South African stock report - Naspers

SAFR

Naspers in its biggest weekly gain in 2 months as investors eye AGM August 18, 2017 17:00 SAST

NEWS BITES - AFRICA

Naspers Limited (J:NPN), South Africa's largest Media company by market cap, has increased ZAR12.93 (0.4%) from its last trading session of August 17 to close at ZAR2,893.67. Compared with the FTSE/JSE- Africa Top 40 Index which fell 135.9 points (0.3%) in the day, the relative price increase was 0.7%. The volume was 0.7 times the average daily trading volume of 1.4 million shares. In the past week the shares have climbed 5.5%, the biggest weekly gain since July 13.

UPCOMING EVENT: AGM

The annual general meeting (AGM) will be held on Friday, August 25.

SECTION 1

NASPERS BULLISH SIGNALS

1.1 Fundamentals:

+ Total Liabilities/EBITDA of 2 is comfortably below the Joseph Piotroski benchmark of 5.

+ Interest cover defined by EBIT/I is 12 times. This indicates it is less leveraged.

+ Net profit margin has averaged 27.4% in the last 3 years. This is considered superior and suggests a high margin of safety.

1.2 Technicals:

+ The price climbed 5.5% in the last week and jumped 6.7% in the last month.

+ Compared with the FTSE/JSE- Africa Top 40 Index which rose 0.3% for the week and 4.3% for the month, this represented a relative price increase for Naspers stock of 5.2% for the week and 2.4% for the month.

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 2,857.84 minus the 26-day EMA of 2,813.82 is positive 44.02 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.

+ Rises to Falls: in the past month the number of rises outnumbered falls 15:8 or 1.9:1.

+ The present value of ZAR1,000 (PV1000) invested one year ago in Naspers is ZAR1,285, comprising a capital gain of ZAR283 and dividend reinvested of ZAR2.

PV10001-week1-month1-year
NPN.J1,0551,0671,285
FTSE/JSE- Africa Top 40 Index1,0031,0071,062

+ The present value of ZAR1,000 (PV1000) invested five years ago in Naspers is ZAR5,926, including a capital gain of ZAR4,831 and dividend reinvested of ZAR96.

+ 5 years Multiplier in ZAR = 5.926x

+ Compound Annual Growth Rate (CAGR) in ZAR = 42.7%

Present Value of USD1,000 invested 5 years ago:

+ The present value of USD1,000 (PV1000) invested five years ago in Naspers is $US3,705, including a capital gain of $US2,645 and dividend reinvested of $US60.

+ 5 years ago USD 1 equalled ZAR 8.3126

+ 5 years Multiplier in USD = 3.705x

+ Compound Annual Growth Rate (CAGR) in USD = 29.9%

Aug 18, 2017: USD 1 equals ZAR 13.3

1.3 High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverZAR3 billion (US$226.3 million)In Top 1%
Price/MAP2001.22In Top 5%
Price/MAP501.07In Top 7%
Return on Assets [ROA] %12.8In Top Quartile
EBITDA Margin %54.6In Top Quartile
Volatility %1.2In Top Quartile

SECTION 2

NASPERS BEARISH SIGNALS

2.1 Fundamentals:

+ The relative yield of the stock, defined by its yield of 0.1%, divided by average yield of dividend yielding stocks in the FTSE/JSE- Africa Top 40 Index of 1.4% is 10.7%. This suggests the stock is overvalued in dividend yield terms.

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 4.4. Compared with the rest of the market the stock is overvalued and ranks in the bottom 2% of stocks by value of Q Ratio.

+ As per the Du Pont analysis, Return on Equity of 18.0% is lower than sector average of 19.5%. This is computed as net profit margin of 46.0% times asset turnover [sales/assets] of 0.46 times leverage factor [total assets/shareholders' equity] of 1.5.

+ Revenue growth rate has shown signs of deterioration in recent years. [Year ended, all figures in %]

YearRevenue GrowthEPS Growth
Mar 16-9.7-23.9
Mar 1510.9-

2.2 Overvaluation [compared with sector average]:

+ Dividend yield of 0.1% [0.2%].

2.3 Technicals:

+ The 1.6% discount to 12-month high of ZAR2,939.97 against the 50.2% premium to 12-month low of ZAR1,925.98 suggests the climb might be peaking.

