Australian stock report - BHP

AUSTR

BHP Billiton shares post worst quarter in five quarters August 17, 2018 16:00 AEST

NEWS BITES - AUSTRALIA

BHP Billiton Limited (ASX:BHP), Australia's largest Materials company by market cap, has decreased $A1.67 (or 4.8%) in the past quarter to close at $A32.77. Compared with the All Ordinaries Index which rose 229.0 points (or 3.7%) in the past quarter, this represented a relative price change of -8.6%. The volume for the past quarter was 0.9 times average trading per quarter of 458.8 million shares. In the past quarter the market cap has declined $A6.2 billion to $A174.5 billion. The shares had their worst quarter in five quarters since the quarter ended May 19, 2017.

Highlights in today's Report:

SECTION 1 SENSITIVITY TO ZINC PRICE

SECTION 2 BEARISH SIGNALS incl. Short Selling

SECTION 3 BULLISH SIGNALS

SECTION 4 PRICE VOLUME DYNAMICS

SECTION 5 RELATED NEWS

SECTION 6 GLOBAL RANKING

SECTION 7 SUMMARY FINANCIALS

SECTION 8 PROFILE

SECTION 1 SENSITIVITY TO ZINC PRICE

Zinc tumbles 6.2%

16 August, 2018

Zinc (LME:ZS) has tumbled $US154.50 (or 6.2%) from its last trading session of August 13, 2018 to close at $US2,338.0 per tonne.

PV$10001-week1-month1-year
ZS.LME871925750

Global Rank out of 88 commodities

The present value of $1,000 invested a year ago is $1,410, ranking it 5 out of 88 commodities. Its 6-month relative strength (or price percentile rank) is 78.

DescriptionValueRankQuartile
Rel Strength 6 Mo (US$)7819Top
PV$1000 (1Year) US$1,4105Top

SECTION 2 BHP BILLITON BEARISH SIGNALS

2.1 Short Selling:

+ In the Australian Short Selling market of 1087 stocks, short selling (on ASX and CHI-X) as a % of issued shares ranked 109th and within the top quartile of stocks. This means it was higher than market average of 0.06%, a bearish indicator.

+ The current short volume is 1.4 times its own historical average of 0.1%. It soared 75.5% from the previous day, soared 103.1% from a week ago and soared 109.6% from a month ago, a significant bearish indicator.

2.2 Technicals:

+ The price dropped 2.8% in the last week.

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 33.49 minus the 26-day EMA of 33.55 is negative 0.06 suggesting a bearish signal. Both EMA prices are falling, another bearish signal.

2.3 Fundamentals:

+ The relative yield of BHP, defined by its yield of 3.8%, divided by average yield of dividend yielding stocks in the All Ordinaries Index of 4.4% is 87.0%. This suggests BHP Billiton stock is overvalued in dividend yield terms.

+ Net profit margin has averaged 0.2% in the last 3 years. This suggests the company is less profitable with a low margin of safety.

2.4 Overvaluation [compared with sector average]:

+ Price/Sales of 3.3 [2.2].

+ Dividend yield of 3.8% [4.3%].

SECTION 3 BHP BILLITON BULLISH SIGNALS

3.1 Technicals:

+ In the last three months the stock has hit a new 52-week high thrice.

+ The present value of $A1,000 (PV1000) invested one year ago in BHP Billiton is $A1,381, comprising a capital gain of $A321 and dividend reinvested of $A60.

PV$10001-week1-month1-year
BHP.ASX9721,0081,381
All Ordinaries Index1,0131,0141,103

+ The present value of AUD1,000 (PV1000) invested thirty years ago in BHP Billiton is $A25,669, including a capital gain of $A14,855 and dividend reinvested of $A9,815.

+ 30 years Multiplier in AUD = 25.669x

+ Compound Annual Growth Rate (CAGR) in AUD = 11.3%

Present Value of USD1,000 invested 30 years ago:

+ The present value of USD1,000 (PV1000) invested thirty years ago in BHP Billiton is $US23,299, including a capital gain of $US13,390 and dividend reinvested of $US8,908.

