South African stock report - Naspers

SAFR

Naspers in its biggest weekly gain in 3 weeks October 20, 2017 17:00 SAST

NEWS BITES - AFRICA

Naspers Limited (J:NPN), South Africa's largest Media company by market cap, has increased ZAR52.75 (1.6%) from its last trading session of October 19 to close at ZAR3,301.12. Compared with the FTSE/JSE- Africa Top 40 Index which rose 75.1 points (0.1%) in the day, the relative price increase was 1.5%. The volume was 0.5 times the average daily trading volume of 1.4 million shares. In the past week the shares have lifted 3.7%, the biggest weekly gain since October 05.

Highlights in today's Report:

SECTION 1 BULLISH SIGNALS

Fundamentals, Technicals, High Performance Indicators

SECTION 2 BEARISH SIGNALS

Fundamentals, Overvaluation [compared with sector average], Technicals, Overbought/Bearish/Resistance Signals, Low Performance Indicator

SECTION 3 PRICE VOLUME DYNAMICS

Momentum, Moving Annual Return, Beta, Turnover Rate & Turnover Period

SECTION 4 RANKING

Global, Independent Ratings

SECTION 5 FINANCIALS

Financials Summary, Annual Report for the year ended March 31, 2017 (year-on-year comparisons with previous corresponding period)-, Trailing 12 Months Dividends

SECTION 6 PROFILE

Activities, Industry & Sector, Issued Capital

SECTION 7 STOCK BUZZ

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 lifted 3.7% in the last week and soared 10.8% in the last month.

+ Compared with the FTSE/JSE- Africa Top 40 Index which rose 0.3% for the week and 4.1% for the month, this represented a relative price increase for Naspers stock of 3.4% for the week and 6.7% for the month.

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 3,201.54 minus the 26-day EMA of 3,113.46 is positive 88.09 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 15:7 or 2.1:1.

+ The present value of ZAR1,000 (PV1000) invested one year ago in Naspers is ZAR1,402, comprising a capital gain of ZAR399 and dividend reinvested of ZAR2.

PV10001-week1-month1-year
NPN.J1,0371,1081,402
FTSE/JSE- Africa Top 40 Index1,0031,0451,150

+ The present value of ZAR1,000 (PV1000) invested five years ago in Naspers is ZAR6,177, including a capital gain of ZAR5,104 and dividend reinvested of ZAR73.

+ 5 years Multiplier in ZAR = 6.177x

+ Compound Annual Growth Rate (CAGR) in ZAR = 43.9%

Present Value of USD1,000 invested 5 years ago:

+ The present value of USD1,000 (PV1000) invested five years ago in Naspers is $US3,906, including a capital gain of $US2,860 and dividend reinvested of $US46.

+ 5 years ago USD 1 equalled ZAR 8.6505

+ 5 years Multiplier in USD = 3.906x

+ Compound Annual Growth Rate (CAGR) in USD = 31.3%

Oct 20, 2017: USD 1 equals ZAR 13.68

1.3 High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverZAR2.4 billion (US$177 million)In Top 1%
Price/MAP2001.28In Top 5%
Price/MAP501.1In Top 5%
Return on Assets [ROA] %12.8In Top Quartile
Volatility %1.0In Top Quartile
% Prem to Vol Wtd Price7.2In Top Quartile
Price Change %1.6In Top Quartile
EBITDA Margin %54.6In 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 10.4%. This suggests the stock is overvalued in dividend yield terms.

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 4.9. 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 0.4% discount to 12-month high of ZAR3,315.0 against the 71.4% premium to 12-month low of ZAR1,925.98 suggests the climb might be peaking.

2.4 Overbought/Bearish/Resistance Signals:

+ The Relative Strength Index (RSI) of 89.7 has penetrated the overbought line of 70, suggesting the price gain of 8% in the last 14 days is unusually high.

+ The stock is overbought according to the Williams % R indicator of -4.5, suggesting the price is close to its 14-day high of ZAR3,315.0.

2.5 Low Performance Indicator:

DescriptionValueRank In Market
Price to Sales10.5In Bottom 4%

SECTION 3 PRICE VOLUME DYNAMICS

3.1 Momentum:

+ Volume: there were 733,660 shares worth ZAR2.4 billion (US$177 million) traded today. In the past week, volume was 0.7 times average and the shares were up 3.7%. The volume was 0.5 times the average daily trading volume of 1.4 million shares.

