Italian stock report - Luxottica Group

ITALY

Luxottica Group decreases 1.5% June 18, 2018 17:30 CEST

NEWS BITES - EUROPE

Luxottica Group (MI:LUX), Italy's largest Personal & household goods company by market cap, has decreased 86.0c (1.5%) from its last trading session of June 15 to close at EUR54.64. Compared with the FTSE MIB Index which fell 91.2 points (0.4%) in the day, the relative price change was -1.1%. The volume was 0.7 times the average daily trading volume of 534,524 shares.

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 LUXOTTICA GROUP BEARISH SIGNALS

1.1 Fundamentals:

+ The relative yield of LUX, defined by its yield of 1.9%, divided by average yield of dividend yielding stocks in the FTSE MIB Index of 2.9% is 63.4%. This suggests Luxottica Group stock is overvalued in dividend yield terms.

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 2.6. Compared with the rest of the market the stock is overvalued and ranks in the bottom 9% of stocks by value of Q Ratio.

1.2 Overvaluation [compared with sector average]:

+ Price/Earnings of 30.9 [7.2].

1.3 Technicals:

Overbought/Bearish/Resistance Signals:

+ The Stochastic indicator of 83.7 has broken through the overbought line of 80; this indicates the price is close to its 14-day high and is likely to revert to a downtrend.

1.4 Low Performance Indicators:

DescriptionLUX ValueRank In Market
EPS Growth %6In Bottom Quartile
Price Change %-1.5In Bottom Quartile
Price to Sales2.5In Bottom Quartile

SECTION 2 LUXOTTICA GROUP BULLISH SIGNALS

2.1 Fundamentals:

+ Economic Value Added defined by Net Operating Profit After Tax of EUR877.7 million less Cost of Capital of EUR277.6 million was EUR600 million. The multiple EVA/Cost of Capital was exemplary at 2.2 times.

+ Total Liabilities/EBITDA of 3.2 is comfortably below the Joseph Piotroski benchmark of 5.

+ Interest cover defined by EBIT/I is 17.2 times. This indicates it is less leveraged.

+ Net profit margin has averaged 9% in the last 3 years. This is better than the sector average of 1.4% and suggests a high margin of safety.

2.2 Undervaluation [compared with sector average]:

+ Return on Assets 8.3% [1.2%].

+ Return on Capital Employed 17.3% [14.0%].

+ Dividend yield of 1.9% [0.5%].

2.3 Technicals:

+ The 2.2% discount to 12-month high of EUR55.86 against the 22.9% premium to 12-month low of EUR44.45 suggests the stock continues to push for new highs.

+ In the last three months the stock has hit a new 52-week high six times, pointing to an uptrend.

+ The present value of EUR1,000 (PV1000) invested ten years ago in Luxottica Group is EUR4,601, including a capital gain of EUR3,106 and dividend reinvested of EUR494.

+ 10 years Multiplier in EUR = 4.601x

+ Compound Annual Growth Rate (CAGR) in EUR = 16.5%

Present Value of USD1,000 invested 10 years ago:

+ The present value of USD1,000 (PV1000) invested ten years ago in Luxottica Group is $US3,465, including a capital gain of $US2,093 and dividend reinvested of $US372.

+ 10 years ago EUR 1 equalled USD 1.5386

+ 10 years Multiplier in USD = 3.465x

+ Compound Annual Growth Rate (CAGR) in USD = 13.2%

Jun 18, 2018: EUR 1 equals USD 1.16

2.4 High Performance Indicators:

DescriptionLUX ValueRank In Market
Today's TurnoverEUR20.5 million (US$23.7 million)In Top 6%
Price/MAP501.03In Top Quartile
Price/MAP2001.1In Top Quartile
Return on Assets [ROA] %8.3In Top Quartile
Interest Cover17.2In Top Quartile
Return on Capital Employed [ROCE] %17.3In Top Quartile

SECTION 3 LUXOTTICA GROUP PRICE VOLUME DYNAMICS

3.1 Technicals:

+ Volume: there were 374,910 shares worth EUR20.5 million (US$23.7 million) traded today. In the past week, volume was 1.0 times average and the shares were up 0.6%.

