German stock report - Bayerische Motoren Werke AG
Bayerische Motoren Werke underperforms 83% of the market June 18, 2018 20:00 CEST
NEWS BITES - EUROPE
Bayerische Motoren Werke AG (ETR:BMW), Germany's 2nd largest Automobiles company by market cap, has decreased 99.0c (1.2%) from its last trading session of June 15 to close at EUR84.75. Compared with the DAX Index which fell 170.8 points (1.3%) in the day, the relative price increase was 0.2%. The volume was 0.9 times the average daily trading volume of 147 million shares. In the German market of 841 stocks and 1 unit traded today, Bayerische Motoren Werke's stock has a 1-month relative price strength of 17 indicating it has underperformed 83% of the market. A price fall combined with a low relative strength is a bearish signal.
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 BAYERISCHE MOTOREN WERKE BEARISH SIGNALS
+ Total Liabilities/EBITDA of 13.9 which compares unfavourably with the Joseph Piotroski benchmark of 5.
1.2 Overvaluation [compared with sector average]:
+ Price/Sales of 0.5 [0.3].
+ Year-on-Year Earnings Growth of 7.7% [28.6%].
+ Price/Earnings/Growth of 0.8 [0.3].
+ The price decreased 0.7% in the last week and tumbled 8.0% in the last month.
+ Compared with the DAX Index which fell 0.02% for the week and 1.8% for the month, this represented a relative price decrease for Bayerische Motoren Werke's stock of 0.7% for the week and 6.2% for the month.
+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 85.97 minus the 26-day EMA of 87.38 is negative 1.41 suggesting a bearish signal. Both EMA prices are falling, another bearish signal.
+ Falls to Rises: in the past month the number of falls outnumbered rises 14:7 or 2:1.
1.4 Low Performance Indicators:
|Description||BMW Value||Rank In Market|
|Total Debt to Equity||2.0||In Bottom Quartile|
|EPS Growth %||7.7||In Bottom Quartile|
SECTION 2 BAYERISCHE MOTOREN WERKE BULLISH SIGNALS
+ The P/E of 8.1 multiplied by the P/NTA of 1.3 is 10.7. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.
+ The earnings yield of 12.3% has a spread of 11.9% vs the 10-year treasury yield of 0.4%. This is the widest and most attractive spread in the past six months.
+ The relative yield of BMW, defined by its yield of 4.7%, divided by average yield of dividend yielding stocks in the DAX Index of 3.1% is 151.8%. This suggests Bayerische Motoren Werke stock is undervalued in dividend yield terms.
+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.3. Compared with the rest of the market the stock is undervalued and ranks in the top quartile of stock by value of Q Ratio.
+ Economic Value Added defined by Net Operating Profit After Tax of EUR7 billion less Cost of Capital of EUR471.3 million was EUR6.5 billion. The multiple EVA/Cost of Capital was exemplary at 13.8 times.
+ Bayerische Motoren Werke is cash rich with Cash to Market Capitalisation at 13.8%.
+ Interest cover defined by EBIT/I is 20.8 times. This indicates it is less leveraged.
+ Net profit margin has averaged 7.2% in the last 3 years. This is better than the sector average of 5.5% and suggests a high margin of safety.
+ Brandirectory have estimated Bayerische Motoren Werke's brand value at EUR20 billion (US$23.2 billion). The Brand Value represents an impressive 13.8% of the estimated Enterprise Value of EUR145.7 billion (US$168.8 billion).
+ As per the Du Pont analysis, Return on Equity of 14.8% is better than sector average of 9.9%. This is computed as net profit margin of 7.3% times asset turnover [sales/assets] of 0.5 times leverage factor [total assets/shareholders' equity] of 4.0.
2.2 Undervaluation [compared with sector average]:
+ Price to Book of 1.3 [1.5]. We estimate Bayerische Motoren Werke stock is trading at a current year Price to Book of 1.2 and a forward year Price to Book of 1.
+ Return on Equity 14.8% [9.9%].
+ Return on Assets 3.7% [2.6%].
+ Return on Capital Employed 8.4% [7.3%].
+ Dividend yield of 4.7% [1.1%].
+ The present value of EUR1,000 (PV1000) invested ten years ago in Bayerische Motoren Werke is EUR3,392, including a capital gain of EUR1,627 and dividend reinvested of EUR765.
+ 10 years Multiplier in EUR = 3.392x
+ Compound Annual Growth Rate (CAGR) in EUR = 13.0%
Present Value of USD1,000 invested 10 years ago:
+ The present value of USD1,000 (PV1000) invested ten years ago in Bayerische Motoren Werke is $US2,555, including a capital gain of $US979 and dividend reinvested of $US576.
+ 10 years ago EUR 1 equalled USD 1.5386
+ 10 years Multiplier in USD = 2.555x
+ Compound Annual Growth Rate (CAGR) in USD = 9.8%
Jun 18, 2018: EUR 1 equals USD 1.16
2.4 Oversold/Bullish/Support Signals:
+ The stock is oversold according to the Williams % R indicator of -81.3, suggesting the price is close to its 14-day low of EUR84.02.
2.5 High Performance Indicators:
|Description||BMW Value||Rank In Market|
|Today's Turnover||EUR11.7 billion (US$13.6 billion)||In Top 1%|
|Interest Cover||20.8||In Top Quartile|
|Price to Sales||0.5||In Top Quartile|
|P/E * P/NTA||10.71||In Top Quartile|
|Earnings Yield %||12.3||In Top Quartile|
|Revenue Per Employee||EUR754,941 (US$874,931)||In Top Quartile|
|Cash to MCap %||13.8||In Top Quartile|
SECTION 3 BAYERISCHE MOTOREN WERKE PRICE VOLUME DYNAMICS
+ Volume: there were 138,005,422 shares worth EUR11.7 billion (US$13.6 billion) traded today. In the past week, volume was 1.4 times average and the shares were down 0.7%. The volume was 0.9 times the average daily trading volume of 147 million shares.
