French stock report - Air France - KLM

FRA

Two-bagger Air France - KLM lifts 3.5% on firm volume July 24, 2017 17:30 CEST

NEWS BITES - EUROPE

Air France - KLM (FR:AF), France's 4th largest Travel & leisure company by market cap, ending a two-day streak of losses. The stock price has lifted 41.0c (3.5%) from its last trading session of July 21 to close at EUR12.02. Compared with the CAC 40 Index which rose 1.9 points (0.04%) in the day, the relative price increase was 3.5%. A two-bagger in the past year, the value of EUR1,000 invested one year ago is EUR2,230 [vs EUR1,170 for the CAC 40 Index], for a capital gain of EUR1,230. The total return to shareholders for 1 year is 123.0%. The rise has been propped up by firm volume of 1.1 times the average daily volume of 5 million shares.

SECTION 1

AIR FRANCE - KLM BULLISH SIGNALS

1.1 Fundamentals:

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.2. Compared with the rest of the market the stock is undervalued and ranks in the top 3% of stock by value of Q Ratio.

+ As per the Du Pont analysis, Return on Equity is high at 41.2%. This is computed as net profit margin of 2.1% times asset turnover [sales/assets] of 1.1 times leverage factor [total assets/shareholders' equity] of 17.9.

1.2 Undervaluation [compared with sector average]:

+ Price/Earnings of 7.4 [35.9].

+ Price/Sales of 0.1 [0.7]. We estimate Air France - KLM stock is trading at a current year Price/Sales of 0.1 and a forward year Price/Sales of 0.1.

+ Return on Equity 41.2% [7.4%].

+ Return on Assets 2.3% [1.8%].

+ Return on Capital Employed 6.4% [3.5%].

1.3 Technicals:

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 12.58 minus the 26-day EMA of 12.21 is positive 0.36 suggesting a bullish signal.

+ Rises to Falls: in the past month the number of rises outnumbered falls 14:7 or 2:1.

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

+ A two-bagger in the past year, the present value of EUR1,000 (PV1000) invested one year ago in Air France - KLM is EUR2,230, for a capital gain of EUR1,230.

PV10001-week1-month1-year
AF.FR8831,0762,230
CAC 40 Index9799871,170

+ The present value of EUR1,000 (PV1000) invested five years ago in Air France - KLM is EUR3,095, for a capital gain of EUR2,095.

+ 5 years Multiplier in EUR = 3.095x

+ Compound Annual Growth Rate (CAGR) in EUR = 25.4%

Present Value of USD1,000 invested 5 years ago:

+ The present value of USD1,000 (PV1000) invested five years ago in Air France - KLM is $US2,946, for a capital gain of $US1,946.

+ 5 years ago EUR 1 equalled USD 1.2225

+ 5 years Multiplier in USD = 2.946x

+ Compound Annual Growth Rate (CAGR) in USD = 24.1%

Jul 24, 2017: EUR 1 equals USD 1.16

1.4 High Performance Indicators:

DescriptionValueRank In Market
Price to Sales0.1In Top 2%
Price/MAP2001.6In Top 3%
Today's TurnoverEUR66.1 million (US$76.9 million)In Top 7%
Price Change %3.5In Top Quartile
Price/MAP501.04In Top Quartile

SECTION 2

AIR FRANCE - KLM BEARISH SIGNALS

2.1 Fundamentals:

+ Total Liabilities/EBITDA of 9 which compares unfavourably with the Joseph Piotroski benchmark of 5.

+ Net profit margin has averaged 0.7% in the last 3 years. This suggests the company is less profitable with a low margin of safety.

2.2 Low Performance Indicators:

DescriptionValueRank In Market
Volatility %6.2In Bottom Quartile
Total Debt to Equity6.6In Bottom 1%

SECTION 3

PRICE VOLUME DYNAMICS

3.1 Volatility:

+ Air France - KLM is at a discount of 12.4% to its 12-month high of EUR13.72 on July 17. It is also at a premium of 160.7% to the 12-month low of EUR4.61 on October 10, 2016.

3.2 Beta:

+ Beta: the Beta of Air France - KLM 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.

3.3 Aggregate Volumes, Prices and Turnover Period:

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

+ Paris: AF.FR 5,500,000 [VI of 1.2] volume 99.84% of aggregate. Price: EUR12.02.

+ Frankfurt: AFR.FRA 8,945 [VI of 0.6] volume 0.16% of aggregate. Price: EUR11.62.

+ Aggregate volume: there were 5.5 million shares of Air France - KLM worth EUR66.2 million traded today. The aggregate volume was 1.2 times average trading of 4.7 million shares.

