Australian stock report - BHP

AUSTR

UPDATE: BHP Billiton inches higher, resistance at 12-day EMA July 25, 2017 16:00 AEST

NEWS BITES - AUSTRALIA

BHP Billiton Limited (ASX:BHP), Australia's largest Materials company by market cap, has increased 0.7% but fell short of the 12-day Exponential Moving Average [EMA] of $A24.59. Compared with the All Ordinaries Index which rose 37.3 points (0.7%) in the day, the relative price increase was 0.01%. The volume was 0.6 times the average daily trading volume of 8.7 million shares. The stock last traded at $A24.56.

SECTION 1

BHP BILLITON BULLISH SIGNALS

1.1 Fundamentals:

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.9. Compared with the rest of the market the stock is undervalued.

1.2 Technicals:

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 24.59 minus the 26-day EMA of 24.26 is positive 0.33 suggesting a bullish signal.

+ Rises to Falls: in the past month the number of rises outnumbered falls 15:7 or 2.1:1.

+ The stock's relative price strength percentile is improving at 42 for 6 months, 61 for 3 months and 74 for 1 month.

+ The present value of $A1,000 (PV1000) invested one year ago in BHP Billiton is $A1,356, comprising a capital gain of $A315 and dividend reinvested of $A41.

PV$10001-week1-month1-year
BHP.ASX9781,0941,356
All Ordinaries Index1,0069921,030

+ The present value of AUD1,000 (PV1000) invested thirty years ago in BHP Billiton is $A13,402, including a capital gain of $A7,816 and dividend reinvested of $A4,586.

+ 30 years Multiplier in AUD = 13.402x

+ Compound Annual Growth Rate (CAGR) in AUD = 8.9%

Present Value of USD1,000 invested 30 years ago:

+ The present value of USD1,000 (PV1000) invested thirty years ago in BHP Billiton is $US15,013, including a capital gain of $US8,876 and dividend reinvested of $US5,137.

+ 30 years ago AUD 1 equalled USD 0.707

+ 30 years Multiplier in USD = 15.013x

+ Compound Annual Growth Rate (CAGR) in USD = 9.3%

Jul 25, 2017: AUD 1 equals USD 0.79

1.3 Short Selling:

+ The current short volume equalled its own historical average of 0.05%. It plummeted 32.6% from the previous day, plummeted 35.5% from a week ago, a bullish indicator.

1.4 High Performance Indicators:

DescriptionValueRank In Market
Today's Turnover$A131.3 millionIn Top 1%
Volatility %0.9In Top Quartile
Price/MAP501.03In Top Quartile

SECTION 2

BHP BILLITON BEARISH SIGNALS

2.1 Fundamentals:

+ The relative yield of the stock, defined by its yield of 2.9%, divided by average yield of dividend yielding stocks in the All Ordinaries Index of 4.2% is 67.3%. This suggests the stock is overvalued in dividend yield terms.

+ Total Liabilities/EBITDA of 23 which compares unfavourably with the Joseph Piotroski benchmark of 5.

+ Net profit margin has averaged 2.7% in the last 3 years. This suggests the company is less profitable with a low margin of safety.

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

YearRevenue GrowthEPS GrowthEBITDA Growth
Jun 16-30.4--85.7
Jun 15-23.7-86.1-41.2
Jun 14-16.723.38.2
Jun 13-3-27.1-7.4
Jun 121.2-32.6-18.1

2.2 Overvaluation [compared with sector average]:

+ Price/Sales of 3.3 [2.3].

2.3 Technicals:

Overbought/Bearish/Resistance Signals:

+ The Money Flow Index [MFI] is 80.6 suggesting an overbought 14-day trend, being above 80. The Money Ratio of 4.2 suggests positive money flow was 4.2 times negative money flow.

2.4 Low Performance Indicators:

DescriptionValueRank In Market
Total Debt to Equity0.7In Bottom Quartile
EBITDA Margin %8.3In Bottom Quartile
% Prem to Vol Wtd Price1.7In Bottom Quartile

SECTION 3

PRICE VOLUME DYNAMICS

3.1 Volatility:

+ BHP Billiton is at a discount of 10.3% to its 12-month high of $A27.37 on January 25. It is also at a premium of 34.0% to the 12-month low of $A18.33 on July 26, 2016.

3.2 Moving Annual Return

BHPClose (AUD)Dividends (AUD)Capital Gain / (Loss) %% YieldAnnual Return %
July 2524.560.731.53.835.3
1 Yr ago18.671.08(20.1)4.6(15.5)
2 Yrs ago23.381.47(32.4)4.3(28.1)
3 Yrs ago34.581.316.44.420.7
4 Yrs ago29.711.1112.44.216.6

3.3 Beta:

+ Beta: the Beta of BHP Billiton stock is 1.7. 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: BHP.ASX 5,344,766 [VI of 0.6] volume 96.41% of aggregate. Price: $A24.56.

+ OTCBB: BHPLF.OTCBB 193,731 [VI of 0.5] volume 3.49% of aggregate. Price: $US19.32. Using the current exchange rate of USD1 equals 1.2623AUD, The shares are at a 0.7% discount to the close price on ASX.

