Australian stock report - Qantas
Qantas Airways increases on firm volume, announces buyback of shares June 15, 2018 16:00 AEST
NEWS BITES - AUSTRALIA
Qantas Airways Limited (ASX:QAN), Australia's 3rd largest Transportation company by market cap, has increased 1.0c (0.2%) from its last trading session of June 14 to close at $A6.46. Compared with the All Ordinaries Index which rose 75.7 points (1.2%) in the day, the relative price change was -1.1%. The rise has been propped up by firm volume of 1.3 times the average daily volume of 8.3 million shares.
BUYBACK OF SHARES
Qantas Airways announced a buyback of 1,085,536 shares worth $A7,088,550 (or $US5,360,227) on June 13. The buyback price was $A6.53.
Highlights in today's Report:
SECTION 1 BULLISH SIGNALS
SECTION 2 BEARISH SIGNALS
SECTION 3 PRICE VOLUME DYNAMICS
SECTION 4 RELATED NEWS
SECTION 5 GLOBAL RANKING
SECTION 6 SUMMARY FINANCIALS
SECTION 7 PROFILE
SECTION 1 QANTAS AIRWAYS BULLISH SIGNALS
+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.6. Compared with the rest of the market the stock is undervalued.
+ Total Liabilities/EBITDA of 4.9 is less than the Joseph Piotroski benchmark of 5.
+ Interest cover defined by EBIT/I is 6 times. This indicates it is less leveraged.
+ As per the Du Pont analysis, Return on Equity is high at 24.1%. This is computed as net profit margin of 5.3% times asset turnover [sales/assets] of 0.93 times leverage factor [total assets/shareholders' equity] of 4.9.
1.2 Undervaluation [compared with sector average]:
+ Price/Earnings of 14 [35.6]. We estimate Qantas Airways stock is trading at a current year P/E of 9.6 and a forward year P/E of 7.2.
+ Price/Sales of 0.7 [2.3]. We estimate Qantas Airways stock is trading at a current year Price/Sales of 0.7 and a forward year Price/Sales of 0.7.
+ Return on Equity 24.1% [10.1%].
+ Return on Assets 5% [2.7%].
+ Return on Capital Employed 14% [6.1%].
+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 6.44 minus the 26-day EMA of 6.35 is positive 0.09 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.
+ In the last three months the stock has hit a new 52-week high four times, pointing to an uptrend.
+ The present value of $A1,000 (PV1000) invested one year ago in Qantas Airways is $A1,251, comprising a capital gain of $A221 and dividend reinvested of $A30.
|All Ordinaries Index||1,008||1,010||1,070|
+ The present value of AUD1,000 (PV1000) invested twenty years ago in Qantas Airways is $A5,976, including a capital gain of $A3,104 and dividend reinvested of $A1,872.
+ 20 years Multiplier in AUD = 5.976x
+ Compound Annual Growth Rate (CAGR) in AUD = 9.3%
Present Value of USD1,000 invested 20 years ago:
+ The present value of USD1,000 (PV1000) invested twenty years ago in Qantas Airways is $US7,562, including a capital gain of $US4,193 and dividend reinvested of $US2,369.
+ 20 years ago AUD 1 equalled USD 0.5897
+ 20 years Multiplier in USD = 7.562x
+ Compound Annual Growth Rate (CAGR) in USD = 10.7%
Jun 15, 2018: AUD 1 equals USD 0.75
1.4 Short Selling:
+ The current short volume is 0.6 times its own historical average of 0.1%. It plummeted 38.6% from the previous day, a bullish indicator.
1.5 High Performance Indicators:
|Description||QAN Value||Rank In Market|
|Today's Turnover||$A70.3 million||In Top 2%|
|Price to Sales||0.7||In Top Quartile|
|Price/MAP50||1.04||In Top Quartile|
|Price/MAP200||1.12||In Top Quartile|
SECTION 2 QANTAS AIRWAYS BEARISH SIGNALS
+ The relative yield of QAN, defined by its yield of 2.2%, divided by average yield of dividend yielding stocks in the All Ordinaries Index of 4.4% is 49.0%. This suggests Qantas Airways stock is overvalued in dividend yield terms.
+ Net profit margin has averaged 5.1% in the last 3 years. This is lower than the sector average of 9.2% and suggests a low margin of safety.
2.2 Overvaluation [compared with sector average]:
+ Dividend yield of 2.2% [3.9%].
+ The price decreased 0.3% in the last week.
+ The 2.0% discount to 12-month high of $A6.59 against the 37.1% premium to 12-month low of $A4.71 suggests the climb might be peaking.
2.4 Overbought/Bearish/Resistance Signals:
+ The Stochastic indicator of 81.4 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 Low Performance Indicators:
|Description||QAN Value||Rank In Market|
|Total Debt to Equity||1.4||In Bottom Quartile|
|% Prem to Vol Wtd Price||0.9||In Bottom Quartile|
SECTION 3 QANTAS AIRWAYS PRICE VOLUME DYNAMICS
+ Volume: there were 10,875,999 shares worth $A70.3 million traded today. In the past week, volume was 0.9 times average and the shares were down 0.3%.
