Italian stock report - Luxottica Group

ITALY

Luxottica Group drops on high volatility July 26, 2017 17:30 CEST

NEWS BITES - EUROPE

Luxottica Group (MI:LUX), Italy's largest Personal & household goods company by market cap, traded between an intraday low of EUR52.10 and a high of EUR53.20, suggesting a trading opportunity between peaks and troughs. The average daily volatility of 2.1% places the stock in the 4th quartile in the market, meaning it is the least volatile. Today its volatility (highest price minus lowest price/lowest price) of 2.1% equalled the average daily volatility, up from 1.9% on Tuesday and 1.1% on Monday. The stock price has decreased 50.0c (1.0%) from its last trading session of July 25 to close at EUR52.10. Compared with the FTSE MIB Index which rose 120.1 points (0.6%) in the day, the relative price change was -1.5%. The volume was 0.8 times the average daily trading volume of 676,238 shares.

SECTION 1

LUXOTTICA GROUP BEARISH SIGNALS

1.1 Fundamentals:

+ The relative yield of the stock, defined by its yield of 1.8%, divided by average yield of dividend yielding stocks in the FTSE MIB Index of 2.2% is 80.8%. This suggests the stock is overvalued in dividend yield terms.

1.2 Technicals:

+ The price decreased 0.1% in the last week and dropped 3.1% in the last month.

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 51.89 minus the 26-day EMA of 52.09 is negative 0.2 suggesting a bearish signal.

+ Falls to Rises: in the past month the number of falls outnumbered rises 14:9 or 1.6:1.

1.3 Low Performance Indicators:

DescriptionValueRank In Market
% Prem to Vol Wtd Price0.8In Bottom Quartile
Price Change %-1.0In Bottom Quartile

SECTION 2

LUXOTTICA GROUP BULLISH SIGNALS

2.1 Technicals:

+ The present value of EUR1,000 (PV1000) invested one year ago in Luxottica Group is EUR1,244, comprising a capital gain of EUR223 and dividend reinvested of EUR21.

PV10001-week1-month1-year
LUX.MI9999691,244
FTSE MIB Index1,0071,0301,292

+ The present value of EUR1,000 (PV1000) invested ten years ago in Luxottica Group is EUR2,553, including a capital gain of EUR1,281 and dividend reinvested of EUR272.

+ 10 years Multiplier in EUR = 2.553x

+ Compound Annual Growth Rate (CAGR) in EUR = 9.8%

Present Value of USD1,000 invested 10 years ago:

+ The present value of USD1,000 (PV1000) invested ten years ago in Luxottica Group is $US2,167, including a capital gain of $US936 and dividend reinvested of $US231.

+ 10 years ago EUR 1 equalled USD 1.37

+ 10 years Multiplier in USD = 2.167x

+ Compound Annual Growth Rate (CAGR) in USD = 8.0%

Jul 26, 2017: EUR 1 equals USD 1.16

2.2 High Performance Indicator:

DescriptionValueRank In Market
Today's TurnoverEUR28.6 million (US$33.2 million)In Top 5%

SECTION 3

PRICE VOLUME DYNAMICS

3.1 Technicals:

+ Volume: there were 548,730 shares worth EUR28.6 million (US$33.2 million) traded today. In the past week, volume was 0.7 times average and the shares were down 0.1%.

+ Luxottica Group is at a discount of 6.9% to its 12-month high of EUR55.94 on January 16. It is also at a premium of 32.8% to the 12-month low of EUR39.24 on October 07, 2016.

3.2 Moving Annual Return

LUXClose (EUR)Dividends (EUR)Capital Gain / (Loss) %% YieldAnnual Return %
July 2652.10.9222.32.224.5
1 Yr ago42.590.89(32.6)1.4(31.1)
2 Yrs ago63.151.4458.83.662.4
3 Yrs ago39.760.657.41.89.2
4 Yrs ago37.010.5849.92.352.2

3.3 Beta & Alpha:

+ Beta: the Beta of Luxottica Group stock is 0.2. 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 8.8. The actual return of 16.57% exceeded the expected return of 7.7%, reflecting outperformance.

3.4 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 33.96% (or a turnover period of 2 years 11 months). This average length of ownership of the stock at 3.2 times the average holding period of 10 months for stocks in the FTSE MIB Index suggests a larger number of core investors, making a long-term investment safer.