+ 30 years ago AUD 1 equalled USD 0.8007

+ 30 years Multiplier in USD = 23.299x

+ Compound Annual Growth Rate (CAGR) in USD = 10.9%

Aug 17, 2018: AUD 1 equals USD 0.73

3.2 Oversold/Bullish/Support Signals:

+ The stock is oversold according to the Williams % R indicator of -90.2, suggesting the price is close to its 14-day low of $A32.49.

High Performance Indicators and rank of BHP Billiton in the Australian market:

DescriptionBHP ValueRank In Market
Today's Trading Turnover$A127.7 millionIn Top 1%
Volatility %1.0In Top Quartile
Total Debt to Equity0.02In Top Quartile

3.3 Fundamentals:

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 1.1. Compared with the rest of the market the stock is undervalued.

+ Total Liabilities/EBITDA of 4.6 is less than the Joseph Piotroski benchmark of 5.

+ BHP Billiton is cash rich with Cash to Market Capitalisation at 11.2%.

+ Interest cover defined by EBIT/I is 7.6 times. This indicates it is less leveraged.

+ Over the last 3 years average annual compound growth rate of earnings per share was 16.8%. This is considered moderate.

+ As per the Du Pont analysis, Return on Equity [ROE] of 11.4% is better than sector average of 10.9%. ROE is computed as net profit margin of 16.3% times asset turnover [sales/assets] of 0.33 times leverage factor [total assets/shareholders' equity] of 2.0.

Annual Trend in Revenue:

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

YearRevenue Growth
Jun 1723.9
Jun 16-31.6

SECTION 4 BHP BILLITON PRICE VOLUME DYNAMICS

4.1 Volatility:

+ BHP Billiton is at a discount of 7.1% to its 12-month high of $A35.29 on August 01. It is also at a premium of 35.4% to the 12-month low of $A24.21 on August 21, 2017.

4.2 Aggregate Volumes and Prices:

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

+ ASX: BHP.ASX 3,897,943 [VI of 0.6] volume 99.26% of aggregate. Price: $A32.77.

+ OTCBB: BHPLF.OTCBB 22,034 [VI of 0.05] volume 0.56% of aggregate. Price: $US23.84. Using the current exchange rate of USD1 equals 1.3753AUD, The shares are at a 0.1% premium to the close price on ASX.

+ Frankfurt: BHP1.FRA 7,145 [VI of 0.8] volume 0.18% of aggregate. Price: EUR20.84. Using the current exchange rate of EUR1 equals 1.5658AUD, The shares are at a 0.4% discount to the close price on ASX.

+ Aggregate volume: there were 3.9 million shares of BHP Billiton worth $A128.7 million traded today. The aggregate volume was 0.5 times average trading of 7.5 million shares.

The turnover rate in the 12 months to date was 30.7% (or a turnover period of 3 years 3 months). This average length of ownership of the stock at 1.7 times the average holding period of 1 year 11 months for stocks in the All Ordinaries Index suggests a larger number of core investors, making a long-term investment safer.

4.3 Moving Annual Return (Past 5 years)

Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 3 of the last 5 years. An investment a year ago in BHP would have produced a return of 37.2%.

BHPClose (AUD)Dividends (AUD)Capital Gain / (Loss) %% YieldAnnual Return %
Aug 1732.771.2532.1537.2
1 Yr ago24.80.731.93.735.6
2 Yrs ago18.811.08(16.1)4.8(11.3)
3 Yrs ago22.421.47(32.5)4.4(28.0)
4 Yrs ago33.191.310.34.314.6

Close 5 years ago $A30.09

4.4 The Past Year

+ BHP Billiton Limited (ASX:BHP), lifted $A7.97 (or 32.1%) in the past year to close at $A32.77 today. Compared with the All Ordinaries Index which has risen 10.2% over the same period, this is a relative price increase of 21.9%.