+ The present value of EUR1,000 (PV1000) invested one year ago in Luxottica Group is EUR1,050, comprising a capital gain of EUR30 and dividend reinvested of EUR20.

PV10001-week1-month1-year
LUX.MI1,0061,0271,050
FTSE MIB Index1,0019871,055

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 LUX would have produced a return of 4.9%.

LUXClose (EUR)Dividends (EUR)Capital Gain / (Loss) %% YieldAnnual Return %
Jun 1854.641.0131.94.9
1 Yr ago53.060.9222.82.124.9
2 Yrs ago43.210.89(23.2)1.6(21.7)
3 Yrs ago56.31.4446.53.750.3
4 Yrs ago38.420.6510.51.912.4

Close 5 years ago EUR34.76

3.3 Beta & Alpha:

+ Beta: the Beta of Luxottica Group stock is 0.4. 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 4.31% exceeded the expected return of 3.6%, reflecting outperformance.

3.4 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 25.1% (or a turnover period of 3 years 11 months). This average length of ownership of the stock at 3.8 times the average holding period of 1 year 18 days for stocks in the FTSE MIB Index suggests a larger number of core investors, making a long-term investment safer.

3.5 The Past Quarter

+ Luxottica Group (MI:LUX), has climbed EUR4.33 (or 8.6%) in the past quarter to close at EUR54.64 today. Compared with the FTSE MIB Index which fell 758.4 points (or 3.3%) in the past quarter, this represented a relative price increase of 11.9%.

SECTION 4 LUXOTTICA GROUP RELATED NEWS

Other News

+ BSS/News Bites:

Luxottica Group is placed 123/281 in BSS News Bites' ranking of Italian performers in the past year, a percentile ranking of 57.

SECTION 5 LUXOTTICA GROUP GLOBAL RANKING

Global Rank [out of 47,576 stocks] and Rank in the Europe Region [out of 8,515 stocks]

DescriptionValueGlobal RankIn Eur Region
MCap (US$)30.7B474116
Total Assets (US$)11.9B2,488500
Revenue (US$)12.1B1,175275
Net Profit (US$)983.9M1,146233
Return on Equity %14.87,9221,667
Net Profit Margin %9.412,3071,974
Price to Book62.635,7065,512
Price/Earnings31.414,6272,836
Yield %1.813,9932,673
PV$1000 (1Year) US$*1,07915,7802,187
US$* Change (1Year) %7.015,7782,169

* 1 year ago EUR 1 = USD 1.12

Jun 18, 2018: EUR 1 equals USD 1.16

SECTION 6 LUXOTTICA GROUP SUMMARY FINANCIALS

6.1 Dividend History

+ Trailing 12 months dividend has improved from 65.0c in 2014 to EUR1.01 in 2018.

6.2 Financials Summary

Year endedDec 2016Dec 2015Dec 2014
Sales (USD B)12.111.88.9
Pretax (USD B)1.51.51.2
Net (USD M)983.9930.2743.3
EPS (EUR)1.771.671.34

+ Net profit was up 5.8% from US$930.2 million in 2015 to US$983.9 million in 2016.

+ Earnings Per Share (EPS) was up 6% from EUR1.67 to EUR1.77.

SECTION 7 LUXOTTICA GROUP PROFILE

7.1 Activities

Luxottica Group is a leader in eyewear having a brand portfolio that includes Ray-Ban, Bvlgari, Burberry, Chanel, Dolce & Gabbana, Donna Karan, Polo Ralph Lauren, Prada, Versace, Vogue, Persol, Arnette and REVO.

7.2 Top Management

The chairman is Leonardo Del Vecchio and the chief executive officer is Francesco Milleri.

7.3 Issued Capital

Based on 484,940,000 issued shares the market capitalisation is EUR26.5 billion (US$30.7 billion).

COMPANY IDENTIFIERS

Contact: +39 02 86334.1

Physical Address: Via Cantu, 2 Milano 20123 MI Italy

State/Province/Country: Italy

Exchange: Borsa Italiana

Business Sector: Personal & Household Products & Services

Economic Sector: Consumer Non-Cyclicals

ISIN: IT0001479374

MI:LUX; BIT:LUX; IM:LUX; LUX.MI

PermID: 4295875513

RIC: LUX.MI

Source: www.BuySellSignals.com