3.2 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 QAN would have produced a return of 24.8%.
|QAN||Close (AUD)||Dividends (AUD)||Capital Gain / (Loss) %||% Yield||Annual Return %|
|1 Yr ago||5.29||0.14||97.2||5.2||102.4|
|2 Yrs ago||2.68||-||(16.6)||-||(16.6)|
|3 Yrs ago||3.22||-||142.1||-||142.1|
|4 Yrs ago||1.33||-||(2.6)||-||(2.6)|
Close 5 years ago $A1.36
+ Beta: the Beta of Qantas Airways stock is 0.8. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.
3.4 Turnover Rate & Turnover Period:
+ The turnover rate in the 12 months to date was 107.8% (or a turnover period of 11 months). This average length of ownership of the stock at 0.5 times the average holding period of 1 year 10 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.
3.5 The Past Year
+ Qantas Airways Limited (ASX:QAN), gained $A1.17 (or 22.1%) in the past year to close at $A6.46 today. Compared with the All Ordinaries Index which has risen 5.8% over the same period, this is a relative price increase of 16.3%. A five-bagger, the value of AUD1,000 invested five years ago is $A5,056 [vs $A1,300 for the All Ordinaries Index], for a capital gain of $A3,738 and dividend re-invested of $A318. The average annualised return to shareholders [TSR or Total Shareholder Return] has been 38.3% in the past five years.
SECTION 4 QANTAS AIRWAYS RELATED NEWS
4.1 Corporate Wires
Qantas Airways (QAN) issued 4 new Releases this week.
June 14: Qantas Airways buys back 1,085,536 shares
Qantas Airways (QAN.AU) announced a buyback of 1,085,536 shares worth $A7,088,550 (or $US5,360,227) on June 13, 2018. The buyback price was $A6.53.
To view the previous 3 months' Releases in full, click here
4.2 Other News
+ BSS/News Bites:
Qantas Airways Limited is placed 524/1430 in BSS News Bites' ranking of Australian performers in the past year, a percentile ranking of 63.
+ Vanguard Total World Stock ETF 7581:
The stock was one of 7581 global stocks selected by Vanguard Total World Stock ETF (VT). As at Apr 30, 2018, the Vanguard Total World Stock ETF held 237,276 shares worth $US1,058,519 or 0.01% by value of the ETF's portfolio [Ranked 2156 out of 7581 by value and 61 out of 248 for Australia].
SECTION 5 QANTAS AIRWAYS GLOBAL RANKING
Global Rank [out of 47,575 stocks] and Rank in the Asia Pacific Region [out of 2,084 stocks]
|Description||Value||Global Rank||In APAC Region|
|Total Assets (US$)||12.9B||2,368||29|
|Net Profit (US$)||635.8M||1,566||24|
|Return on Equity %||24.1||2,987||136|
|Net Profit Margin %||5.3||17,775||551|
|Price to Book||4.4||28,487||1,131|
|PV$1000 (1Year) US$*||1,239||10,389||620|
|US$* Change (1Year) %||21.6||10,429||619|
* 1 year ago AUD 1 = USD 0.76
Jun 15, 2018: AUD 1 equals USD 0.75
SECTION 6 QANTAS AIRWAYS SUMMARY FINANCIALS
6.1 Dividend History
+ Trailing 12 months dividend has unchanged from 14.0c in 2017 to 14.0c in 2018.
6.2 Financials Summary
|Year ended||Jun 2017||Jun 2016||Jun 2015|
|Sales (USD B)||12.2||12.3||12|
|Net (USD M)||648.3||783||423.8|
+ Net profit was down 17.2% from US$783 million in 2016 to US$648.3 million in 2017.
+ Earnings Per Share (EPS) was down 6.9% from 49.40c to 46.0c.
SECTION 7 QANTAS AIRWAYS PROFILE
Qantas Airways Limited provides transportation of passengers through two airlines including Qantas (full service carrier) and Jetstar (low cost carrier), operating international, domestic and regional services. The Company also includes Qantas Frequent Flyer and Qantas Freight which generates diverse revenue streams and adds value for customers and investors.
7.2 Top Management
The chairman is Leigh Clifford and the chief executive officer is Alan Joyce.
7.3 Issued Capital
Based on 1,693,000,000 issued shares the market capitalisation is $A10.9 billion.
Contact: +61 2 9691 3636
Physical Address: Level 8, 241 O'Riordan Street, Mascot, NSW, Australia, 2020
Exchange: Australian Securities Exchange
Economic Sector: Industrials
Business Sector: Transportation
Industry: Passenger Transportation, Ground & Sea
AU:QAN; ASX:QAN; AX:QAN; QAN.AX
Qantas Airways Limited, Qantas Airways Ltd