2.4 Overbought/Bearish/Resistance Signals:

+ The stock is overbought according to the Williams % R indicator of -19.9, suggesting the price is close to its 14-day high of ZAR2,934.0.

2.5 Low Performance Indicator:

DescriptionValueRank In Market
Price to Sales9.4In Bottom 5%

SECTION 3

PRICE VOLUME DYNAMICS

3.1 Moving Annual Return

NPNClose (ZAR)Dividends (ZAR)Capital Gain %% YieldAnnual Return %
August 182,893.674.4228.30.228.5
1 Yr ago2,255.1432.30.232.5
2 Yrs ago1,704.563.6126.30.326.6
3 Yrs ago1,349.223.2757.70.458.0
4 Yrs ago855.753.0372.40.673.0

3.2 Beta:

+ Beta: the Beta of Naspers stock is 1.2. A Beta greater than 1 suggests this is a high risk, high return stock with volatility greater than that of the market.

3.3 Aggregate Volumes, Prices and Turnover Period:

[Volume Index or VI in brackets; 1 is average]

+ Johannesburg: NPN.J 1,040,000 [VI of 0.7] volume 99.67% of aggregate. Price: ZAR2,893.67.

+ OTCBB: NAPRF.OTCBB 3,379 [VI of 4.4] volume 0.32% of aggregate. Price: $US218.0. Using the current exchange rate of USD1 equals 13.1838ZAR, The shares are at a 0.7% discount to the close price on Johannesburg.

+ Aggregate volume: there were 1 million shares of Naspers worth ZAR3 billion traded today. The aggregate volume was 0.7 times average trading of 1.4 million shares.

The turnover rate in the 12 months to date was 53.8% (or a turnover period of 1 year 10 months). This average length of ownership of the stock at 0.9 times the average holding period of 2 years 33 days for stocks in the FTSE/JSE- Africa Top 40 Index suggests a larger number of speculators on the share register, making it less safe for long-term investors.

SECTION 4

RANKING

4.1 Global Rank [out of 47,594 stocks] and Rank in the Middle East & Africa Region [out of 2,285 stocks]

DescriptionValueGlobal RankIn MEA Region
MCap (US$)95.3B972
Total Assets (US$)21.9B1,57261
Revenue (US$)10.2B1,31915
Net Profit (US$)2.9B3209
Return on Equity %18.05,245325
Net Profit Margin %46.02,223187
Price to Book8.428,5401,585
Yield %0.120,2781,096
PV$1000 (1Year) US$*1,29110,680357
US$* Change (1Year) %32.79,988321

* 1 year ago USD 1 = ZAR 13.51

Aug 18, 2017: USD 1 equals ZAR 13.3

4.2 Independent Ratings

Naspers Limited is the 332nd largest by revenue in the FT Global 500.

It was ranked 378 by Newsweek and Corporate Knights Capital in the World's 500 Greenest Companies 2016. It had outstanding scores of 1.6% in Carbon productivity, 31% in Energy productivity.

It is the 1225th largest by revenue in the Forbes Global 2000.

It is placed 32/231 in BSS News Bites' ranking of South African performers in the past year, a percentile ranking of 86.

SECTION 5

NASPERS FINANCIALS

5.1 Financials Summary

Year endedMar 2017Mar 2016Mar 2015
Sales (USD B)10.27.76.6
Pretax (USD B)3.11.31.6
Net (USD)2.9B994M1.3B
EPS (USD)--3.05

5.2 Annual Report for the year ended March 31, 2017 (year-on-year comparisons with previous corresponding period)-

Favourable Changes:

+ Total revenue up 31.8% from $US7.7b to $US10.2b.

+ EBIT to total assets up from 9.3% to 15.2%.

+ Profit before tax to Sales up from 21.3% to 50%.

+ Interest expenses to Sales down from 4.9% to 4.6%.

+ Debt to Equity down 23.7% from 0.4 to 0.3.

+ Total liabilities to Total assets down 16.7% from 0.4 to 0.3.

+ Current ratio up 22.2% from 1.6 to 1.9.

+ Working capital to total assets up from 7.1% to 12.4%.

+ Retained earnings to total assets up from 36.5% to 43.3%.

+ Long-term investments to Total Assets up from 46.9% to 49.5%.

