Australian stock report - ANZ Banking Group

AUSTR

UPDATE: Australia and New Zealand Banking rises with rising open interest January 15, 2018 16:00 AEST

NEWS BITES - AUSTRALIA

Australia and New Zealand Banking Group Limited (ASX:ANZ), Australia's 3rd largest Bank by market cap, has increased 13.0c (0.5%) from its last trading session of January 12 to close at $A28.65. Compared with the All Ordinaries Index which rose 9.7 points (0.2%) in the day, the relative price increase was 0.3%. The volume was 0.6 times the average daily trading volume of 5.5 million shares. The stock's open interest climbed 4.2% from 216,848 to 225,960. Combined with the price increase, this suggests a strong stock price.

Highlights in today's Report:

SECTION 1 BULLISH SIGNALS

Fundamentals, Undervaluation [compared with sector average], Technicals, Short Selling and Open Interest, High Performance Indicators

SECTION 2 BEARISH SIGNALS

Fundamentals, Overvaluation [compared with sector average], Technicals, Low Performance Indicators

SECTION 3 PRICE VOLUME DYNAMICS

Technicals, Moving Annual Return, Beta, Aggregate Volumes, Prices and Turnover Period

SECTION 4 RANKING

Global, Independent Ratings

SECTION 5 FINANCIALS

Financials Summary, Annual Report for the year ended September 30, 2017 (year-on-year comparisons with previous corresponding period)-, Trailing 12 Months Dividends

SECTION 6 CORPORATE BONDS

Key Statistics, Yield Curve - Australia and New Zealand Banking Bond vs US Treasury

SECTION 7 PROFILE

Activities, Industry & Sector, Top Management, Issued Capital

SECTION 8 STOCK BUZZ

SECTION 1 AUSTRALIA AND NEW ZEALAND BANKING BULLISH SIGNALS

1.1 Fundamentals:

+ The P/E of 13 multiplied by the P/NTA of 1.6 is 21.1. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.

+ The relative yield of the stock, defined by its yield of 5.6%, divided by average yield of dividend yielding stocks in the All Ordinaries Index of 4.2% is 133.2%. This suggests the stock is undervalued in dividend yield terms.

+ Net profit margin has averaged 21.9% in the last 3 years. This is considered superior and suggests a high margin of safety.

+ Brandirectory have estimated Australia and New Zealand Banking brand value at $A7.4 billion. The Brand Value represents 1.2% of the estimated Enterprise Value of $A612.9 billion.

1.2 Undervaluation [compared with sector average]:

+ Price to Book of 1.6 [2.0]. We estimate Australia and New Zealand Banking stock is trading at a current year Price to Book of 1.6 and a forward year Price to Book of 1.5.

1.3 Technicals:

+ The present value of AUD1,000 (PV1000) invested thirty years ago in Australia and New Zealand Banking is $A40,115, including a capital gain of $A14,316 and dividend reinvested of $A24,799.

+ 30 years Multiplier in AUD = 40.115x

+ Compound Annual Growth Rate (CAGR) in AUD = 13.0%

Present Value of USD1,000 invested 30 years ago:

+ The present value of USD1,000 (PV1000) invested thirty years ago in Australia and New Zealand Banking is $US43,730, including a capital gain of $US16,148 and dividend reinvested of $US26,581.

+ 30 years ago AUD 1 equalled USD 0.7081

+ 30 years Multiplier in USD = 43.73x

+ Compound Annual Growth Rate (CAGR) in USD = 13.3%

Jan 15, 2018: AUD 1 equals USD 0.79

1.4 Short Selling and Open Interest:

+ The current short volume is 0.4 times its own historical average of 0.04%. It plummeted 11.5% from the previous day, plummeted 16.0% from a week ago, a bullish indicator.

+ Open interest hit an 11-day high.

Open Interest Trend

Same day trend: The price increased 0.5% from $A28.52 to $A28.65; Open interest has climbed 4.2% from 216,848 to 225,960. A price rise combined with an increase in open interest suggests there is new money coming into the market from existing or new buyers. This is a bullish signal.

DurationOpen Interest change %Price change %Interpretation
1-day4.20.5Strong Market

1.5 High Performance Indicators:

DescriptionValueRank In Market
Today's Turnover$A95.1 millionIn Top 1%
Volatility %0.6In Top 7%

SECTION 2 AUSTRALIA AND NEW ZEALAND BANKING BEARISH SIGNALS

2.1 Fundamentals:

+ Total Liabilities/EBITDA of 87.1 which compares unfavourably with the Joseph Piotroski benchmark of 5.

+ As per the Du Pont analysis, Return on Equity of 10.9% is lower than sector average of 12.0%. This is computed as net profit margin of 22.1% times asset turnover [sales/assets] of 0.03 times leverage factor [total assets/shareholders' equity] of 15.2.

