French stock report - Orange
Orange decreases June 20, 2018 17:30 CEST
NEWS BITES - EUROPE
Orange (FR:ORA), France's largest Fixed line telecommunications company by market cap, has decreased 9.0c (0.6%) from its last trading session of June 19 to close at EUR14.36. Compared with the CAC 40 Index which fell 18.3 points (0.3%) in the day, the relative price change was -0.3%. The volume of 6.4 million shares was close to average trading.
Highlights in today's Report:
SECTION 1 BEARISH SIGNALS
SECTION 2 BULLISH SIGNALS
SECTION 3 PRICE VOLUME DYNAMICS
SECTION 4 RELATED NEWS
SECTION 5 GLOBAL RANKING
SECTION 6 SUMMARY FINANCIALS
SECTION 7 PROFILE
SECTION 1 ORANGE BEARISH SIGNALS
+ Total Liabilities/EBITDA of 6.4 which compares unfavourably with the Joseph Piotroski benchmark of 5.
+ Net profit margin has averaged 4.6% in the last 3 years. This suggests the company is less profitable with a low margin of safety.
+ As per the Du Pont analysis, Return on Equity is less than stellar at 7.1%. This is computed as net profit margin of 5.1% times asset turnover [sales/assets] of 0.43 times leverage factor [total assets/shareholders' equity] of 3.1.
1.2 Overvaluation [compared with sector average]:
+ Return on Capital Employed 4.9% [6.0%].
+ The price decreased 1.2% in the last week. The fall has been exacerbated by firm volume of 1.2 times average for the week.
1.4 Low Performance Indicators:
|Description||ORA Value||Rank In Market|
|Total Debt to Equity||1.2||In Bottom Quartile|
|Return on Assets [ROA] %||2.2||In Bottom Quartile|
SECTION 2 ORANGE BULLISH SIGNALS
+ The earnings yield of 7.0% has a spread of 6.3% vs the 10-year treasury yield of 0.7%. This is the widest and most attractive spread in the past three months.
+ The relative yield of ORA, defined by its yield of 4.5%, divided by average yield of dividend yielding stocks in the CAC 40 Index of 3.1% is 146.6%. This suggests Orange stock is undervalued in dividend yield terms.
+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.4. Compared with the rest of the market the stock is undervalued and ranks in the top quartile of stock by value of Q Ratio.
+ Brandirectory have estimated Orange's brand value at EUR14.1 billion (US$16.3 billion). The Brand Value represents an impressive 18.1% of the estimated Enterprise Value of EUR77.9 billion (US$90.2 billion).
2.2 Undervaluation [compared with sector average]:
+ Price/Earnings of 14.4 [22.2].
+ Price/Sales of 0.9 [1.2]. We estimate Orange stock is trading at a current year Price/Sales of 0.9 and a forward year Price/Sales of 0.9.
+ Dividend yield of 4.5% [3.5%].
+ Price to EBITDA of 3.8 [4.6].
+ In the last three months the stock has hit a new 52-week high twice.
+ The present value of EUR1,000 (PV1000) invested ten years ago in Orange is EUR1,183, including a capital loss of EUR90 and dividend reinvested of EUR274.
+ 10 years Multiplier in EUR = 1.183x
+ Compound Annual Growth Rate (CAGR) in EUR = 1.7%
Jun 20, 2018: EUR 1 equals USD 1.16
2.4 Oversold/Bullish/Support Signals:
+ The stock is oversold according to the Williams % R indicator of -84.7, suggesting the price is close to its 14-day low of EUR14.27.
2.5 High Performance Indicators:
|Description||ORA Value||Rank In Market|
|Today's Turnover||EUR88 million (US$101.9 million)||In Top 2%|
|Earnings Yield %||7.0||In Top Quartile|
|EBITDA Margin %||24.5||In Top Quartile|
SECTION 3 ORANGE PRICE VOLUME DYNAMICS
+ Volume: there were 6,130,000 shares worth EUR88 million (US$101.9 million) traded today. In the past week, volume was 1.2 times average and the shares were down 1.2%.
+ Orange is at a discount of 3.4% to its 12-month high of EUR14.86 on June 12. It is also at a premium of 11.2% to the 12-month low of EUR12.91 on October 25, 2017.
