exporters, processors and chocolate makers had signed onto the plan, several told Reuters the industry faced a fait accompli.
While the floor price currently appears feasible, many in the industry are questioning how it will work if global prices fall significantly below $2,600.
"It won't," was the response of one trader who asked not to be named.
NOT OPEC
Instituting a floor price does nothing to regulate supply, which is how OPEC influences world oil prices.
"The guy in Saudi Arabia, with one push of a button he can slow down production and reduce supply to the market. But you cannot switch off cocoa production," said Michiel Hendriksz, founder of the FarmStrong Foundation.
Cocoa output is determined by the individual decisions of millions of small farmers, decisions that are heavily influenced by bean prices.
Simply raising farmers' cocoa earnings would spur production, likely at the cost of increased deforestation. Ivorian output has already doubled to over 2 million tonnes since 2000.
With growth in global chocolate consumption sluggish, upping output could fuel a supply glut that risks seeing prices collapse, undermining the floor price's intended goal.
A deep dip in the market could force Ghana and Ivory Coast to stock beans, removing them from circulation to prop up prices.
Such an intervention, industry experts said, would be costly and difficult since neither country has adequate facilities to properly store beans long-term.
A wide, long-term gap between the floor price and prices in competing origins could also shift production elsewhere, including Latin America, cutting into the dominance of West African cocoa.
On his Ivorian cocoa farm, Kinimo has heard reports about the new floor price on the radio. He's hardly optimistic but is adopting a wait-and-see approach. After all, it's out of his hands.
"I have to do this," he said. "I don't have any other work." (Ange Aboa reported from Edoukoukro and Joe Bavier from Johannesburg; Editing by Alexandra Zavis and Anna Willard) |
Shell, Exxon eye return to Somalia ahead of oil block round
LONDON (Reuters) - Royal Dutch Shell <RDSa.L> and Exxon Mobil <XOM.N> are looking to return to Somalia ahead of an oil block bid round later this year, the East African country's oil ministry said.
Shell and Exxon Mobil had a joint venture on five offshore blocks in Somalia prior to the toppling of dictator Mohamed Siad Barre in the early 1990s.
The country has experienced instability since Barre left and is battling al Shabaab, an Islamist group that frequently carries out bombings in the capital, Mogadishu, and elsewhere in the country.
The exploration and development of the five offshore blocks was suspended in 1990 under what is known as a "force majeure", but Shell and Exxon have accrued rentals to the government since then, Shell said in a statement.
Exxon declined to comment and referred inquiries to Shell.
The country currently does not produce any oil but production could transform the economy as early stage seismic data has shown there could be significant oil reserves offshore.
"(An) agreement was signed in Amsterdam on June 21st 2019 and settles issues relating to surface rentals and other incurred obligations on offshore blocks," the ministry said.
The force majeure remains in place, regardless of the recent development, Shell added.
The parties have also agreed to hold talks to convert their old contracts in line with a new petroleum bill that was passed earlier this year.
Somalia hopes to allocate 15 offshore blocks with a potential bid date schedule for November. A road show is being organized in Houston, Texas in late September or early October.
Somalia has also passed a revenue sharing agreement, splitting revenue with oil producing states but has not yet decided on the share the government will keep in the blocks it awards.
(Reporting By Julia Payne and Ron Bousso; editing by David Evans and Emelia Sithole-Matarise) |
What Should Investors Know About XP Power Limited's (LON:XPP) Growth?
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In December 2018, XP Power Limited (LON:XPP) announced its earnings update. Overall, analysts seem cautiously bearish, as a 3.2% rise in profits is expected in the upcoming year, against the higher past 5-year average growth rate of 12%. By 2020, we can expect XP Power’s bottom line to reach UK£31m, a jump from the current trailing-twelve-month of UK£30m. Below is a brief commentary around XP Power's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you canresearch its fundamentals here.
Check out our latest analysis for XP Power
The view from 4 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. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of XPP's earnings growth over these next few years.
From the current net income level of UK£30m and the final forecast of UK£38m by 2022, the annual rate of growth for XPP’s earnings is 7.7%. EPS reaches £1.99 in the final year of forecast compared to the current £1.58 EPS today. Margins are currently sitting at 15%, which is expected to expand to 17% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For XP Power, there are three relevant 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 XP Power 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 XP Power is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of XP Power? 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. |
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