UK stock alert

UK

CLOSING UPDATE: Reckitt Benckiser decreases further 0.5% on strong volume 18 October 2017 19:05 BST

NEWS BITES - EUROPE

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

Reckitt Benckiser, the largest household goods & home construction company by market capitalisation in the United Kingdom, traded on heavy volume of 2.7 times average today while the price dropped GBX178.0 (or 2.5%) to trade at GBX6,857.0. Compared with the FTSE 100 Index which rose 26.7 points (or 0.4%) in the day, this represented a relative price change of -2.9%.

Technical indicators complementing today's significant downtrend:

+ The negative 3.0 MACD (Moving Average Convergence Divergence) indicator suggests a bearish signal.

+ The stock has underperformed 70% of the United Kingdom market over the past 6 months.

+ The price dropped 2.6% in the last week.

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

Overvaluation:

+ Price/Earnings of 26.4 [16.8]

+ Price/Sales of 4.9 [2.1]

+ Dividend yield of 2.4% [3.0%]

+ Year-on-Year Earnings Growth of 6.6% [19.4%]

Other Bearish Signals include:

+ Tobin's Q Ratio is 2.7. Compared with the rest of the market the stock is overvalued and ranks in the bottom quartile of stocks by value of Q Ratio.

Note

Reckitt Benckiser today is at a discount of 14.7% to the 12-month high of GBX8,037.50 on 06 Jun, 2017. It is at a premium of 7.9% to the 12-month low of GBX6,355.95 on 13 Dec, 2016.

Bullish Signals:

Interest cover is less leveraged at 42.3 times.

Total Liabilities/EBITDA of 3.9 is comfortably below the Joseph Piotroski benchmark of <5.

Net profit margin has averaged 19% in the last 3 years. This is considered superior and suggests a high margin of safety.

As per the Du Pont analysis, Return on Equity is high at 21.9%.

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

Undervaluation:

Price/Earnings/Growth of 0.34 [0.9]

TODAY'S ALERT

Afternoon Alert: Reckitt Benckiser drops 2.1% on high volume

18 October 2017 15:42 BST

Reckitt Benckiser Group PLC (L:RB.) traded on heavy volume of 2.3 times average so far today while the price dropped GBX146.0 (or 2.1%) to trade at GBX6,889.0.

Reckitt Benckiser Group PLC (L:RB.; LON:RB.; LN:RB.)

ISIN: GB00B24CGK77

PermID: 4295894756

Source: www.BuySellSignals.com