+ The present value of EUR1,000 (PV1000) invested one year ago in Orange is EUR1,089, comprising a capital gain of EUR41 and dividend reinvested of EUR48.
|CAC 40 Index||985||988||1,015|
3.2 Moving Annual Return
Based on a dynamic start date of 5 years ago, the Moving Annual Return has consistently exceeded 8%.
|ORA||Close (EUR)||Dividends (EUR)||Capital Gain %||% Yield||Annual Return %|
|1 Yr ago||13.79||1||5.3||7.6||12.9|
|2 Yrs ago||13.1||0.6||4.8||4.8||9.6|
|3 Yrs ago||12.49||0.6||16.3||5.6||21.9|
|4 Yrs ago||10.74||0.8||50.6||11.2||61.9|
Close 5 years ago EUR7.13
3.3 Beta & Alpha:
+ Beta: the Beta of Orange stock is 0.7. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.
+ Alpha: the Alpha of the stock is 0.7. The actual return of 4.54% exceeded the expected return of 3.9%, reflecting outperformance.
3.4 Turnover Rate & Turnover Period:
+ The turnover rate in the 12 months to date was 59.8% (or a turnover period of 1 year 8 months). This average length of ownership of the stock at 0.9 times the average holding period of 1 year 9 months for stocks in the CAC 40 Index suggests a larger number of speculators on the share register, making it less safe for long-term investors.
3.5 The Past Quarter
+ Orange (FR:ORA), has gained 82.04c (or 6.1%) in the past quarter to close at EUR14.36 today. Compared with the CAC 40 Index which rose 119.9 points (or 2.3%) in the past quarter, this represented a relative price increase of 3.8%.
SECTION 4 ORANGE RELATED NEWS
+ BSS/News Bites:
Orange is placed 237/554 in BSS News Bites' ranking of French performers in the past year, a percentile ranking of 57.
+ Vanguard Total World Stock ETF 7581:
The stock was one of 7581 global stocks selected by Vanguard Total World Stock ETF (VT) who bought 46,434 shares in the period Jan 31, 2018 to Apr 30, 2018 worth $US668,524 at an estimated Volume Weighted Average Price (VWAP) of $US14.3973. As at Apr 30, 2018, the Vanguard Total World Stock ETF held 602,007 shares worth $US10,512,538 or 0.07% by value of the ETF's portfolio [Ranked 285 out of 7581 by value and 15 out of 134 for France].
SECTION 5 ORANGE GLOBAL RANKING
Global Rank [out of 47,592 stocks] and Rank in the Europe Region [out of 8,534 stocks]
|Description||Value||Global Rank||In Eur Region|
|Total Assets (US$)||110.1B||501||121|
|Net Profit (US$)||2.2B||525||122|
|Return on Equity %||7.1||18,450||3,370|
|Net Profit Margin %||5.1||18,075||2,914|
|PV$1000 (1Year) US$*||1,126||14,361||2,600|
|US$* Change (1Year) %||7.9||15,407||2,825|
* 1 year ago EUR 1 = USD 1.12
Jun 20, 2018: EUR 1 equals USD 1.16
SECTION 6 ORANGE SUMMARY FINANCIALS
6.1 Dividend History
+ Trailing 12 months dividend has deteriorated from 80.0c in 2014 to 65.0c in 2018.
6.2 Financials Summary
|Year ended||Dec 2017||Dec 2016||Dec 2015|
|Sales (USD B)||47.5||48.2||47.3|
|Net (USD B)||2.2||3.4||3.1|
+ Net profit was down 35.1% from US$3.4 billion in 2016 to US$2.2 billion in 2017.
+ Earnings Per Share (EPS) was down 3.8% from EUR1.04 to EUR1.0.
SECTION 7 ORANGE PROFILE
Orange is the French leader of telecommunications company. Net sales break down by activity as follows: - telecommunication services for individuals (84.5%): mobile telephone services (81.6% of sales; 132.6 million clients in 2009; Orange name in France, the United Kingdom and Caribbean, FTP Espana in Spain and PTK Centertel in Poland), fixed telephone services and Internet access (15.5%). The remaining sales (2.9%) concerns services intended for telecommunication operators; - telecommunication services to businesses (15.5%): fixed telephone services (41.9% of sales), network services (28.7%), integration and information management for communication applications (18.1%), and other (11.3%). Net sales break down geographically as follows: France (44%), the United Kingdom (9.5%), Spain (7.2%), Poland (7.1%), Europe (16.7%) and other (15.5%).
7.2 Top Management
The chief executive officer and chairman is Stephane Richard.
7.3 Issued Capital
Based on 2,660,056,599 issued shares the market capitalisation is EUR38.2 billion (US$44.2 billion).
Contact: +33 (0)1 44 44 22 22
Physical Address: 78 rue Olivier de Serres 75505 Paris Cedex 15 France
Country of Incorporation: France
Exchange: Euronext - Paris
FR:ORA; EPA:ORA; PA:ORA; FP:ORA; ORAN.PA
Orange, Orange Sa, Ormat Technologies Inc