French stock report - Orange

FRA

UPDATE: Orange drops on high volatility January 18, 2018 17:30 CET

NEWS BITES - EUROPE

Orange (FR:ORA), France's largest Fixed line telecommunications company by market cap, traded between an intraday low of EUR14.40 and a high of EUR14.68. The average daily volatility of 1.8% places the stock in the 3rd quartile in the market, meaning it is the mildly volatile. Today its volatility (highest price minus lowest price/lowest price) of 1.9% was 1.1 times the average daily volatility of 1.8%, up from 0.7% on Wednesday and 1.2% on Tuesday. A fall in the price on high volatility is a bearish signal. The stock price has decreased 9.0c (0.6%) from its last trading session of January 17 to close at EUR14.46. Compared with the CAC 40 Index which rose 0.8 points (0.02%) in the day, the relative price change was -0.6%. The volume was 0.9 times the average daily trading volume of 6.2 million shares.

ORANGE ISSUED NEW PATENT IN THE WEEK OF JANUARY 16, 2018

Relationship management system and method of operation thereof [9,871,769]

A communication method to publish a user message suitable for one or more vendors. The communication method may be performed by one or more controllers and may include one or more acts of receiving a message from a user station of a user; processing the received message to anonymize the message to conceal an identity of the user; publishing the anonymized message and anonymous link information; receiving a request from a vendor of the one or more vendors for user context information corresponding to the user in response to the published anonymized message; receiving restriction information in accordance with a user persona selected by the user from a plurality of user personas that are each associated with the user; and providing the user context information in accordance with the restriction information.

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Highlights in today's Report:

SECTION 1 BEARISH SIGNALS

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

SECTION 2 BULLISH SIGNALS

Fundamentals, Undervaluation [compared with sector average], Technicals, High Performance Indicators, A positive finish to 2017

SECTION 3 PRICE VOLUME DYNAMICS

Technicals, Moving Annual Return, Beta & Alpha, 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:

+ The price decreased 1.8% in the last month.

1.4 Low Performance Indicators:

DescriptionValueRank In Market
Return on Assets [ROA] %1.1In Bottom Quartile
EPS Growth %13In Bottom Quartile

SECTION 2 ORANGE BULLISH SIGNALS

2.1 Fundamentals:

+ The relative yield of the stock, defined by its yield of 4.5%, divided by average yield of dividend yielding stocks in the CAC 40 Index of 2.5% is 177.9%. 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 EUR13.4 billion (US$16.3 billion). The Brand Value represents an impressive 29.6% of the estimated Enterprise Value of EUR45.3 billion (US$55.2 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 0.9.

+ Price/Earnings/Growth of 1 [1.6].

+ Dividend yield of 4.5% [3.4%].

2.3 Technicals:

+ The present value of EUR1,000 (PV1000) invested five years ago in Orange is EUR2,128, including a capital gain of EUR746 and dividend reinvested of EUR382.

+ 5 years Multiplier in EUR = 2.128x

+ Compound Annual Growth Rate (CAGR) in EUR = 16.3%

Present Value of USD1,000 invested 5 years ago:

+ The present value of USD1,000 (PV1000) invested five years ago in Orange is $US1,950, including a capital gain of $US600 and dividend reinvested of $US350.

+ 5 years ago EUR 1 equalled USD 1.3297

+ 5 years Multiplier in USD = 1.95x

+ Compound Annual Growth Rate (CAGR) in USD = 14.3%

Jan 18, 2018: EUR 1 equals USD 1.22

2.4 High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverEUR76.6 million (US$93.4 million)In Top 2%
Earnings Yield %7.2In Top Quartile
Total Debt to Equity0.1In Top Quartile

2.5 A positive finish to 2017

The stock has increased 35.78c (or 2.5%) in FY 2017 to close at EUR14.49. The average daily volume of 6.1 million shares in FY 2017 was 0.9 times the average daily volume in FY 2016.

SECTION 3 PRICE VOLUME DYNAMICS

3.1 Technicals:

+ Volume: there were 5,300,000 shares worth EUR76.6 million (US$93.4 million) traded today. In the past week, volume was 0.9 times average and the shares were up 1.0%.

+ Orange is at a discount of 6.9% to its 12-month high of EUR15.53 on May 23, 2017. It is also at a premium of 9.0% to the 12-month low of EUR13.27 on October 25, 2017.

