UK stock report - Barclays

UK

Barclays in its biggest weekly gain in 2 months January 19, 2018 16:30 GMT

NEWS BITES - EUROPE

Barclays PLC (L:BARC), the 4th largest Bank by market cap in the United Kingdom, has increased GBX1.20 (0.6%) from its last trading session of January 18 to close at GBX200.50. Compared with the FTSE 100 Index which rose 29.8 points (0.4%) in the day, the relative price increase was 0.2%. The rise has been propped up by average volume of 1.1 times the average daily volume of 44.3 million shares. In the past week the shares have lifted 3.1%, the biggest weekly gain since December 14, 2017.

Highlights in today's Report:

SECTION 1 BULLISH SIGNALS

Fundamentals, Undervaluation [compared with sector average], Technicals, High Performance Indicators

SECTION 2 BEARISH SIGNALS

Fundamentals, Overvaluation [compared with sector average], Technicals, Low Performance Indicators, A negative finish to 2017

SECTION 3 PRICE VOLUME DYNAMICS

Volatility, Moving Annual Return, Beta, Aggregate Volumes, Prices and Turnover Period

SECTION 4 RANKING

Global, Independent Ratings

SECTION 5 FINANCIALS

Financials Summary, Annual Report for the year ended December 31, 2016 (year-on-year comparisons with previous corresponding period)-, Trailing 12 Months Dividends

SECTION 6 PROFILE

Activities, Industry & Sector, Top Management, Issued Capital

SECTION 7 REPORTED BUYING AND SELLING

SECTION 8 STOCK BUZZ

SECTION 1 BARCLAYS BULLISH SIGNALS

1.1 Fundamentals:

+ The P/E of 19.5 multiplied by the P/NTA of 0.6 is 11.7. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.

+ Over the last 3 years average annual compound growth rate of earnings per share was 16.3%. This is considered moderate.

1.2 Undervaluation [compared with sector average]:

+ Price to Book of 0.6 [1.1].

1.3 Technicals:

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 199.49 minus the 26-day EMA of 198.31 is positive 1.18 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.

+ Rises to Falls: in the past month the number of rises outnumbered falls 11:7 or 1.6:1.

1.4 High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverGBP96 million (US$133.6 million)In Top 2%
Price Change %0.6In Top Quartile

SECTION 2 BARCLAYS BEARISH SIGNALS

2.1 Fundamentals:

+ The relative yield of the stock, defined by its yield of 1.5%, divided by average yield of dividend yielding stocks in the FTSE 100 Index of 2.8% is 53.8%. This suggests the stock is overvalued in dividend yield terms.

+ Total Liabilities/EBITDA of 353.5 which compares unfavourably with the Joseph Piotroski benchmark of 5.

+ Net profit margin has averaged 6.7% in the last 3 years. This is lower than the sector average of 19.6% and suggests a low margin of safety.

+ As per the Du Pont analysis, Return on Equity is less than stellar at 4.0%. This is computed as net profit margin of 15.4% times asset turnover [sales/assets] of 0.01 times leverage factor [total assets/shareholders' equity] of 18.7.

2.2 Overvaluation [compared with sector average]:

+ Return on Equity 4.0% [4.5%].

+ Return on Assets 0.2% [0.4%].

+ Dividend yield of 1.5% [1.8%].

2.3 Technicals:

+ The price decreased 1.8% in the last month. The fall has been exacerbated by firm volume of 1.2 times average for the month.

+ In the last three months the stock has hit a new 52-week low twice.

+ The present value of GBP1,000 (PV1000) invested one year ago in Barclays is GBP902, comprising a capital loss of GBP110 and dividend reinvested of GBP12.

PV10001-week1-month1-year
BARC.L1,031982902
FTSE 100 Index9941,0141,072

+ The present value of GBP1,000 (PV1000) invested five years ago in Barclays is GBP924, including a capital loss of GBP180 and dividend reinvested of GBP104.

+ 5 years Multiplier in GBP = 0.924x

+ Compound Annual Growth Rate (CAGR) in GBP = -1.6%

Present Value of USD1,000 invested 5 years ago:

+ The present value of USD1,000 (PV1000) invested five years ago in Barclays is $US803, including a capital loss of $US287 and dividend reinvested of $US90.