+ Total current assets to Total Assets up from 19.4% to 25.7%.

+ Total Liabilities to EBITDA of 2.0 compares favourably with the Joseph Piotroski benchmark of <5. This ratio has improved by 49.6% from the previous year's ratio of 3.9.

Unfavourable Changes:

+ Operating Cash Flow is negative.

+ Cost of Goods Sold to Sales up from 57.2% to 58.6%.

+ Sales and marketing expenses to Sales up from 40.9% to 46.4%.

+ Total non-current assets to Total Assets down from 80.6% to 74.3%.

+ Fixed Assets to Total Assets down from 8.6% to 7.5%.

Note:

+ Total revenue to total assets steady at 0.5.

+ Tax expenses to Sales down from 4.4% to 4%.

+ Intangibles to Total Assets down from 24% to 16.2%.

5.3 Trailing 12 Months Dividends

Trailing 12 Months ToValue (ZAR)
18 Aug 20174.42
18 Aug 20164
18 Aug 20153.61
18 Aug 20143.27
18 Aug 20133.03

SECTION 6

NASPERS PROFILE

6.1 Activities

Naspers operates, through its subsidiaries, in the areas of pay-television, internet, instant messaging subscriber platforms, publishing of magazines, newspapers and books and private education services. These activities are conducted in South Africa, sub-Saharan Africa, Greece, Cyprus, Brazil, Russia, China, Netherlands and USA.

6.2 Industry & Sector

Classification LevelName of Sector
Business SectorCyclical Consumer Services
Industry GroupMedia & Publishing
Economic SectorConsumer Cyclicals

6.3 Issued Capital

Based on 437,876,000 issued shares the market capitalisation is ZAR1,267.1 billion (US$95.3 billion).

SECTION 7

REPORTED BUYING AND SELLING

Insider Selling

February 24: Naspers director sells

Naspers (J:NPN) director Mark Sorour sold 40,795 shares worth ZAR894,001 ($US69,374) on February 23. The selling price was ZAR21.91. The shares hit a six-day low on the day.

SECTION 8

STOCK BUZZ

8.1 Merger

August 04: Naspers Limited - Competition Tribunal Approval Media24: Novus Merger

Naspers shareholders are referred to the SENS announcement released on 3 April 2017 in which they were advised that the Competition Commission had recommended Media24 Proprietary Limited's ("Media24") merger filing concerning Novus Holdings Limited ("Novus") ("Merger Filing") to the Competition Tribunal for approval. The Merger Filing includes a condition that Media24 divest itself of the majority of its shareholding in Novus whilst permitting Media24 to retain a non-controlling minority stake in Novus of 19% ("Merger Condition").

Source: Sharenet

8.2 Corporate Wire

To view Recent Company Headlines, click here

August 02: Naspers Limited - Adr Ratio Change

The Company is announcing a ratio change on its American Depositary Receipt ("ADR") programme from ten (10) ADRs representing one (1) Class N ordinary share to the new ratio of five (5) ADRs representing one (1) Class N ordinary share.

The ratio change will result in a reverse split on the ADRs on the basis of one (1) new ADR for every two (2) old ADRs held.

July 25: Naspers Limited - Director Dealing In Securities - Update

Further to the announcement released on SENS on 21 July 2017, the sale of securities was effected on-market. All details disclosed below remain unchanged.

July 21: Naspers announces AGM

Naspers has announced its Annual General Meeting will take place on Friday, August 25.

June 30: Naspers Limited - Bond Offering By Myriad International Holdings B.v.

Shareholders are advised that Naspers's indirect wholly owned subsidiary, MIH B.V., on 29 June 2017, successfully priced US$1bn 4.85% notes due 2027 (the "Bonds").

The Bonds will be fully and unconditionally guaranteed by Naspers. An application has been made for the admission of the Bonds to listing on the Official List and trading on the Global Exchange Market of the Irish Stock Exchange.

Contact: (27 21) 406 2121

Physical Address: 40 Heerengracht Cape Town, 8001 South Africa

State/Province/Country: South Africa

Exchange: Johannesburg Stock Exchange (JSE)

ISIN: ZAE000015889

J:NPN; JNB:NPN; SJ:NPN; NPNJn.J

PermID: 4295888592

Source: www.BuySellSignals.com