South African stock report - Naspers

SAFR

Naspers increases June 23, 2017 17:00 SAST

NEWS BITES - AFRICA

Naspers Limited (J:NPN), South Africa's largest Media company by market cap, has increased ZAR21.53 (0.8%) from its last trading session of June 22 to close at ZAR2,593.33. Compared with the FTSE/JSE- Africa Top 40 Index which rose 414.0 points (0.9%) in the day, the relative price change was -0.1%. The volume was 0.7 times the average daily trading volume of 1.4 million shares.

SECTION 1

NASPERS BULLISH SIGNALS

1.1 Fundamentals:

+ Economic Value Added defined by Net Operating Profit After Tax of $US1.1 billion less Cost of Capital of $US101.3 million was $US1 billion. The multiple EVA/Cost of Capital was exemplary at 10.2 times.

+ Net profit margin has averaged 14.6% in the last 3 years. This is better than the sector average of 14.3% and suggests a high margin of safety.

+ As per the Du Pont analysis, Return on Equity of 9.8% is better than sector average of 9.7%. This is computed as net profit margin of 16.9% times asset turnover [sales/assets] of 0.35 times leverage factor [total assets/shareholders' equity] of 1.6.

1.2 Technicals:

Uptrend: The stock rose on high volatility today and expanding price range.

+ In the last three months the stock has hit a new 52-week high twelve times, pointing to a significant uptrend.

+ The present value of ZAR1,000 (PV1000) invested one year ago in Naspers is ZAR1,163, comprising a capital gain of ZAR161 and dividend reinvested of ZAR2.

PV10001-week1-month1-year
NPN.J9281,163
FTSE/JSE- Africa Top 40 Index1,019976956

+ The present value of ZAR1,000 (PV1000) invested five years ago in Naspers is ZAR5,708, including a capital gain of ZAR4,616 and dividend reinvested of ZAR92.

+ 5 years Multiplier in ZAR = 5.708x

+ Compound Annual Growth Rate (CAGR) in ZAR = 41.7%

Present Value of USD1,000 invested 5 years ago:

+ The present value of USD1,000 (PV1000) invested five years ago in Naspers is $US3,676, including a capital gain of $US2,617 and dividend reinvested of $US59.

+ 5 years ago USD 1 equalled ZAR 8.3963

+ 5 years Multiplier in USD = 3.676x

+ Compound Annual Growth Rate (CAGR) in USD = 29.7%

Jun 23, 2017: USD 1 equals ZAR 13.04

1.3 High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverZAR2.5 billion (US$194.9 million)In Top 1%
Price/MAP2001.12In Top Quartile
Price/MAP500.99In Top Quartile

SECTION 2

NASPERS BEARISH SIGNALS

2.1 Fundamentals:

+ The relative yield of the stock, defined by its yield of 0.2%, divided by average yield of dividend yielding stocks in the FTSE/JSE- Africa Top 40 Index of 1.5% is 11.2%. This suggests the stock is overvalued in dividend yield terms.

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 5.2. Compared with the rest of the market the stock is overvalued and ranks in the bottom 2% of stocks by value of Q Ratio.

5-years average annualized earnings growth rate of 3.1%

+ 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 0.2% [0.2%].

2.3 Low Performance Indicator:

DescriptionValueRank In Market
Price to Sales14.8In Bottom 3%

SECTION 3

PRICE VOLUME DYNAMICS

3.1 Technicals:

+ Volume: there were 979,930 shares worth ZAR2.5 billion (US$194.9 million) traded today.

+ Naspers is at a discount of 8.9% to its 12-month high of ZAR2,846.50 on May 22. It is also at a premium of 34.6% to the 12-month low of ZAR1,925.98 on December 07, 2016.