2.2 Overvaluation [compared with sector average]:

+ Return on Equity 10.9% [12.3%].

+ Return on Assets 0.7% [0.8%].

2.3 Technicals:

+ The price decreased 0.6% in the last week and 0.1% in the last month.

2.4 Low Performance Indicators:

DescriptionValueRank In Market
Total Debt to Equity10.1In Bottom 1%
Return on Assets [ROA] %0.7In Bottom 5%

SECTION 3 PRICE VOLUME DYNAMICS

3.1 Technicals:

+ Australia and New Zealand Banking is at a discount of 8.3% to its 12-month high of $A31.24 on May 01, 2017. It is also at a premium of 8.2% to the 12-month low of $A26.47 on June 07, 2017.

+ The present value of $A1,000 (PV1000) invested one year ago in Australia and New Zealand Banking is $A1,040, comprising a capital loss of $A15 and dividend reinvested of $A54.

PV$10001-week1-month1-year
ANZ.ASX9949991,040
All Ordinaries Index9921,0031,071

3.2 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 4 of the last 5 years. An investment a year ago in ANZ would have produced a return of 4.0%.

ANZClose (AUD)Dividends (AUD)Capital Gain / (Loss) %% YieldAnnual Return %
Jan 1528.651.6(1.5)5.54.0
1 Yr ago29.081.630.17.237.3
2 Yrs ago22.351.81(19.4)6.5(12.9)
3 Yrs ago27.731.787.66.914.5
4 Yrs ago25.771.6428.68.236.8

Close 5 years ago $A20.04

3.3 Beta:

+ Beta: the Beta of Australia and New Zealand Banking 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 Aggregate Volumes, Prices and Turnover Period:

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

+ ASX: ANZ.ASX 3,320,144 [VI of 0.6] volume 99.94% of aggregate. Price: $A28.65.

+ New Zealand: ANZ.NZSX 1,665 [VI of 0.1] volume 0.05% of aggregate. Price: $NZ31.30. Using the current exchange rate of NZD1 equals 0.9163AUD, The shares are at a 0.1% premium to the close price on ASX.

+ Aggregate volume: there were 3.3 million shares of Australia and New Zealand Banking worth $A95.2 million traded today. The aggregate volume was 0.6 times average trading of 5.5 million shares.

The turnover rate in the 12 months to date was 48.9% (or a turnover period of 2 years 15 days). This average length of ownership of the stock at 1.2 times the average holding period of 1 year 9 months for stocks in the All Ordinaries 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 47,407 stocks] and Rank in the Asia Pacific Region [out of 2,078 stocks]

DescriptionValueGlobal RankIn APAC Region
MCap (US$)66.8B1835
Total Assets (US$)707.1B1242
Revenue (US$)22.9B6198
Net Profit (US$)5B1874
Return on Equity %10.911,995395
Net Profit Margin %22.15,192229
Price to Book1.616,303624
Price/Earnings13.06,630283
Yield %5.63,442166
PV$1000 (1Year) US$*1,07624,5881,047
US$* Change (1Year) %1.825,4851,062

* 1 year ago AUD 1 = USD 0.75

Jan 15, 2018: AUD 1 equals USD 0.79

4.2 Independent Ratings

+ S&P Global Market Intelligence 100:

Australia and New Zealand Banking Group Limited was ranked 48 in SNL's list of Top 100 Banks by Total Assets in 2016; a deterioration over a year from rank 47 in 2015.

+ FT 500:

It is the 78th largest by profit in the FT Global 500.

+ Fortune 500:

It was ranked 418 by total revenues in the Fortune 500 annual list for 2017; a deterioration over a year from rank 362 in 2016.

+ Newsweek 500:

It was ranked 56 by Newsweek and Corporate Knights Capital in the World's 500 Greenest Companies 2016. It had outstanding scores of 11.7% in Water productivity, 9.9% in Energy productivity and 9.4% in Waste productivity.

+ Brand Finance 500:

It was ranked 38 in the Brand Finance list of the world's 500 Valuable Banking brands by brand value in 2015; an improvement over a year from rank 39 in 2014. Brand Finance valued the brand at US$6,664 million and ranked it Number 38 in APAC.

+ Forbes 2000:

It is the 295th largest by revenue in the Forbes Global 2000.

+ BSS/News Bites:

It is placed 855/1407 in BSS News Bites' ranking of Australian performers in the past year, a percentile ranking of 39.

+ Vanguard Total World Stock ETF 7457:

The stock was one of 7457 global stocks selected by Vanguard Total World Stock ETF (VT). As at November 30, 2017, the Vanguard Total World Stock ETF held 799,107 shares worth $US17,850,442 or 0.12% by value of the ETF's portfolio [Ranked 117 out of 7457 by value and 4 out of 245 for Australia].