+ Bayerische Motoren Werke is at a discount of 13.1% to its 12-month high of EUR97.50 on January 23. It is also at a premium of 10.0% to the 12-month low of EUR77.07 on July 28, 2017.
+ The present value of EUR1,000 (PV1000) invested one year ago in Bayerische Motoren Werke is EUR1,060, comprising a capital gain of EUR17 and dividend reinvested of EUR44.
3.2 Moving Annual Return
Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 4 of the last 5 years. An investment a year ago in BMW would have produced a return of 6.5%.
|BMW||Close (EUR)||Dividends (EUR)||Capital Gain / (Loss) %||% Yield||Annual Return %|
|1 Yr ago||83.36||3.5||26.5||5.3||31.8|
|2 Yrs ago||65.9||3.2||(30.5)||3.4||(27.1)|
|3 Yrs ago||94.76||2.9||8.7||3.3||12.0|
|4 Yrs ago||87.19||2.6||31.2||3.9||35.1|
Close 5 years ago EUR66.47
3.3 Beta & Alpha:
+ Beta: the Beta of Bayerische Motoren Werke 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.
+ Alpha: the Alpha of the stock is 1.3. The actual return of 2.78% exceeded the expected return of 1.5%, reflecting outperformance.
3.4 The Past Quarter
+ Bayerische Motoren Werke AG (ETR:BMW), has dipped EUR1.11 (or 1.3%) in the past quarter to close at EUR84.75 today. Compared with the DAX Index which rose 450.1 points (or 3.6%) in the past quarter, this represented a relative price change of -4.9%.
SECTION 4 BAYERISCHE MOTOREN WERKE RELATED NEWS
4.1 Corporate Wires
Bayerische Motoren Werke (BMW) issued 1 new Release this week.
June 12: Over a million BMW Group vehicles delivered in first five months of 2018
1,003,573 BMW Group vehicles sold in year-to-date, +1.6% ++ Year of X: More customers buy BMW X models than ever before ++ Electrified sales grow 41.0%: 46,849 units worldwide ++ BMW i production to ramp up over 50% due to increased demand
Munich. The BMW Group has sold more vehicles than ever before in the first five months of the year: more than a million customers worldwide have already taken delivery of their new BMW, MINI or Rolls-Royce vehicle in 2018 (1,003,573 / +1.6%).
To view the previous 3 months' Releases in full, click here
4.2 Other News
+ BSS/News Bites:
Bayerische Motoren Werke AG is placed 438/812 in BSS News Bites' ranking of German performers in the past year, a percentile ranking of 46.
+ Vanguard Total World Stock ETF 7581:
The stock was one of 7581 global stocks selected by Vanguard Total World Stock ETF (VT) who bought 8,322 shares in the period Jan 31, 2018 to Apr 30, 2018 worth $US746,253 at an estimated Volume Weighted Average Price (VWAP) of $US89.6723. As at Apr 30, 2018, the Vanguard Total World Stock ETF held 101,151 shares worth $US11,001,540 or 0.07% by value of the ETF's portfolio [Ranked 269 out of 7581 by value and 10 out of 153 for Germany].
SECTION 5 BAYERISCHE MOTOREN WERKE GLOBAL RANKING
Global Rank [out of 47,576 stocks] and Rank in the Europe Region [out of 8,515 stocks]
|Description||Value||Global Rank||In Eur Region|
|Total Assets (US$)||218.1B||316||84|
|Net Profit (US$)||7.9B||102||20|
|Return on Equity %||14.8||7,938||1,673|
|Net Profit Margin %||7.3||14,761||2,360|
|Price to Book||1.3||15,674||2,414|
|PV$1000 (1Year) US$*||1,090||15,365||2,132|
|US$* Change (1Year) %||5.4||16,540||2,286|
* 1 year ago EUR 1 = USD 1.12
Jun 18, 2018: EUR 1 equals USD 1.16
SECTION 6 BAYERISCHE MOTOREN WERKE SUMMARY FINANCIALS
6.1 Dividend History
+ Trailing 12 months dividend has improved from EUR2.60 in 2014 to EUR4.0 in 2018.
6.2 Financials Summary
|Year ended||Dec 2016||Dec 2015||Dec 2014|
|Sales (USD B)||109.9||107.9||95|
|Pretax (USD B)||11.2||10.7||10.1|
|Net (USD B)||7.9||7.4||6.7|
+ Net profit was up 7.8% from US$7.4 billion in 2015 to US$7.9 billion in 2016.
+ Earnings Per Share (EPS) was up 7.7% from EUR9.70 to EUR10.45.
SECTION 7 BAYERISCHE MOTOREN WERKE PROFILE
Bayerische Motoren Werke (BMW) AG manufactures and sells luxury cars and motorcycles worldwide. The Company produces everything from convertible sports cars to luxury sedans to touring motorcycles with large displacement engines.
7.2 Top Management
The chairman is Harald Kruger.
7.3 Issued Capital
Based on 601,995,000 issued shares the market capitalisation is EUR51 billion (US$59.1 billion).
Physical Address: Petuelring 130 Munich, 80788 Germany
Country of Incorporation: Germany
Exchange: Xetra Stock Exchange
Business Sector: Automobiles & Auto Parts
Industry Group: Automobiles & Auto Parts
Industry: Auto & Truck Manufacturers
Economic Sector: Consumer Cyclicals
DE:BMW; ETR:BMW; GR:BMW; BMWG.DE
Bayerische Motoren Werke Ag, Bayerische Motoren Werke Aktiengesellschaft