SECTION 5 BHP BILLITON RELATED NEWS

5.1 American Depository Receipts

+ BHP Billiton ADR increases

BHP Billiton Limited (N:BHP), the International Depository Receipt (IDR) market's largest Mining company by market cap, has increased 31.0c (0.7%) from its last trading session of August 15 to close at $US47.27. Compared with the Bank of New York Mellon Composite ADR Index which rose 1.0 points (0.7%) in the day, the relative price change was -0.05%. The volume was 0.7 times the average daily trading volume of 3.1 million ADRs. Its MCap is $US76.1 billion.

5.2 Other News

+ BSS/News Bites:

BHP Billiton Limited is placed 382/1398 in BSS News Bites' ranking of Australian performers in the past year, a percentile ranking of 73.

+ Vanguard Total World Stock ETF 2588:

The stock was one of 2588 global stocks selected by Vanguard Total World Stock ETF (VT) who sold 1,028,673 shares in the period May 31, 2018 to Jun 30, 2018 worth $US-34,111,717 at an estimated Volume Weighted Average Price (VWAP) of $US33.1609. As at Jun 30, 2018, the Vanguard Total World Stock ETF held 0 shares worth $US4 or 1,030,250% by value of the ETF's portfolio [Ranked 386 out of 2588 by value and 4 out of 77 for Australia].

SECTION 6 BHP BILLITON GLOBAL RANKING

Global Rank [out of 47,645 stocks] and Rank of BHP Billiton in the Asia Pacific Region [out of 2,088 stocks]

DescriptionValueGlobal RankIn APAC Region
MCap (US$)126.8B691
Total Assets (US$)117B4746
Revenue (US$)38.3B3323
Net Profit (US$)5.9B1593
Return on Equity %11.411,590372
Net Profit Margin %16.37,406301
Price to Book2.423,569860
Price/Earnings21.711,229461
Yield %3.87,690337
PV$1000 (1Year) US$*1,2847,086424
US$* Change (1Year) %24.37,623432

* 1 year ago AUD 1 = USD 0.79

Aug 17, 2018: AUD 1 equals USD 0.73

SECTION 7 BHP BILLITON SUMMARY FINANCIALS

7.1 Dividend History

+ Trailing 12 months dividend has deteriorated from $US1.30 in 2014 to $US1.25 in 2018.

7.2 Financials Summary (Past 3 years)

Year endedJun 2017Jun 2016Jun 2015
Sales (USD B)38.330.945.2
Pretax (USD B)10.3(7.3)8.1
Net (USD B)5.9(6.4)1.9
EPS (USD)1.1(1.2)0.36

+ Net profit was up 208.4% from US$1.9 billion in 2015 to US$5.9 billion in 2017.

+ Earnings Per Share (EPS) was up 205.6% from 36.0c to $US1.10 in the 2-year period.

SECTION 8 BHP BILLITON PROFILE

8.1 Activities

BHP Billiton is a global leader in the resources industry. It is the world's sixth largest producer of primary aluminum and world's third largest copper producer and a leading producer of lead and zinc. It is also one of the world's premier suppliers of iron ore and one of the world's largest producers and marketers of thermal coal. It's manganese operations produce a combination of ores, alloys and metal. In rough diamonds, its annual production represents nearly three per cent of current world supply by weight and six per cent by value.

8.2 Top Management

The chairman is Ken Mackenzie, the chief executive officer is Andrew Mackenzie and the chief financial officer is Peter Beaven.

8.3 Issued Capital

Based on 5,323,762,901 issued shares the market capitalisation is $A174.5 billion.

COMPANY IDENTIFIERS

Contact: (03) 9609 3333

Physical Address: Level 27, 180 Lonsdale Street, Melbourne, VIC, Australia, 3000

State/Province/Country: Australia

Exchange: Australian Securities Exchange

Business Sector: Mineral Resources

Industry Group: Metals & Mining

Industry: Specialty Mining & Metals

Economic Sector: Basic Materials

ISIN: AU000000BHP4

AU:BHP; ASX:BHP; AX:BHP; BHP.AX

PermID: 4295856983

RIC: BHP.AX

Bhp Billiton Limited, Bhp Billiton Ltd

Source: www.BuySellSignals.com