3.5 Month-on-Month Comparison (Trailing Month - ended 25th)

25 Jul23 Jun25 May25 Apr24 Mar24 Feb
Price 25 Jul (EUR)52.654.1554.1552.450.8248.52
% Price Change-2.10.83.33.74.7-1.5
Avg Daily Volume685,342752,808790,004968,0751,001,1151,044,186
VWP (EUR)53.3253.2651.7950.2750.4850.48
Price Range (EUR)50.65 - 54.352.7 - 55.651.07 - 54.2252.05 - 52.6950.19 - 50.8248.17 - 48.96
Relative Price Change %-5.13.610.6-3.83.1
Volatility %7.25.56.26.36.45.7

SECTION 4

PEER GROUP ANALYSIS & RANKING

4.1 Global Peer Group Analysis (all figures in USD)

NameRelative Str. (6 mo)MCapPV $1000 (1 yr)RevenueNet ProfitTotal Assets
L'Oreal67117.5B1,089.930.6B3.6B41.6B
Luxottica Group6629.4B1,318.912.2B994M12B
Amorepacific3814.4B687.94.9B554.2M4.5B
LG Household & Health Care5813.4B896.95.3B492.6M3.9B
Burberry Group179.6B1,345.63.6B374M3.1B
AMOREPACIFIC389.2B818.35.8B288.6M6.1B
DeLonghi824.9B1,428.92.2B170.1M1.9B
Jumbo692.3B1,527.8594.7M111.1M1.1B
Tod's382.2B1,285.81.2B100.8M1.9B

Global Peer Group Analysis (continued)

CodeCountryLast PriceP/EP/SP/BookTurnover Rate (%)% Disc to 52-w Hi
ORFREUR180.8032.93.98.125.47.1
LUXITEUR52.6034.07.4
A090430KRKRW283,500.032.62.94.574.431.6
A051900KRKRW993,000.025.92.513.955.420.8
BRBYGBGBX1,698.026.22.74.9107.19.6
A002790KRKRW129,000.028.71.66.842.626.3
DLGITEUR28.3014.49.2
BELAGREUR14.4830.69.1
TODITEUR56.9571.821.4

4.2 Global Rank [out of 47,597 stocks] and Rank in the Europe Region [out of 8,356 stocks]

DescriptionValueGlobal RankIn Eur Region
MCap (US$)29.4B465128
Total Assets (US$)12B2,344479
Revenue (US$)12.2B1,086267
Net Profit (US$)994M965207
Return on Equity %14.87,4271,476
Net Profit Margin %9.411,5671,891
Price to Book65.731,0875,394
Price/Earnings30.414,5603,000
Yield %1.812,6162,374
PV$1000 (1Year) US$*1,31913,5702,909
US$* Change (1Year) %21.914,5413,054

* 1 year ago EUR 1 = USD 1.1

Jul 26, 2017: EUR 1 equals USD 1.16

4.3 Rank in the FTSE MIB Index [out of 27 stocks], Rank in the Total Italian Market [out of 281 stocks] and Rank in the Personal & household goods sector [out of 22 stocks]

DescriptionValueIn FTSE MIB IndexIn Total Italian MarketIn Personal & household goods sector
MCap (EUR)25.3B671
Total Assets (EUR)10.3B19362
Revenue (EUR)10.4B10182
Net Profit (EUR)850.5M792
Return on Equity %14.88427
Net Profit Margin %9.411413
Price/Earnings30.415605
Yield %1.8161139
PV1000 (1Year)1,2441917313

4.4 Independent Ratings

Luxottica Group is the 314th largest by revenue in the FT Global 500.

It was ranked 444 by Newsweek and Corporate Knights Capital in the World's 500 Greenest Companies 2016.

It is the 943rd largest by revenue in the Forbes Global 2000.

It is placed 180/276 in BSS News Bites' ranking of Italian performers in the past year, a percentile ranking of 35.

SECTION 5

LUXOTTICA GROUP FINANCIALS

5.1 Annual Report for the year ended December 31, 2016 (year-on-year comparisons with previous corresponding period)-

Favourable Changes:

+ Net profit up 5.8% from EUR804.1m ($US877.1m) to EUR850.5m ($US897.1m)

+ Total revenue up 2.2% from EUR10.2b ($US11.2b) to EUR10.4b ($US11.0b).

+ EPS up 6% from EUR1.67 ($US1.82) to EUR1.77 ($US1.87).

+ Interest cover up 32% from 13.0 to 17.2.

+ Administration expenses to Sales down from 12.3% to 10.6%.

+ Sales and marketing expenses to Sales down from 8.6% to 8.1%.

+ Fixed Assets to Total Assets up from 14.9% to 16.2%.

