Australian stock report - BHP

AUSTR

UPDATE: BHP Billiton falls 1.6% from 14-day high January 16, 2018 16:00 AEST

NEWS BITES - AUSTRALIA

BHP Billiton Limited (ASX:BHP), Australia's largest Materials company by market cap, was down 1.6% from its 14-day high of $A32.16 on January 16. Its Williams % R is -16.6 which suggests it is overbought, a bearish signal. Its Relative Strength Index [RSI] is 86.2. An RSI reading of between 70 and 100 suggests the stock is close to its 14-day high, which is also a bearish signal. The stock price has decreased 24.0c (0.8%) from its last trading session of January 15 to close at $A31.66. Compared with the All Ordinaries Index which fell 21.8 points (0.3%) in the day, the relative price change was -0.4%. The volume of 7.7 million shares was close to average trading.

Highlights in today's Report:

SECTION 1 SENSITIVITY TO ZINC PRICE

SECTION 2 BEARISH SIGNALS

Fundamentals, Overvaluation [compared with sector average], Technicals, Overbought/Bearish/Resistance Signals, Short Selling and Open Interest

SECTION 3 BULLISH SIGNALS

Fundamentals, Undervaluation [compared with sector average], Technicals, Open Interest, High Performance Indicators, Moving Annual Return, Beta, Aggregate Volumes, Prices and Turnover Period

SECTION 4 RANKING

Global, Independent Ratings

SECTION 5 FINANCIALS

Financials Summary, Trailing 12 Months Dividends

SECTION 6 CORPORATE BONDS

SECTION 7 PROFILE

Activities, Industry & Sector, Top Management, Issued Capital

SECTION 8 STOCK BUZZ

SECTION 1 SENSITIVITY TO ZINC PRICE

Zinc increases 1.6%

15 January, 2018

Zinc (LME:ZS) has increased $US54.0 (or 1.6%) from its last trading session of January 11, 2018 to close at $US3,474.0 per tonne.

PV$10001-week1-month1-year
ZS.LME1,0241,0991,256

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 Fundamentals:

+ The relative yield of the stock, defined by its yield of 3.4%, divided by average yield of dividend yielding stocks in the All Ordinaries Index of 4.2% is 80.0%. This suggests the 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.

2.2 Overvaluation [compared with sector average]:

+ Price/Sales of 3.5 [2.5].

2.3 Technicals:

Downtrend: The stock dropped on high volatility today.

+ The 1.6% discount to 12-month high of $A32.16 against the 46.4% premium to 12-month low of $A21.63 suggests the climb might be peaking.

2.4 Overbought/Bearish/Resistance Signals:

+ The Relative Strength Index (RSI) of 86.2 has penetrated the overbought line of 70, suggesting the price gain of 7.9% in the last 14 days is unusually high.

+ The stock is overbought according to the Williams % R indicator of -16.6, suggesting the price is close to its 14-day high of $A32.16.

+ The Stochastic indicator of 91.1 has broken through the overbought line of 80; this indicates the price is close to its 14-day high and is likely to revert to a downtrend.

2.5 Short Selling and Open Interest:

+ In the Australian Short Selling market of 1085 stocks, short selling (on ASX and CHI-X) as a % of issued shares ranked 98th and within the top quartile of stocks. This means it was higher than market average of 0.04%, a bearish indicator.

+ The current short volume is 1.1 times its own historical average of 0.1%.

Open Interest Trend

Same day trend: The price decreased 0.8% from $A31.90 to $A31.66; Open interest has lifted 2.3% from 572,727 to 585,821. A fall in price combined with an increase in open interest suggests there is new money coming into the market from short sellers. This is a bearish signal.

DurationOpen Interest change %Price change %Interpretation
1-day2.3-0.8Weak Market

SECTION 3 BHP BILLITON BULLISH SIGNALS

3.1 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.

+ The company is cash rich with Cash to Market Capitalisation at 10.6%.

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

+ As per the Du Pont analysis, Return on Equity of 11.4% is better than sector average of 9.5%. This 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.

+ 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

3.2 Undervaluation [compared with sector average]:

+ Price to Book of 2.5 [2.8]. We estimate BHP Billiton stock is trading at a current year Price to Book of 2.9 and a forward year Price to Book of 2.6.

+ Return on Equity 11.4% [9.5%].

+ Return on Assets 5.3% [4.7%].

+ Return on Capital Employed 11.3% [10.0%].

3.3 Technicals:

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

+ The present value of $A1,000 (PV1000) invested one year ago in BHP Billiton is $A1,284, comprising a capital gain of $A232 and dividend reinvested of $A52.

PV$10001-week1-month1-year
BHP.ASX1,0191,1211,284
All Ordinaries Index9881,0001,063

+ The present value of AUD1,000 (PV1000) invested thirty years ago in BHP Billiton is $A27,790, including a capital gain of $A16,776 and dividend reinvested of $A10,015.

+ 30 years Multiplier in AUD = 27.791x

+ Compound Annual Growth Rate (CAGR) in AUD = 11.6%

Present Value of USD1,000 invested 30 years ago:

+ The present value of USD1,000 (PV1000) invested thirty years ago in BHP Billiton is $US31,068, including a capital gain of $US18,872 and dividend reinvested of $US11,196.