3.2 Moving Annual Return

NPNClose (ZAR)Dividends (ZAR)Capital Gain %% YieldAnnual Return %
June 232,593.334.4216.10.216.3
1 Yr ago2,233.26417.70.217.9

3.3 Beta:

+ Beta: the Beta of Naspers stock is 1.4. 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 59.4% (or a turnover period of 1 year 8 months). This average length of ownership of the stock at 0.9 times the average holding period of 1 year 11 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 47,450 stocks] and Rank in the Middle East & Africa Region [out of 2,287 stocks]

DescriptionValueGlobal RankIn MEA Region
MCap (US$)87.1B1161
Total Assets (US$)16.7B1,81573
Revenue (US$)5.9B1,91730
Net Profit (US$)994M95528
Return on Equity %9.812,865814
Net Profit Margin %16.96,697548
Price to Book13.831,8221,571
Price/Earnings85.520,1581,132
Yield %0.219,414946
PV$1000 (1Year) US$*1,31412,743382
US$* Change (1Year) %28.812,182355

* 1 year ago USD 1 = ZAR 14.62

Jun 23, 2017: USD 1 equals ZAR 13.04

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 55/240 in BSS News Bites' ranking of South African performers in the past year, a percentile ranking of 77.

SECTION 5

NASPERS FINANCIALS

5.1 Financials Summary

Year endedMar 2016Mar 2015Mar 2014
Sales (USD B)5.96.67
Pretax (USD)1.3B1.6B889.6M
Net (USD)994M1.3B542.9M
EPS (USD)2.323.051.3386

5.2 Annual Report for the year ended March 31, 2016 (year-on-year comparisons with previous corresponding period)-

Naspers Net Profit down 20.9%

Favourable Changes:

+ Total liabilities to Total assets down 23.4% from 0.5 to 0.4.

+ Current ratio up 27.4% from 1.2 to 1.6.

+ Working capital to total assets up from 4.0% to 7.1%.

+ Cash to Total Assets up from 9.5% to 10.2%.

Unfavourable Changes:

+ Net profit slumps 20.9% from $US1.3b to $US994.0m

+ EPS slumps 23.9% from $US3.05 to $US2.32.

+ EBIT Margin down from 28.1% to 26.2%.

+ Interest cover down 28.8% from 7.5 to 5.3.

+ EBIT to total assets down from 14.3% to 9.3%.

+ Total revenue to total assets down from 0.5 to 0.4.

+ Sales and marketing expenses to Sales up from 38.4% to 40.9%.

+ Profit before tax to Sales down from 24.3% to 21.3%.

+ Interest expenses to Sales up from 3.8% to 4.9%.

+ Retained earnings to total assets down from 40.8% to 36.5%.

+ Long-term investments to Total Assets down from 49.2% to 47.2%.

+ Total current assets to Total Assets down from 20.9% to 19.4%.

Note:

+ Cost of Goods Sold to Sales down from 58.2% to 57.2%.

+ Tax expenses to Sales down from 5.1% to 4.4%.

+ Total non-current assets to Total Assets up from 79.1% to 80.6%.

+ Intangibles to Total Assets up from 18.1% to 24%.

5.3 Trailing 12 Months Dividends

Trailing 12 Months ToValue (ZAR)
23 Jun 20174.42
23 Jun 20164
23 Jun 20153.61
23 Jun 20143.27
23 Jun 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
Industry GroupMedia & Publishing
Economic SectorConsumer Cyclicals
Business SectorCyclical Consumer Services

6.3 Issued Capital

Based on 437,876,000 issued shares the market capitalisation is ZAR1,135.6 billion (US$87.1 billion).

SECTION 7

REPORTED BUYING AND SELLING

Insider Buying and Selling

Reported Buying:

January 04: Naspers director buys

Naspers (J:NPN) director Mark Sorour bought 245 shares worth ZAR494,407 ($US35,498) on December 30, 2016. The purchase price was ZAR2,017.99. The shares hit a one-month high on the day.

Reported 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

Corporate Wire

To view Recent Company Headlines, click here

June 15: Naspers Limited - Trading Statement

June 02: Naspers: Why business leaders should embrace Artificial Intelligence

June 01: Naspers: Markafoni announces closure

April 03: Naspers Limited - Update On Media24 Proprietary Limited Competition Appeal Court Ruling Announcement

April 03: Naspers Limited - Update On Media24 Proprietary Limited Competition Appeal Court Ruling Announcement

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