+ Current Debtors to Total Assets up from 8.9% to 9.1%.

+ Total Liabilities to EBITDA of 3.2 compares favourably with the Joseph Piotroski benchmark of <5. However, it has deteriorated by 5.2% from the previous year's ratio of 3.1.

+ Total Liabilities to Operating Cash Flow of 3.4 compares favourably with the Joseph Piotroski benchmark of <4. This ratio has improved by 2.5% from the previous year's ratio of 3.5.

+ Net tangible assets per share up 16.9% from EUR0.77 (US84.5c) to EUR0.9 (US94.4c).

Unfavourable Changes:

+ EBIT to total assets down from 14.3% to 13.6%.

+ Total revenue to total assets down from 1.1 to 1.0.

+ Cost of Goods Sold to Sales up from 32.1% to 34.7%.

+ Current ratio down 7.4% from 1.5 to 1.4.

+ Working capital to total assets down from 9.6% to 7.9%.

Note:

+ EBIT Margin steady at 15.4%.

+ Total non-current assets to Total Assets down from 70.7% to 70.6%.

+ Intangibles to Total Assets down from 52.2% to 51.9%.

+ Total current assets to Total Assets up from 29.3% to 29.4%.

5.2 Dividend History

Date PaidValue (EUR)Type
22 May 20170.92Cash
Tr 12 Months0.92
23 May 20160.89Cash
2015 - 20160.89
18 May 20151.44Cash
2014 - 20151.44
19 May 20140.65Cash
2013 - 20140.65
20 May 20130.58Cash
2012 - 20130.58

SECTION 6

LUXOTTICA GROUP PROFILE

6.1 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.

6.2 Industry & Sector

Classification LevelName of Sector
Business SectorPersonal & Household Products & Services
Economic SectorConsumer Non-Cyclicals

6.3 Top Management

The chairman is Leonardo Del Vecchio and the chief executive officer is Massimo Vian.

6.4 Issued Capital

Based on 484,940,000 issued shares the market capitalisation is EUR25.3 billion (US$29.4 billion).

SECTION 7

STOCK BUZZ

Corporate Wire

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May 15: Luxottica Group announces dividend

Luxottica Group today announced a cash dividend of 92.0c per share. The ex dividend date is Monday, May 22, 2017 and it is payable on Wednesday, May 24.

March 27: Luxottica Group: Excerpt of the Shareholders' Agreement between Essilor International and Delfin

Milan (Italy), March 27, 2017 - Luxottica Group S.p.A. (MTA: LUX; NYSE: LUX), in accordance with applicable regulations, discloses to the public the excerpt published today on the Italian newspaper "Corriere della Sera" and concerning the provisions amounting to a "Shareholders' Agreement" of the agreement between Essilor International and Delfin already communicated to the public on January 16, 2017.

March 24: Luxottica Group: Board of Directors Report for ordinary meeting of stockholders now publicly available

Milan, March 24, 2017 - Luxottica Group S.p.A. (NYSE: LUX; MTA: LUX), announced today that the Board of Directors Report for the Ordinary Stockholders Meeting to be convened on April 28, 2017 is available to the public at the Company's registered office, on the Company's website www.luxottica.com in the Governance/General Meeting section, and on the "eMarket Storage" platform at www.emarketstorage.com.

March 23: Luxottica Group pleased with the proposed combination of Essilor and Luxottica progressing

Milan (Italy), March 23, 2017 - Luxottica Group S.p.A. (MTA: LUX; NYSE: LUX) today received notice that the Board of Directors of Essilor International (Euronext Paris: EI) approved the signing of the contribution agreements relating to transaction between Essilor International and Delfin.

The decision follows the favorable opinions of the Essilor's employee representative bodies on the proposed combination with Luxottica announced on January 16, 2017, and the support of Valoptec, an organization that brings together most of Essilor's employee shareholders.

March 07: Luxottica Group: By-Laws February 28, 2017

Milan, Italy, March 7, 2017 - Luxottica Group S.p.A. (MTA: LUX; NYSE: LUX) announced that the Company's By-laws, which have been updated with the issued share capital as of February 28, 2017, are available on the Company's website at www.luxottica.com in the Governance/By-Laws section and on the authorized central storage mechanism eMarket Storage available at www.emarketstorage.com.

Contact: +39 02 86334.1

Physical Address: Via Cantu, 2 Milano 20123 MI Italy

State/Province/Country: Italy

Exchange: Borsa Italiana

ISIN: IT0001479374

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

PermID: 4295875513

Source: www.BuySellSignals.com