+ 30 years ago AUD 1 equalled USD 0.7126

+ 30 years Multiplier in USD = 31.068x

+ Compound Annual Growth Rate (CAGR) in USD = 12.0%

Jan 16, 2018: AUD 1 equals USD 0.8

3.4 Open Interest:

+ Open interest hit a 12-day high.

3.5 High Performance Indicators:

DescriptionValueRank In Market
Today's Turnover$A240.4 millionIn Top 1%
Price/MAP501.11In Top 8%
Price/MAP2001.23In Top Quartile
Total Debt to Equity0.02In Top Quartile
Volatility %1.5In Top Quartile

3.6 Moving Annual Return

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 27.3%.

BHPClose (AUD)Dividends (AUD)Capital Gain / (Loss) %% YieldAnnual Return %
Jan 1631.661.0623.24.127.3
1 Yr ago25.70.4181.52.984.4
2 Yrs ago14.161.67(40.5)7(33.5)
3 Yrs ago23.81.32(22.5)4.3(18.2)
4 Yrs ago30.71.20.33.94.2

Close 5 years ago $A30.61

3.7 Beta:

+ Beta: the Beta of BHP Billiton stock is 0.9. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.

3.8 Aggregate Volumes, Prices and Turnover Period:

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

+ ASX: BHP.ASX 7,593,619 [VI of 1.0] volume 96.66% of aggregate. Price: $A31.66.

+ OTCBB: BHPLF.OTCBB 256,123 [VI of 0.6] volume 3.26% of aggregate. Price: $US25.23. Using the current exchange rate of USD1 equals 1.2554AUD.

+ Frankfurt: BHP1.FRA 6,077 [VI of 0.4] volume 0.08% of aggregate. Price: EUR21.0. Using the current exchange rate of EUR1 equals 1.5395AUD, The shares are at a 2.1% premium to the close price on ASX.

+ Aggregate volume: there were 7.9 million shares of BHP Billiton worth $A248.7 million traded today. The aggregate volume equalled average trading of 8.1 million shares.

The turnover rate in the 12 months to date was 30.6% (or a turnover period of 3 years 3 months). This average length of ownership of the stock at 1.9 times the average holding period of 1 year 9 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 47,413 stocks] and Rank in the Asia Pacific Region [out of 2,078 stocks]

DescriptionValueGlobal RankIn APAC Region
MCap (US$)134.3B701
Total Assets (US$)117B4676
Revenue (US$)38.3B3343
Net Profit (US$)5.9B1563
Return on Equity %11.411,259375
Net Profit Margin %16.37,189297
Price to Book2.521,407855
Yield %3.37,428386
PV$1000 (1Year) US$*1,36312,321559
US$* Change (1Year) %33.313,209585

* 1 year ago AUD 1 = USD 0.75

Jan 16, 2018: AUD 1 equals USD 0.8

4.2 Independent Ratings

+ Top 40 Miners:

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

+ IHS Energy 50:

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.

+ PwC 100:

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.

+ FT 500:

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

+ Fortune 500:

It was ranked 350 by total revenues in the Fortune 500 annual list for 2017; a deterioration over a year from rank 168 in 2016.

+ Newsweek 500:

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.

+ Industryweek 1000:

It is a new entrant in the Industry Week list of the world's largest 1000 manufacturers by Revenues in 2016, ranked 77.

+ Forbes 2000:

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

+ BSS/News Bites:

It is placed 531/1410 in BSS News Bites' ranking of Australian performers in the past year, a percentile ranking of 62.

+ 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 880,325 shares worth $US18,486,890 or 0.13% by value of the ETF's portfolio [Ranked 113 out of 7457 by value and 3 out of 245 for Australia].

SECTION 5 BHP BILLITON FINANCIALS

5.1 Financials Summary

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)--0.36

Sales was down 15.3% from US$45.2 billion in 2015 to US$38.3 billion in 2017. Net profit was up 208.4% from US$1.9 billion in 2015 to US$5.9 billion in 2017 in the 2-year period.

5.2 Trailing 12 Months Dividends

Trailing 12 Months ToValue (c)
16 Jan 2018106.45
16 Jan 201740.51
16 Jan 2016166.53
16 Jan 2015131.6
16 Jan 2014119.95

SECTION 6 BHP BILLITON CORPORATE BONDS

Key Statistics

MaturityYield to maturity %Yrs to Maturity
Apr 20192.141.21
Nov 20212.563.85
Feb 20222.664.11
May to Sep 20232.675.33 to 5.71
Mar 20263.368.13

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 Ken Mackenzie, 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 $A168.6 billion.

SECTION 8 STOCK BUZZ

Corporate Wire

To view Recent Company Headlines, click here

November 16 2017: BHP Billiton Limited 2017 AGM Presentation

November 16 2017: BHP Billiton Limited 2017 AGM Speeches

November 16 2017: BHP 2017 AGM Results

The poll results for BHP Billiton Limited and BHP Billiton Plc are as follows :

October 18 2017: BHP Billiton: Operational Review for the Quarter Ended 30 September 2017

October 17 2017: BHP Billiton appoints Director

BHP Billiton has appointed Charles Maling as a Director. The effective date is Tuesday, October 17.

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