Spanish stock alert

SPAIN

Morning Alert: Telefonica increases 1.1%, leads Telecommunication sector higher 25 July 2017 11:39 CEST

NEWS BITES - EUROPE

Telefonica, S.A. (MA:TEF) has increased 1.1% to trade at EUR9.41 vs. the Telecommunication sector which strengthened 73.6 points (or 0.7%) to 11,208.3. Representing a weighting of about 57.7% of the sector, the stock accounted for 99.6% of today's gain. Trading volume was 88% of average so far today.

SECTION 1: The past week

Current indications of bullish signals that support the trend in the unusual trading

1.1 5-day Recap

Telefonica outperformed the IBEX35 index in 3 out of 5 days.

DayHeadlineClose price [EUR]Price change %Relative change %Comment
MondayTelefonica increases9.310.20.05
ThursdayTelefonica in 2nd consecutive rise, nears one-month high9.380.70.8Top Rise
WednesdayTelefonica increases9.320.3-0.3

Note

DayHeadlineClose price [EUR]Price change %Relative change %Comment
FridayTelefonica underperforms 83% of the market9.29-1.1-0.2Steepest Fall
TuesdayTelefonica decreases9.29-0.60.6

SECTION 2: Technical indicators

Bullish:

The present value of EUR1,000 invested one year ago is EUR1,244 [vs EUR1,232 for the IBEX 35 Index], including a capital gain of EUR169 and dividend reinvested of EUR75. The total return to shareholders for 1 year is 24.4%.

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

Parity:

Price/Earnings of 22.4 [20.4]

Price/Sales of 0.8 [0.9]

Return on Equity 13.4% [12.7%]

Return on Assets 1.9% [1.9%]

Return on Capital Employed 8.8% [8.6%]

Undervaluation:

Dividend yield of 5.7% [3.3%]

Note

The stock is at a discount of 9.7% to the 12-month high of EUR10.42 on 19 Mar, 2017. It is also at a premium of 26.2% to the 12-month low of EUR7.46 on 05 Dec, 2016.

Bearish:

The negative 0.04 MACD (Moving Average Convergence Divergence) indicator suggests a bearish signal (12-day minus 26-day Exponential Moving Averages). Both the 12-day and the 26-day EMA are falling - another bearish signal. In the past week, the stock's MACD has been negative every day, a reinforcing bearish signal.

The price decreased 1.2% in the last month.

SECTION 3: Ranking

DescriptionValueRank In Market
MCap $US billion55.2In Top 5%
52-week Range (in EUR)7.5-10.4
1-month Range (in EUR)8.9-9.6
RSI71.5Bearish

SECTION 4: Earnings

FY2016 Annual Report: Telefonica Net Profit up 285%

Telefonica (MA:TEF) reported net profit for the year-ended 31 December 2016 of EUR2.4b ($US2.5b), up 284.6% from EUR616m ($US672m) in the previous year.

Major changes compared with previous year:

Favourable Changes:

- EBIT Margin up from 9.7% to 14.8%

- Interest cover up 42.1% from 1.2 to 1.7

- EBIT to total assets up from 4.4% to 6.2%

- Sales and marketing expenses to Sales down from 49% to 44.9%

- Profit before tax to Sales up from 1.6% to 6.2%

- Current ratio up 3.7% from 0.5 to 0.6

- Fixed Assets to Total Assets up from 28.2% to 29.4%

- Total current assets to Total Assets up from 15.6% to 16.2%

Unfavourable Changes:

- Total revenue down 5.8% from EUR59.0b ($US64.4b) to EUR55.6b ($US58.6b)

- Total revenue to total assets down from 0.5 to 0.4

- Interest expenses to Sales up from 8% to 8.6%

- Interest revenue to Sales down from 3.8% to 3.4%

- Other non-current assets to Total Assets down from 8.6% to 7.9%

- Total Liabilities to Operating Cash Flow of 7.1 compares unfavourably with the Joseph Piotroski benchmark of less than 4. This ratio has deteriorated by 2.4% from the previous year's ratio of 7.0.

Note:

- Tax expenses to Sales up from 0.3% to 1.6%

- Debt to Equity steady at 0.7

- Total liabilities to Total assets steady at 0.8

- Total non-current assets to Total Assets down from 84.4% to 83.8%

- Intangibles to Total Assets down from 40.3% to 39.8%

SECTION 5: Recent News of Telefonica

June 27: Telefonica (TEF) issued new U.S. patent [9,693,326]

Telefonica (TEF) has been issued a new U.S. patent titled "Method for providing phase synchronization to non-phase synchronized cellular base stations" by the US Patent and Trademark Office. The patent number is 9,693,326 and was issued on June 27, 2017.

ABSTRACT

The method comprising at least one phase synchronized cellular base station having at least one transmit antenna for transmitting a signal to a at least one non-phase synchronized cellular base station, where it comprises transmitting by said at least one transmit antenna of said phased-synchronized cellular base station a beacon signal to said at least one non-phase synchronized cellular base station, included as part of said transmitted signal, said beacon signal comprising two orthogonal length-8 Walsh-Hadamard sequences to be broadcasted by said at least one phase synchronized cellular base station in order to provide said phase synchronization.

June 10: Telefonica announces dividend

Telefonica today announced an interim dividend of 20.0c per share. The ex dividend date is Wednesday, June 14, 2017 and it is payable on Friday, June 16.

Telefonica, S.A. (MA:TEF; MCE:TEF; MC:TEF; SM:TEF)

ISIN: ES0178430E18

PermID: 5000062703

Source: www.BuySellSignals.com