Australia Stock Alert

AUSTR

Morning Alert: Reject Shop continues significant uptrend, increases 1.7% July 27, 2017 11:00:00 AEST

NEWS BITES - AUSTRALIA

The Reject Shop Limited (ASX:TRS) continued its significant uptrend and increased 8.0c (or 1.7%) to trade at $A4.88 today.

SECTION 1: The past week

Current indications of bullish signals that support the trend in the unusual trading

1.1 At a glance

Weekly: Reject Shop keeps rising: up 34.1% in 7 weeks July 26, 2017 16:00 AEST

The Reject Shop Limited (ASX:TRS), Australia's 26th largest Retailer company by market cap, extended its gains in the past week ended Wednesday, rising an additional 24.0c (or 5.3%) to close at $A4.80. The shares have soared $A1.22 (or 34.1%) over the past seven weeks. Compared with the All Ordinaries Index which rose 115.5 points (or 2.0%) in the seven weeks, this represented a relative price increase of 32.1%. The volume was 0.6 times average trading per week of 887,140 shares. In the past seven weeks the market cap has jumped $A35.2 million.

1.2 5-day Recap

Reject Shop outperformed the All Ordinaries index in 4 out of 5 days.

DayHeadlineClose price [AUD]Price change %Relative change %Comment
WednesdayReject Shop in 3rd consecutive rise, nears five-month high4.80.2-0.8
TuesdayReject Shop in 2nd consecutive rise, nears five-month high4.791.50.8
MondayReject Shop increases against the trend4.721.92.5
ThursdayReject Shop outperforms 96% of the market4.652.01.5Top Rise

Note

DayHeadlineClose price [AUD]Price change %Relative change %Comment
FridayReject Shop decreases4.63-0.40.2Steepest Fall

SECTION 2: Technical indicators

Bullish:

The positive 0.21 MACD (Moving Average Convergence Divergence) indicator suggests a bullish signal (12-day minus 26-day Exponential Moving Averages). Both the 12-day and the 26-day EMA are rising - another bullish signal. In the past week, the stock's MACD has been positive every day, a reinforcing bullish signal.

The price climbed 4.9% in the last week and soared 23.9% in the last month.

Fundamental measures by comparison with the sector average [in brackets] indicate:

Undervaluation:

Price/Earnings of 8.3 [22.1]

Price/Sales of 0.2 [0.6]

Price to Book of 1 [3.5]

Dividend yield of 8.8% [4.4%]

Return on Equity 12.6% [10.3%]

Return on Assets 7.4% [5.2%]

Return on Capital Employed 17% [14.3%]

Overvaluation:

Year-on-Year Earnings Growth of 20.4% [23.8%]

Note

The stock is at a discount of 66.7% to the 12-month high of $A14.64 on 22 Aug, 2016. It is also at a premium of 50.1% to the 12-month low of $A3.25 on 25 May, 2017.

Bearish:

The stock has underperformed 92% of the Australian market over the past 6 months.

In the last three months the stock has hit a new 52-week low eight times, pointing to a significant downtrend.

The present value of AUD1,000 invested one year ago is $A430 [vs $A1,039 for the All Ordinaries Index], including a capital loss of $A590 and dividend reinvested of $A20. The total return to shareholders for 1 year is -57.0%.

SECTION 3: Ranking

DescriptionValueRank In Market
MCap $US million112In 2nd Quartile
52-week Range (in $A)3.2-14.6
1-month Range (in $A)3.9-4.9
RSI82.6Bearish

SECTION 4: Earnings

Annual Report: Reject Shop Net Profit up 20.1%

Reject Shop (ASX:TRS) reported net profit for the year-ended 30 June 2016 of $A17.1m, up 20.1% from $A14.2m in the previous year.

Major changes compared with previous year:

Favourable Changes:

- Net profit up 20.1% from $A14.2m ($US10.9m) to $A17.1m ($US12.7m)

- Total revenue up 5.7% from $A756.9m ($US581.2m) to $A800.1m ($US594.6m)

- EPS up 20.4% from 49.0c (US37.63c) to 59.0c (US43.85c)

- EBIT Margin up from 2.9% to 3.1%

- EBIT to total assets up from 9.5% to 10.8%

- Total revenue to total assets up from 3.3 to 3.5

- Profit before tax to Revenues up from 2.7% to 3%

- Retained earnings to total assets up from 35.1% to 37.4%

- Future income tax benefit to Total Assets up from 4.2% to 7%

Unfavourable Changes:

- Cost of Goods Sold to Revenues up from 55.9% to 57.7%

- Administration expenses to Revenues up from 5.2% to 5.3%

- Current ratio down 17.2% from 1.8 to 1.5

- Working capital to total assets down from 24.2% to 17.7%

- Fixed Assets to Total Assets down from 41.2% to 39%

Note:

- Tax expenses to Revenues up from 0.8% to 0.9%

- Total current assets to Total Assets down from 54.5% to 54%

- Total non-current assets to Total Assets up from 45.5% to 46%

- Current Inventory to Total Assets down from 43.9% to 42.7%

- Net tangible assets per share steady at $A4.69 ($US3.5)

SECTION 5: Recent News of Reject Shop

June 23: Reject Shop: Resignation of a Director

The Reject Shop Limited (ASX: TRS) advises that Ms. Melinda Conrad will retire from the Board effective 30th June 2017. Ms. Conrad has served on the Board since 2011, and has determined to st and down from TRS as part of a restructure of her overall Board portfolio.

Source: Australian Securities Exchange

The Reject Shop Limited (AU:TRS; ASX:TRS; AX:TRS)

ISIN: AU000000TRS9

PermID: 4295856267

Source: www.BuySellSignals.com