Italian stock alert

ITALY

CLOSING UPDATE: Parmalat hits 52-week low third time in one month 18 June 2018 19:15 CEST

NEWS BITES - EUROPE

This is an end of day Alert, produced after today's Italian market close. It concludes the BSS News Bites intra-day Alert series (summaries below).

Parmalat, Italy's 2nd largest food/beverage/tobacco company by market capitalisation, hit a 52-week low of EUR2.86 today for the third time in the past one month and last traded at EUR2.86. Trading volume was 1.4 times average at the end of the day. Compared with the FTSE MIB Index which fell 91.2 points (or 0.4%) in the day, this represented a relative price increase of 0.4%.

Technical indicators complementing today's significant downtrend:

+ The negative 0.02 MACD (Moving Average Convergence Divergence) indicator suggests a bearish signal.

+ In the last three months the stock has hit a new 52-week low five times, pointing to a downtrend.

+ The price dropped 2.7% in the last week and 3.1% in the last month.

Fundamental measures by comparison with the sector average [in brackets] indicate:

Overvaluation:

+ Dividend yield of 0.2% [0.6%]

+ Return on Capital Employed 2.1% [4.6%]

Other Bearish Signals include:

+ As per the Du Pont analysis, Return on Equity is less than stellar at 1.8%. Also, this has deteriorated from 2.1% last year.

Note

The stock has underperformed 59% of the Italian market over the past 6 months.

Bullish Signals:

Interest cover is less leveraged at 20 times.

Tobin's Q Ratio is 1.3. Compared with the rest of the market the stock is undervalued.

Net profit margin has averaged 6% in the last 3 years. This is better than the sector average of 4.6% and suggests a high margin of safety.

Fundamental measures by comparison with the sector average [in brackets] indicate:

Undervaluation:

Price to Book of 1.9 [5.3]

TODAY'S ALERT

Afternoon Alert: Parmalat increases 0.3%, leads Food/beverage/tobacco sector higher

18 June 2018 14:06 CEST

Parmalat (MI:PLT) has increased 0.3% to trade at EUR2.87 vs. the Food/beverage/tobacco sector which strengthened 90.2 points (or 0.2%) to 52,817.8. Representing a weighting of about 37.3% of the sector, the stock accounted for 76.8% of today's gain. Trading volume was 2.7 times average so far today.

Parmalat (MI:PLT; BIT:PLT; IM:PLT)

ISIN: IT0003826473

PermID: 4295875871

Source: www.BuySellSignals.com