+ 5 years ago GBP 1 equalled USD 1.6

+ 5 years Multiplier in USD = 0.803x

+ Compound Annual Growth Rate (CAGR) in USD = -4.3%

Jan 19, 2018: GBP 1 equals USD 1.39

2.4 Low Performance Indicators:

DescriptionValueRank In Market
Return on Assets [ROA] %0.2In Bottom 1%
% Prem to Vol Wtd Price0.3In Bottom Quartile
Total Debt to Equity1.5In Bottom Quartile

2.5 A negative finish to 2017

The stock has sunk GBX18.35 (or 8.3%) in FY 2017 to close at GBX203.40. This makes the stock the biggest decliner in the Bank sector which is up 45.6% in FY 2017. The average daily volume of 43.1 million shares in FY 2017 was 0.8 times the average daily volume in FY 2016.

SECTION 3 PRICE VOLUME DYNAMICS

3.1 Volatility:

+ Barclays is at a discount of 16.9% to its 12-month high of GBX241.14 on February 23, 2017. It is also at a premium of 13.1% to the 12-month low of GBX177.30 on November 20, 2017.

3.2 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 2 out of 5 years.

BARCClose (GBX)Dividends (GBX)Capital Gain / (Loss) %% YieldAnnual Return %
Jan 19200.53(11.0)1.3(9.7)
1 Yr ago225.264.5252.527.5
2 Yrs ago180.196.5(14.2)3.1(11.1)
3 Yrs ago210.055.5(20.5)2.1(18.4)
4 Yrs ago264.276.768.12.810.9

Close 5 years ago GBX244.44

3.3 Beta:

+ Beta: the Beta of Barclays stock is 0.7. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.

3.4 Aggregate Volumes, Prices and Turnover Period:

[Volume Index or VI in brackets; 1 is average]

+ London: BARC.L 47,896,486 [VI of 1.1] volume 99.89% of aggregate. Price: GBX200.50.

+ Xetra: BCY.ETR 29,142 [VI of 0.4] volume 0.06% of aggregate. Price: EUR2.27. Using the current exchange rate of EUR1 equals 88.1518GBX, The shares are at a 0.4% discount to the close price on London.

+ Aggregate volume: there were 47.9 million shares of Barclays worth GBP96.1 million traded today. The aggregate volume was 1.1 times average trading of 44.4 million shares.

The turnover rate in the 12 months to date was 67.5% (or a turnover period of 1 year 5 months). This average length of ownership of the stock at 74.0 times the average holding period of 7 days for stocks in the FTSE 100 Index suggests a larger number of core investors, making a long-term investment safer.

SECTION 4 RANKING

4.1 Global Rank [out of 47,420 stocks] and Rank in the Europe Region [out of 8,522 stocks]

DescriptionValueGlobal RankIn Eur Region
MCap (US$)47.6B30382
Total Assets (US$)1,675.8B317
Revenue (US$)20.1B721188
Net Profit (US$)2.9B34780
Return on Equity %4.022,8463,896
Net Profit Margin %15.47,6211,299
Price to Book0.64,788901
Price/Earnings19.410,5442,092
Yield %1.513,9522,750
PV$1000 (1Year) US$*1,01325,5015,017
US$* Change (1Year) %-1.026,4975,115

* 1 year ago GBP 1 = USD 1.23

Jan 19, 2018: GBP 1 equals USD 1.39

4.2 Independent Ratings

+ S&P Global Market Intelligence 100:

Barclays PLC was ranked 15 in SNL's list of Top 100 Banks by Total Assets in 2016; a deterioration over a year from rank 10 in 2015.

+ FT 500:

It is the 488th largest by profit in the FT Global 500.

+ Fortune 500:

It was ranked 284 by total revenues in the Fortune 500 annual list for 2017; a deterioration over a year from rank 181 in 2016.

+ Brand Finance 500:

It was ranked 13 in the Brand Finance list of the world's 500 Valuable Banking brands by brand value in 2015; unchanged over a year from the same rank 13 in 2014. Brand Finance valued the brand at US$14,179 million and ranked it Number 13 in Europe. Most of the brand valuation was for services such as credit cards.

+ Forbes 2000:

It is the 166th largest by revenue in the Forbes Global 2000.

+ BSS/News Bites:

It is placed 966/1306 in BSS News Bites' ranking of United Kingdom performers in the past year, a percentile ranking of 26.

+ Vanguard Total World Stock ETF 7457:

The stock was one of 7457 global stocks selected by Vanguard Total World Stock ETF (VT). As at November 30, 2017, the Vanguard Total World Stock ETF held 4,640,913 shares worth $US11,570,526 or 0.09% by value of the ETF's portfolio [Ranked 217 out of 7457 by value and 16 out of 303 for United Kingdom].