+ The present value of EUR1,000 (PV1000) invested one year ago in Orange is EUR1,027, comprising a capital loss of EUR17 and dividend reinvested of EUR45.

PV10001-week1-month1-year
ORA.FR1,0109821,027
CAC 40 Index1,0011,0231,132

3.2 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has consistently exceeded 0%.

ORAClose (EUR)Dividends (EUR)Capital Gain / (Loss) %% YieldAnnual Return %
Jan 1814.460.65(1.7)4.42.7
1 Yr ago14.710.2(1.1)1.30.2
2 Yrs ago14.880.68.94.413.3
3 Yrs ago13.660.752.17.859.9
4 Yrs ago8.980.58.4614.5

Close 5 years ago EUR8.28

3.3 Beta & Alpha:

+ Beta: the Beta of Orange stock is 0.6. 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 -8.7. The actual return of -0.38% fell short of the expected return of 8.4%, reflecting underperformance.

3.4 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 59.4% (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 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 47,422 stocks] and Rank in the Europe Region [out of 8,526 stocks]

DescriptionValueGlobal RankIn Eur Region
MCap (US$)46.9B29581
Total Assets (US$)116.1B470120
Revenue (US$)51.1B20473
Net Profit (US$)3.6B27356
Return on Equity %4.422,2723,830
Net Profit Margin %2.522,8833,645
Price/Earnings14.07,3251,472
Yield %4.55,194922
PV$1000 (1Year) US$*1,18118,9674,103
US$* Change (1Year) %14.520,0054,341

* 1 year ago EUR 1 = USD 1.07

Jan 18, 2018: EUR 1 equals USD 1.22

4.2 Independent Ratings

+ Top 50 BCG:

Orange is a new entrant in Boston Consulting Group's list of Top 50 Most Innovative Companies 2016, ranked 44

+ FT 500:

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

+ Fortune 500:

It was ranked 210 by total revenues in the Fortune 500 annual list for 2017; a deterioration over a year from rank 204 in 2016.

+ Newsweek 500:

It was ranked 124 by Newsweek and Corporate Knights Capital in the World's 500 Greenest Companies 2016. It had outstanding scores of 9.2% in Carbon productivity, 8.1% in Waste productivity and 6.2% in Energy productivity.

+ Industryweek 1000:

It is a new entrant in the Industry Week list of the world's largest 1000 manufacturers by Revenues in 2016, ranked 79.

+ Forbes 2000:

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

+ BSS/News Bites:

It is placed 445/591 in BSS News Bites' ranking of French performers in the past year, a percentile ranking of 25.

+ Vanguard Total World Stock ETF 7457:

The stock was one of 7457 global stocks selected by Vanguard Total World Stock ETF (VT). As at November 30, 2017, the Vanguard Total World Stock ETF held 525,443 shares worth $US8,873,718 or 0.06% by value of the ETF's portfolio [Ranked 295 out of 7457 by value and 14 out of 126 for France].

SECTION 5 ORANGE FINANCIALS

5.1 Financials Summary

Year endedDec 2016Dec 2015Dec 2014
Sales (USD B)50.249.348.3
Pretax (USD)--3.5B
Net (USD B)3.53.21.5
EPS (EUR)1.040.920.31

Net profit was up 10.7% from US$3.2 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 Jan 201865
18 Jan 201720
18 Jan 201660
18 Jan 201570
18 Jan 201450

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 EUR38.5 billion (US$46.9 billion).

SECTION 7 STOCK BUZZ

Corporate Wire

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December 07 2017: Orange: total number of shares and voting rights at November 30, 2017

Orange: information on the total number of shares and voting rights referred to in Article L.233-8 II of the French Commercial Code and Article 223-16 of the General Regulations of the Autorite des Marches Financiers.

In application of Article L.225-123 of the French Commercial Code (Code de commerce), as from 3 April 2016, a double voting right is automatically granted to fully paid-up shares that have been held in registered form and under a single shareholder name for at least two years.

November 14 2017: Orange announces dividend

Orange today announced an interim dividend of 25.0c per share. The ex dividend date is Tuesday, December 05, 2017 and the record date is Wednesday, December 06, 2017 and it is payable on Thursday, December 07.

August 03 2017: 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.

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