SECTION 4

RANKING

4.1 Global Rank [out of 47,592 stocks] and Rank in the Europe Region [out of 8,351 stocks]

DescriptionValueGlobal RankIn Eur Region
MCap (US$)4.2B3,026671
Total Assets (US$)26.7B1,344310
Revenue (US$)29B451119
Net Profit (US$)923.4M1,026225
Return on Equity %41.2876185
Net Profit Margin %2.122,7913,703
Price/Earnings7.12,510622
PV$1000 (1Year) US$*2,3551,981362
US$* Change (1Year) %129.01,871313

* 1 year ago EUR 1 = USD 1.1

Jul 24, 2017: EUR 1 equals USD 1.16

4.2 Independent Ratings

Air France - KLM was ranked 14 in World Airline Awards list of Top 100 Airlines Companies in 2016; an improvement over a year from rank 15 in 2015.

It is the 289th largest by revenue in the Forbes Global 2000.

It is placed 26/525 in BSS News Bites' ranking of French performers in the past year, a percentile ranking of 95.

SECTION 5

AIR FRANCE - KLM FINANCIALS

5.1 Financials Summary

Year endedDec 2016Dec 2015Dec 2014
Sales (USD B)2930.429.1
Pretax (USD M)959.3233.173.4
Net (USD M)923.2137.5(230.8)
EPS (EUR)1.62910.115(0.67)

5.2 Annual Report for the year ended December 31, 2016 (year-on-year comparisons with previous corresponding period)-

Favourable Changes:

+ Cost of Goods Sold to Sales down from 64.1% to 61.7%.

+ Profit before tax to Sales up from 0.8% to 3.3%.

+ Debt to Equity down 83.5% from 39.9 to 6.6.

+ Total liabilities to Total assets down 5.1% from 1.0 to 0.9.

+ Current ratio up 19% from 0.6 to 0.8.

+ Fixed Assets to Total Assets up from 44.6% to 46.2%.

+ Total current assets to Total Assets up from 32.3% to 33.2%.

Unfavourable Changes:

+ Sales revenue down 4.7% from EUR26.1b ($US28.4b) to EUR24.8b ($US26.2b).

+ Current Debtors to Total Assets down from 9.5% to 8.1%.

+ Total Liabilities to EBITDA of 9.0 compares unfavourably with the Joseph Piotroski benchmark of <5. However, it has improved by 29.6% from the previous year's ratio of 12.8.

+ Total Liabilities to Operating Cash Flow of 9.7 compares unfavourably with the Joseph Piotroski benchmark of <4. However, it has improved by 20.4% from the previous year's ratio of 12.1.

Note:

+ Total revenue to total assets steady at 1.1.

+ Tax expenses to Sales up from 0.2% to 1.2%.

+ Long-term investments to Total Assets up from 5.8% to 5.9%.

+ Intangibles to Total Assets up from 5.4% to 5.6%.

SECTION 6

AIR FRANCE - KLM PROFILE

6.1 Activities

Air France-KLM is one of the world's leading airline companies. Net sales break down by activity as follows: - passenger transportation (77.5%): 71.4 million people transported in 2009/10; - freight transportation (11.6%; No. 2 worldwide): 1.5 Mt of merchandise transported; - maintenance services (4.6%); - other (6.3%): primarily catering service activities (Servair and KLM Catering Services) and charters (Transavia.com). At the end of March 2010, the group had a fleet of 625 airplanes divided between the domestic fleets of Air France (262, of which 148 owned and 114 leased) and KLM (113, of which 33 owned and 80 leased), and the regional fleets of KLM Cityhopper (48, of which 32 owned and 16 leased), Brit Air (43, of which 16 owned and 27 leased), City Jet (27, of which 16 owned and 11 leased), Regional (64, of which 23 owned and 41 leased), VLM Airlines (17, of which 15 owned and 2 leased) and other (51, of which 8 owned and 43 leased).

6.2 Industry & Sector

Classification LevelName of Sector
Business SectorCyclical Consumer Services
Industry GroupHotels & Entertainment Services
IndustryLeisure & Recreation
Economic SectorConsumer Cyclicals

6.3 Top Management

The chief executive officer and chairman is Jean-Marc Janaillac and the chief financial officer is Pierre-Francois Riolacci.

6.4 Issued Capital

Based on 300,219,278 issued shares the market capitalisation is EUR3.6 billion (US$4.2 billion).

SECTION 7

STOCK BUZZ

Corporate Wire

To view Recent Company Headlines, click here

April 04: Air France - KLM announces AGM

November 02 2016: KLM : Change in governance at Air France

August 08 2016: AIR FRANCE - KLM : JULY 2016 TRAFFIC

August 03 2016: AIR FRANCE - KLM : Declaration of number of voting rights at July 29, 2016

July 29 2016: AIR FRANCE - KLM : Availability of the 2016 First Half financial report

Contact: +33 (0)1 41 56 88 85

Physical Address: 45 rue de Paris POBox 90112 95747 Roissy Charles de Gaulle France

State/Province/Country: France

Country of Incorporation: France

Exchange: Euronext - Paris

ISIN: FR0000031122

FR:AF; EPA:AF; PA:AF; FP:AF; AIRF.PA

PermID: 4295866970

Air France Klm Sa, Air France-Klm, Astoria Financial Corp

Source: www.BuySellSignals.com