French stock report - Orange

FRA

Orange falls for a second consecutive day, a two-day fall of 0.7% October 18, 2017 17:30 CEST

NEWS BITES - EUROPE

Orange (FR:ORA), France's largest Fixed line telecommunications company by market cap, has fallen 7.0c (0.5%) for a second consecutive day on Wednesday. This brought its two-day fall to 10.0c (0.7%), compared with the CAC 40 Index which rose 20.9 points (0.4%) in the two days for a relative price change of -1.1%. Cumulative volume in the 2 days was 0.9 times the average 2-day volume of 6.4 million shares. The stock last traded at EUR13.80.

Highlights in today's Report:

SECTION 1 BEARISH SIGNALS

Fundamentals, Overvaluation [compared with sector average], Technicals, Low Performance Indicator

SECTION 2 BULLISH SIGNALS

Fundamentals, Undervaluation [compared with sector average], Technicals, High Performance Indicators

SECTION 3 PRICE VOLUME DYNAMICS

Technicals, Moving Annual Return, Beta, Turnover Rate & Turnover Period

SECTION 4 RANKING

Global, Independent Ratings

SECTION 5 FINANCIALS

Financials Summary, Trailing 12 Months Dividends

SECTION 6 PROFILE

Activities, Top Management, Issued Capital

SECTION 7 STOCK BUZZ

SECTION 1 ORANGE BEARISH SIGNALS

1.1 Fundamentals:

+ Net profit margin has averaged 4.1% 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 4.4%. This is computed as net profit margin of 2.5% times asset turnover [sales/assets] of 0.44 times leverage factor [total assets/shareholders' equity] of 3.1. Also, this has deteriorated from 9.1% last year.

Du Pont AnalysisROEProfit MarginAsset TurnoverEquity Multiplier
Current Year4.42.50.443.1
Previous Year9.16.20.453.0

+ Profit growth and EBITDA growth have shown signs of deterioration in recent years. [Year ended, all figures in %]

YearRevenue GrowthEPS Growth
Dec 161.913
Dec 151.9196.8

1.2 Overvaluation [compared with sector average]:

+ Return on Equity 4.4% [10.7%].

+ Return on Assets 1.1% [3.4%].

1.3 Technicals:

Downtrend: The stock dropped on high volatility today.

+ The price decreased 0.9% in the last week and 1.5% in the last month.

1.4 Low Performance Indicator:

DescriptionValueRank In Market
Return on Assets [ROA] %1.1In Bottom Quartile

SECTION 2 ORANGE BULLISH SIGNALS

2.1 Fundamentals:

+ The relative yield of the stock, defined by its yield of 4.3%, divided by average yield of dividend yielding stocks in the CAC 40 Index of 1.2% is 359.5%. This suggests the 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 brand value at EUR13.9 billion (US$16.3 billion). The Brand Value represents an impressive 31.9% of the estimated Enterprise Value of EUR43.6 billion (US$51.3 billion).

2.2 Undervaluation [compared with sector average]:

+ Price/Sales of 0.9 [1.1]. We estimate Orange stock is trading at a current year Price/Sales of 0.9 and a forward year Price/Sales of 0.8.

+ Price/Earnings/Growth of 0.9 [1.5].

+ Dividend yield of 4.3% [3.3%].

2.3 Technicals:

+ The present value of EUR1,000 (PV1000) invested five years ago in Orange is EUR1,774, including a capital gain of EUR488 and dividend reinvested of EUR286.

+ 5 years Multiplier in EUR = 1.774x

+ Compound Annual Growth Rate (CAGR) in EUR = 12.2%

Present Value of USD1,000 invested 5 years ago:

+ The present value of USD1,000 (PV1000) invested five years ago in Orange is $US1,602, including a capital gain of $US344 and dividend reinvested of $US258.

+ 5 years ago EUR 1 equalled USD 1.3032

+ 5 years Multiplier in USD = 1.602x

+ Compound Annual Growth Rate (CAGR) in USD = 9.9%

Oct 18, 2017: EUR 1 equals USD 1.18

2.4 High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverEUR78 million (US$91.8 million)In Top 2%
Earnings Yield %7.5In Top Quartile
Total Debt to Equity0.1In Top Quartile

SECTION 3 PRICE VOLUME DYNAMICS

3.1 Technicals:

+ Volume: there were 5,650,000 shares worth EUR78 million (US$91.8 million) traded today. In the past week, volume was 0.8 times average and the shares were down 0.9%. The volume was 0.9 times the average daily trading volume of 6.4 million shares.

+ Orange is at a discount of 12.7% to its 12-month high of EUR15.80 on May 23. It is also at a premium of 5.4% to the 12-month low of EUR13.09 on December 05, 2016.

+ The present value of EUR1,000 (PV1000) invested one year ago in Orange is EUR1,034, comprising a capital loss of EUR9 and dividend reinvested of EUR42.

PV10001-week1-month1-year
ORA.FR9919851,034
CAC 40 Index1,0051,0191,194

3.2 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has consistently exceeded 1%.

ORAClose (EUR)Dividends (EUR)Capital Gain / (Loss) %% YieldAnnual Return %
Oct 1813.80.6(0.9)4.33.5
1 Yr ago13.920.20.11.41.5
2 Yrs ago13.910.636.15.942.0
3 Yrs ago10.220.82.7810.7
4 Yrs ago9.950.27.32.29.4

Close 5 years ago EUR9.27

3.3 Beta:

+ 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.