+ Frankfurt: BHP1.FRA 5,396 [VI of 0.3] volume 0.1% of aggregate. Price: EUR16.71. Using the current exchange rate of EUR1 equals 1.4645AUD, The shares are at a 0.3% discount to the close price on ASX.

+ Aggregate volume: there were 5.5 million shares of BHP Billiton worth $A136.1 million traded today. The aggregate volume was 0.6 times average trading of 9.1 million shares.

The turnover rate in the 12 months to date was 39.3% (or a turnover period of 2 years 6 months). This average length of ownership of the stock at 1.6 times the average holding period of 1 year 7 months for stocks in the All Ordinaries Index suggests a larger number of core investors, making a long-term investment safer.

SECTION 4

RANKING

4.1 Global Rank [out of 47,591 stocks] and Rank in the Asia Pacific Region [out of 2,050 stocks]

DescriptionValueGlobal RankIn APAC Region
MCap (US$)103.6B832
Total Assets (US$)119B4256
Revenue (US$)31.5B4145
Net Profit (US$)(6.4B)41,9391,914
Return on Equity %(11.8)32,127952
Net Profit Margin %(20.7)32,444836
Price to Book2.119,192924
Yield %2.98,564463
PV$1000 (1Year) US$*1,4419,678369
US$* Change (1Year) %29.212,083400

* 1 year ago AUD 1 = USD 0.75

Jul 25, 2017: AUD 1 equals USD 0.79

4.2 Independent Ratings

BHP Billiton Limited is the largest by MCap among the PwC Top 40 Miners.

It was ranked 44 in IHS Energy's list of Top 50 Energy Companies 2013; a deterioration over a year from rank 23 in 2012.

It was ranked 54 by MCap as at March 31, 2015 by PwC in the Top 100 Global companies; a deterioration over 6 years from rank 19 as at March 31, 2009.

It was ranked 55 in the Industry Week list of the world's largest 1000 manufacturers by Revenues in 2015; an improvement over a year from rank 60 in 2014.

It is the 76th largest by revenue in the FT Global 500.

It is the 130th largest by revenue in the Forbes Global 2000.

It was ranked 226 by Newsweek and Corporate Knights Capital in the World's 500 Greenest Companies 2016. It had outstanding scores of 7.5% in Waste productivity, 7.3% in Water productivity and 5.2% in Carbon productivity.

It is placed 272/1235 in BSS News Bites' ranking of Australian performers in the past year, a percentile ranking of 78.

SECTION 5

BHP BILLITON FINANCIALS

5.1 Financials Summary

Year endedJun 2016Jun 2015Jun 2014
Sales (USD B)31.545.259.3
Pretax (USD B)(7.3)8.121.7
Net (USD B)(6.4)1.913.8
EPS (USD)(1.2)0.362.59

5.2 Trailing 12 Months Dividends

Trailing 12 Months ToValue (c)
25 Jul 201770.35
25 Jul 2016108.03
25 Jul 2015147.22
25 Jul 2014129.58
25 Jul 2013110.65

SECTION 6

BHP BILLITON CORPORATE BONDS

6.1 Key Statistics

MaturityYield to maturity %Yrs to Maturity% Rise/Fall 3-mo
Apr 20191.531.69-
Nov 20211.934.330.4
Feb 20222.274.580.57
May to Sep 20232.555.81 to 6.180.67
Mar 20263.88.6-3.48

6.2 Yield Curve - BHP Billiton Bond vs US Treasury

Years to MaturityBHP Bond Yield (%)Treasury Yield (%)Spread to Treasury(Basis Points)
21.531.3617
52.271.8245

The yield curve is upward sloping which is typical. The term premium between the yield of a 5-year BHP Billiton Limited bond of 2.27% and the yield of a 2 year bond of 1.53% is 0.74%. Further, the yield curve is steepening from a term premium of 0.58% a month ago to a current level of 0.74%. This indicates investor expectations of rising inflation and/or increasing demand for longer-term bonds. In comparison, the term premium of Treasury is 0.46%, up from 0.42% a month ago.

SECTION 7

BHP BILLITON PROFILE

7.1 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.

7.2 Industry & Sector

Classification LevelName of Sector
Economic SectorBasic Materials
Business SectorMineral Resources
Industry GroupMetals & Mining
IndustrySpecialty Mining & Metals

7.3 Top Management

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

7.4 Issued Capital

Based on 5,323,812,903 issued shares the market capitalisation is $A130.8 billion.

SECTION 8

STOCK BUZZ

Corporate Wire

To view Recent Company Headlines, click here

July 19: BHP Billiton: Quarterly Activities Report

July 19: BHP Billiton: 2016 US Annual Report (Form 20-F/A)

July 04: BHP Billiton: Notice of 2017 Final Dividend and AGM Dates

July 04: BHP Billiton: Notice of 2017 Final Dividend and AGM Dates

June 20: BHP Billiton Chairman will resign

Contact: (03) 9609 3333

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

State/Province/Country: Australia

Exchange: Australian Securities Exchange

ISIN: AU000000BHP4

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

PermID: 4295856983

Bhp Billiton Limited, Bhp Billiton Ltd

Source: www.BuySellSignals.com