3.2 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has consistently exceeded 21%.

NPNClose (ZAR)Dividends (ZAR)Capital Gain %% YieldAnnual Return %
Oct 203,301.124.6439.90.240.1
1 Yr ago2,3594.4221.20.221.5
2 Yrs ago1,9464600.360.3
3 Yrs ago1,216.273.6128.30.428.7
4 Yrs ago9483.2775.30.675.9

Close 5 years ago ZAR540.80

3.3 Beta:

+ Beta: the Beta of Naspers stock is 1.3. A Beta greater than 1 suggests this is a high risk, high return stock with volatility greater than that of the market.

3.4 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 47.2% (or a turnover period of 2 years 44 days). This average length of ownership of the stock at 0.9 times the average holding period of 2 years 3 months 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 47,824 stocks] and Rank in the Middle East & Africa Region [out of 2,304 stocks]

DescriptionValueGlobal RankIn MEA Region
MCap (US$)105.8B931
Total Assets (US$)21.9B1,59660
Revenue (US$)10.2B1,33615
Net Profit (US$)2.9B3259
Return on Equity %18.05,318324
Net Profit Margin %46.02,238188
Price to Book9.230,0241,523
Yield %0.120,8591,142
PV$1000 (1Year) US$*1,4358,656304
US$* Change (1Year) %43.38,478299

* 1 year ago USD 1 = ZAR 13.95

Oct 20, 2017: USD 1 equals ZAR 13.68

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 24/239 in BSS News Bites' ranking of South African performers in the past year, a percentile ranking of 90.

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

Sales was up 54.8% from US$6.6 billion to US$10.2 billion and Net profit was up 132.4% from US$1.3 billion to US$2.9 billion.

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)
20 Oct 20174.64
20 Oct 20164.42
20 Oct 20154
20 Oct 20143.61
20 Oct 20133.27

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
Industry GroupMedia & Publishing
Economic SectorConsumer Cyclicals
Business SectorCyclical Consumer Services

6.3 Issued Capital

Based on 438,640,000 issued shares the market capitalisation is ZAR1,448 billion (US$105.8 billion).

SECTION 7 STOCK BUZZ

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September 29: Naspers Limited - Correction Of The Apportionment Ratio For South African Income Tax Purposes In Respect Of The Novus Unbundling

Naspers "N" shareholders ("Shareholders") are referred to the announcement released on SENS on Thursday, 21 September 2017 regarding the apportionment of the tax cost for South African income tax purposes in respect of the unbundling of Novus Holdings Limited ("Novus") shares ("Unbundling").

Shareholders are hereby advised that the revised apportionment ratio is as follows, 99.93372% to a Naspers "N" share held after the Unbundling and 0.06628% to an unbundled Novus share.

September 28: Naspers Limited - Dealings In Securities

In compliance with Rules 3.63 - 3.74 of the JSE Listings Requirements, the following information is disclosed:-

September 28: Naspers Limited - Increased Stake In Delivery Hero

Naspers today announced a transaction to obtain 22,359,857 shares in Delivery Hero (FRA: DHER.GR) from Rocket Internet (FRA: RKET.GR) for EUR660m (US$775m) at a price of EUR29.50 per share.

The additional 13% stake increases Naspers's shareholding to 23.6% and positions the group as the largest shareholder in Delivery Hero.

Growing its position in online food ordering and delivery is consistent with Naspers' strategy to invest in platforms with global potential that offer online marketplace services in high- growth markets.

September 27: Naspers Limited - Placement Of Novus Shares

1. Introduction

Naspers "N" and "A" shareholders ("Naspers Shareholders") are referred to the announcement released on SENS on 5 September 2017 ("Detailed Announcement") in terms of which Naspers Shareholders were advised that the Company will unbundle 151,786,287 Novus Holdings Limited ("Novus") shares ("Unbundled Novus Shares") to Naspers Shareholders ("Unbundling").

September 27: Naspers Limited - Results Of The Accelerated Bookbuild

Further to the announcement released by Naspers on SENS on 26 September 2017 regarding the launch of an accelerated bookbuild placing (the "Placing") of Novus Holdings Limited ("Novus") shares ("Unbundled Novus Shares").

Naspers is pleased to announce that the Placing was successfully priced on 26 September 2017 and 35,141,309 Unbundled Novus Shares were placed with qualifying institutional investors at a price of R6.15 per ordinary share ("Placing Price").

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