French stock report - Orange
Orange rises for a second consecutive day, a two-day rise of 1.3% September 21, 2018 17:30 CEST
NEWS BITES - EUROPE
Orange (FR:ORA), France's largest Fixed line telecommunications company by market cap, has risen 13.0c (1.0%) for a second consecutive day on Friday. This brought its two-day rise to 18.0c (1.3%), compared with the CAC 40 Index which rose 100.4 points (1.9%) in the two days for a relative price change of -0.5%. The 2-day rise was fuelled by a cumulative volume of 1.8 times the average 2-day volume of 6.5 million shares. Orange's stock last traded at EUR13.77. Its MCap is EUR36.6 billion (US$43.2 billion).
Highlights in today's Report:
SECTION 1 BULLISH SIGNALS
SECTION 2 BEARISH SIGNALS
SECTION 3 PRICE VOLUME DYNAMICS
SECTION 4 RELATED NEWS
SECTION 5 SUMMARY FINANCIALS
SECTION 6 PROFILE
SECTION 1 ORANGE BULLISH SIGNALS
Uptrend: The stock rose on high volatility today and expanding price range.
+ In the last three months the stock has hit a new 52-week high thrice.
+ The present value of EUR1,000 (PV1000) invested five years ago in Orange is EUR2,570, including a capital gain of EUR976 and dividend reinvested of EUR595.
+ 5 years Multiplier in EUR = 2.57x
+ Compound Annual Growth Rate (CAGR) in EUR = 20.8%
Present Value of USD1,000 invested 5 years ago:
+ The present value of USD1,000 (PV1000) invested five years ago in Orange is $US2,236, including a capital gain of $US719 and dividend reinvested of $US517.
+ 5 years ago EUR 1 equalled USD 1.3544
+ 5 years Multiplier in USD = 2.236x
+ Compound Annual Growth Rate (CAGR) in USD = 17.5%
Sep 21, 2018: EUR 1 equals USD 1.18
High Performance Indicators and rank of Orange in the French market:
|Description||ORA Value||Rank In Market|
|Today's Trading Turnover||EUR205 million (US$241.6 million)||In Top 2%|
|EBITDA Margin %||24.5||In Top Quartile|
|Earnings Yield %||7.3||In Top Quartile|
|Price/Earnings/Growth||0.4||In Top Quartile|
+ The relative yield of ORA, defined by its yield of 4.7%, divided by average yield of dividend yielding stocks in the CAC 40 Index of 2.9% is 164.5%. 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 EUR13.9 billion (US$16.3 billion). The Brand Value represents an impressive 18.2% of the estimated Enterprise Value of EUR76.3 billion (US$90 billion).
+ As per the Du Pont analysis, Return on Equity [ROE] is less than stellar at 7.1%; an improvement from 4.4% last year. ROE 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.
1.3 Undervaluation [compared with sector average]:
+ Price/Earnings of 13.8 [21.6].
+ Price/Sales of 0.9 [1.0]. We estimate Orange stock is trading at a current year Price/Sales of 0.9 and a forward year Price/Sales of 0.9.
+ Return on Equity 7.1% [6.3%].
+ Return on Assets 2.2% [2.0%].
+ Dividend yield of 4.7% [3.6%].
+ Price to EBITDA of 3.6 [4.5].
SECTION 2 ORANGE BEARISH SIGNALS
+ The price dropped 3.4% in the last month.
Low Performance Indicators and rank of Orange in the French market:
|Description||ORA Value||Rank In Market|
|Total Debt to Equity||1.2||In Bottom Quartile|
|Return on Assets [ROA] %||2.2||In Bottom Quartile|
+ 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.
2.3 Overvaluation [compared with sector average]:
+ Return on Capital Employed 4.9% [6.1%].
SECTION 3 ORANGE PRICE VOLUME DYNAMICS
+ Volume: there were 14,890,000 shares worth EUR205 million (US$241.6 million) traded today. In the past week, volume was 1.2 times average and the shares were up 1.0%. The rise has been propped up by high volume of 2.3 times the average daily volume of 6.5 million shares.
+ Orange is at a discount of 7.8% to its 12-month high of EUR14.94 on July 09. It is also at a premium of 6.6% 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 EUR1,093, comprising a capital gain of EUR45 and dividend reinvested of EUR48.
|CAC 40 Index||1,026||1,003||1,043|
3.2 Turnover Rate & Turnover Period:
+ The turnover rate in the 12 months to date was 63.6% (or a turnover period of 1 year 6 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.
3.3 Moving Annual Return (Past 5 years)
Based on a dynamic start date of 5 years ago, the Moving Annual Return has consistently exceeded 4%.
|ORA||Close (EUR)||Dividends (EUR)||Capital Gain %||% Yield||Annual Return %|
|1 Yr ago||13.17||0.6||3.9||4.7||8.7|
|2 Yrs ago||12.67||0.6||0.2||4.7||4.9|
|3 Yrs ago||12.65||0.6||24||5.9||29.9|
|4 Yrs ago||10.2||0.8||46.4||11.5||57.9|
Close 5 years ago EUR6.97
3.4 Beta & Alpha:
+ Beta: the Beta of Orange stock is 0.8. 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 0.2. The actual return of 2.43% exceeded the expected return of 2.2%, reflecting outperformance.
3.5 The Past Two Years
+ Orange (FR:ORA), has strengthened 96.39c (7.5%) over the past two years, compared with the CAC 40 Index which rose 1,084.6 points (24.6%) in the two years for a relative price change of -17.1%. The shares rose 36.63c (2.9%) a year ago and 59.76c (4.5%) in the past year to close at EUR13.77 today.
SECTION 4 ORANGE RELATED NEWS
+ BSS/News Bites:
Orange is placed 217/575 in BSS News Bites' ranking of French performers in the past year, a percentile ranking of 62.
+ Vanguard Total World Stock ETF 7587:
The stock was one of 7587 global stocks selected by Vanguard Total World Stock ETF (VT) who sold 1,864 shares in the period Jun 30, 2018 to Jul 31, 2018 worth $US-26,899 at an estimated Volume Weighted Average Price (VWAP) of $US14.4308. As at Jul 31, 2018, the Vanguard Total World Stock ETF held 619,955 shares worth $US10,470,026 or 0.06% by value of the ETF's portfolio [Ranked 300 out of 7587 by value and 15 out of 138 for France].
SECTION 5 ORANGE SUMMARY FINANCIALS
5.1 Dividend History
+ Trailing 12 months dividend has deteriorated from 80.0c in 2014 to 65.0c in 2018.
5.2 Financials Summary (Past 3 years)
|Year ended||Dec 2017||Dec 2016||Dec 2015|
|Sales (USD B)||48||48.7||47.8|
|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 6 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%).
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 EUR36.6 billion (US$43.2 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