SECTION 5 AUSTRALIA AND NEW ZEALAND BANKING FINANCIALS

5.1 Financials Summary

Year endedSep 2017Sep 2016Sep 2015
Sales (USD B)22.923.627.2
Pretax (USD B)7.66.48.3
Net (USD B)54.55.9
EPS (AUD)2.21.972.57

Net profit was up 12.2% from US$4.5 billion in 2016 to US$5 billion in 2017. Earnings Per Share (EPS) was up 11.7% from $A1.97 to $A2.20.

5.2 Annual Report for the year ended September 30, 2017 (year-on-year comparisons with previous corresponding period)-

Favourable Changes:

+ Net profit up 12.2% from $A5.7b ($US4.4b) to $A6.4b ($US5.0b)

+ EPS up 11.7% from $A1.97 ($US1.51) to $A2.2 ($US1.72).

+ EBIT to total assets up 20 from 0.9% to 1.1%.

+ Return on Equity up from 9.9% to 10.9%.

+ Retained earnings to total assets up 8.5% to 3.3%.

+ Net tangible assets per share up 3.6% from $A15.84 ($US12.2) to $A16.41 ($US12.9).

5.3 Trailing 12 Months Dividends

Trailing 12 Months ToValue ($A)
15 Jan 20181.6
15 Jan 20171.6
15 Jan 20161.81
15 Jan 20151.78
15 Jan 20141.64

SECTION 6 AUSTRALIA AND NEW ZEALAND BANKING CORPORATE BONDS

6.1 Key Statistics

MaturityYield to maturity %Yrs to Maturity% Rise/Fall 3-mo
Jan to Nov 20181.41 to 2.020.01 to 0.840.02
Jun to Sep 20191.91 to 2.351.42 to 1.7-
Jan to Nov 20202.01 to 2.572.0 to 2.84-0.95
Jan to Dec 20211.99 to 2.63.0 to 3.89-
Mar to Aug 20222.22 to 2.784.16 to 4.6-
Nov 20252.917.84-

6.2 Yield Curve - Australia and New Zealand Banking Bond vs US Treasury

Years to MaturityANZ Bond Yield (%)Treasury Yield (%)Spread to Treasury(Basis Points)
22.351.9936
32.572.147

The yield curve is upward sloping which is typical. The term premium between the yield of a 3-year Australia and New Zealand Banking Group Limited bond of 2.57% and the yield of a 2 year bond of 2.35% is 0.22%. Further, the yield curve is steepening from a term premium of 0.35% a month ago to a current level of 0.22%. This indicates investor expectations of falling inflation and/or decreasing demand for longer-term bonds. In comparison, the term premium of Treasury is 0.11%, up from 0.11% a month ago.

SECTION 7 AUSTRALIA AND NEW ZEALAND BANKING PROFILE

7.1 Activities

Australia and New Zealand Banking Group Limited is an international bank with activities in general banking, mortgage and installment lending, life insurance, leasing, hire purchase and general finance. ANZ also provides international and investment banking, investment and portfolio management and advisory services, nominee and custodian services, stock broking and executor and trustee services.

7.2 Industry & Sector

Classification LevelName of Sector
Business SectorBanking & Investment Services
Industry GroupBanking Services
IndustryBanks
Economic SectorFinancials

7.3 Top Management

The chairman is David Gonski, the chief executive officer is Shayne Elliott and the chief financial officer is Michelle Jablko.

7.4 Issued Capital

Based on 2,938,874,075 issued shares the market capitalisation is $A84.2 billion.

SECTION 8 STOCK BUZZ

Corporate Wire

To view Recent Company Headlines, click here

January 05: Australia and New Zealand Banking: Notice Corporations Act Subsection 259C(2)

December 21 2017: Australia and New Zealand Banking : Appendix 3B

December 21 2017: ANZ responds to OIO decision - UDC Finance

December 19 2017: Australia and New Zealand Banking: Results of 2017 AGM

The outcome of the poll conducted on the Items of Business set out in the Notice of 2017 Annual General Meeting held on 19 December 2017 is:

December 18 2017: Australia and New Zealand Banking : SRCB sale completion and on-market buy-back

Contact: (03) 9273 6141

Physical Address: ANZ Centre Melbourne, Level 9, 833 Collins Street, Docklands, VIC, Australia, 3008

State/Province/Country: Australia

Exchange: Australian Securities Exchange

ISIN: AU000000ANZ3

AU:ANZ; ASX:ANZ; AX:ANZ; ANZ.AX

PermID: 4295856605

Australia & New Zealand Banking Group Ltd, Australia And New Zealand Banking Group Limited, Australia And New Zealand Banking Group Ltd

Source: www.BuySellSignals.com