3.4 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 64.3% (or a turnover period of 1 year 6 months). This average length of ownership of the stock at 0.8 times the average holding period of 1 year 10 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.

SECTION 4 RANKING

4.1 Global Rank [out of 47,797 stocks] and Rank in the Europe Region [out of 8,438 stocks]

DescriptionValueGlobal RankIn Eur Region
MCap (US$)43.2B30989
Total Assets (US$)111.2B473119
Revenue (US$)48.9B21176
Net Profit (US$)3.4B27656
Return on Equity %4.421,9483,806
Net Profit Margin %2.522,6403,655
Price/Earnings13.37,8341,460
Yield %4.35,351931
PV$1000 (1Year) US$*1,11019,7904,077
US$* Change (1Year) %8.220,6334,246

* 1 year ago EUR 1 = USD 1.1

Oct 18, 2017: EUR 1 equals USD 1.18

4.2 Independent Ratings

Orange was ranked 86 in the Industry Week list of the world's largest 1000 manufacturers by Revenues in 2015; a deterioration over a year from rank 73 in 2014.

It is the 110th largest by revenue in the FT Global 500.

It was ranked 124 by Newsweek and Corporate Knights Capital in the World's 500 Greenest Companies 2016. It had outstanding scores of 63.1% in Water productivity, 60.8% in Carbon productivity and 40.4% in Energy productivity.

It is the 169th largest by revenue in the Forbes Global 2000.

It is placed 445/573 in BSS News Bites' ranking of French performers in the past year, a percentile ranking of 23.

SECTION 5 ORANGE FINANCIALS

5.1 Financials Summary

Year endedDec 2016Dec 2015Dec 2014
Sales (USD B)49.348.447.5
Pretax (USD)--3.5B
Net (USD B)3.53.11.5
EPS (EUR)1.040.920.31

Net profit was up 10.7% from US$3.1 billion in 2015 to US$3.5 billion in 2016. Earnings Per Share (EPS) was up 13% from 92.0c to EUR1.04.

5.2 Trailing 12 Months Dividends

Trailing 12 Months ToValue (c)
18 Oct 201760
18 Oct 201620
18 Oct 201560
18 Oct 201480
18 Oct 201320

SECTION 6 ORANGE PROFILE

6.1 Activities

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%).

6.2 Top Management

The chief executive officer and chairman is Stephane Richard.

6.3 Issued Capital

Based on 2,660,056,599 issued shares the market capitalisation is EUR36.7 billion (US$43.2 billion).

SECTION 7 STOCK BUZZ

Corporate Wire

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August 03: Orange's Board of Directors decides to co-opt Christel Heydemann as a new director

Orange's Board of Directors decides to co-opt Christel Heydemann as a new director

Orange's Board of Directors, which met on 26 July 2017, decided to appoint a new director, Ms. Christel Heydemann, by co-optation following a proposal by the Governance and Corporate Social and Environmental Responsibility Committee (CGRSE).

She will replace Jose Luis Duran, director since 2008, who resigned after being appointed as CEO of Value Retail PLC and due to his functions as a member of the Board of Directors of Inditex and Mars Inc.

Christel Heydemann's appointment will be submitted for ratification at the Orange Group's next Annual General Meeting in May 2018.

By naming Christel Heydemann, the Board of Directors has chosen a professional with recognised expertise in areas that represent major challenges for the Group (digital, telecommunications, international).

The Board of Directors now comprises 15 members, including 7 women, centred around Stephane Richard, Orange Chairman and CEO.

Christel Heydemann is Executive Vice President France Operations at Schneider Electric and a member of the Schneider Electric Executive Committee since April 2017.

December 22 2016: Orange signs the renewal of its syndicated credit facility with 24 banks

Orange signed today with 24 international banks a new multi-currency EUR 6 billion syndicated revolving facility in order to refinance in advance the previous syndicated loan expiring January 2018.

The new facility, which has an initial December 2021 maturity, includes two one-year extension options.

December 02 2016: Orange sponsors the Women's Forum 2016

Orange sponsors the Women's Forum for the 12th consecutive year

Orange is proud to sponsor the Women's Forum for the 12th consecutive year, to be held in Deauville from November 30th to December 2nd, 2016. Once again, this sponsorship is a strong statement of Orange's commitment to equal opportunity in the workplace for men and women.

October 25 2016: Orange: 3rd quarter 2016 financial information

Accelerated growth in 3rd quarter revenue and restated EBITDA, driven by very high-speed broadband and convergence

The Group achieved a solid commercial performance in the 3rd quarter of 2016, driven by very high-speed broadband and convergence, with 845,000 net mobile contract 1 additions and 348,000 additional fibre customers.

Contact: +33 (0)1 44 44 22 22

Physical Address: 78 rue Olivier de Serres 75505 Paris Cedex 15 France

State/Province/Country: France

Country of Incorporation: France

Exchange: Euronext - Paris

ISIN: FR0000133308

FR:ORA; EPA:ORA; PA:ORA; FP:ORA; ORAN.PA

PermID: 4295867447

Orange, Orange Sa, Ormat Technologies Inc

Source: www.BuySellSignals.com