SECTION 5 BARCLAYS FINANCIALS

5.1 Financials Summary

Year endedDec 2016Dec 2015Dec 2014
Sales (USD B)19.718.944.4
Pretax (USD B)4.41.63.1
Net (USD)2.8B(66.4M)(235.8M)
EPS (GBP)0.103(0.019)(0.01)

There was a turnaround in Net profit from a loss of US$66.4 million in 2015 to net profit of US$2.8 billion in 2016. Earnings Per Share (EPS) improved from a loss of 1.90 GBX to 10.30 GBX.

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

Unfavourable Changes:

+ Retained earnings to total assets down 9% to 2.5%.

5.3 Trailing 12 Months Dividends

Trailing 12 Months ToValue (GBX)
19 Jan 20183
19 Jan 20174.5
19 Jan 20166.5
19 Jan 20155.5
19 Jan 20146.76

SECTION 6 BARCLAYS PROFILE

6.1 Activities

Barclays PLC provides various financial products and services in Europe, the United States, Africa, and Asia. It offers retail and commercial banking, credit cards, investment banking, wealth management, and investment management services. The companys products include current account and savings products, Woolwich branded mortgages, unsecured loans, protection products, general insurance, credit cards, Sharia-compliant products, installment finance and commercial property finance, commercial loans, and personal loans. It also offers money transmission, international and private banking, investment management, fiduciary, and brokerage services, as well as payment solutions and mobile banking services. In addition, the company provides fixed income, currency and commodities, foreign exchange, emerging markets, money markets, and credit services; equities, which include cash and equity derivatives and prime services; investment banking products and services that comprise financial advisory, and equity and debt underwriting; and advisory services. It serves individual, commercial, corporate, institutional, retail, and mass affluent customers. The company was formerly known as Barclays Bank Limited and changed its name to Barclays PLC in January 1985. Barclays PLC was founded in 1896 and is headquartered in London, the United Kingdom.

6.2 Industry & Sector

Classification LevelName of Sector
Business SectorBanking & Investment Services
Industry GroupBanking Services
IndustryBanks
Economic SectorFinancials

6.3 Top Management

The chairman is John Mcfarlane and the chief executive officer is Jes Staley.

6.4 Issued Capital

Based on 17,060,397,944 issued shares the market capitalisation is GBP34.2 billion (US$47.6 billion).

SECTION 7 REPORTED BUYING AND SELLING

Insider Buying and Selling

Reported Buying:

October 27: Barclays director buys

Barclays (L:BARC) director Ian Cheshire bought 30,000 shares worth GBP55,020 ($US72,121) on October 27. The purchase price was GBP1.83.

September 13: Barclays director buys

Barclays (L:BARC) director Laura Lester bought 10,000 shares worth GBP19,227 ($US25,416) on September 13. The purchase price was GBP1.92. The shares hit a 12-day high on the day.

Reported Selling:

December 22: Barclays director sells

Barclays (L:BARC) director Bob Hoyt sold 25,000 shares worth GBP51,113 ($US68,322) on December 21. The selling price was GBP2.04. The shares hit a six-day low on the day.

SECTION 8 STOCK BUZZ

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January 16: Barclays: Block listing Interim Review

Name of applicant:

BARCLAYS PLC

Period of return:

From 1 July 2017 - 31 December 2017

January 15: Barclays: Publication of Drawdown Prospectus

The following drawdown prospectus (the "Drawdown Prospectus") is available for viewing:

Drawdown Prospectus in relation to Barclays PLC's issue of GBP 250,000,000 3.125 per cent. Notes due 2024 (to be consolidated and form a single series with the Pound600,000,000 3.125 per cent. Notes due 2024 issued on 17 January 2017 and the Pound350,000,000 3.125 per cent.

January 02: Barclays: Total Voting Rights

In accordance with the Financial Conduct Authority's (FCA) Disclosure Guidance and Transparency Rule 5.6.1R, Barclays PLC notifies the market that as of 31 December 2017, Barclays PLC's issued share capital consists of 17,060,397,944 Ordinary shares with voting rights.

There are no ordinary shares held in Treasury.

December 27 2017: Barclays: Statement re US Tax Reform

Barclays notes the Tax Cuts and Jobs Act ("the Act") enacted on 22 December 2017, reducing the statutory rate of US federal corporate income tax to 21%.

Barclays expects the measurement of its US deferred tax assets ("DTAs") to reduce by c. Pound1bn as a result of the reduced tax rate and net of a c. Pound0.3bn increase to US DTAs, unrelated to the Act, due to a revaluation of Barclays Bank PLC's US branch DTAs.

December 01 2017: Barclays: Reduction of shareholding in BAGL

Following the transfer on 30 November 2017, subject to settlement, of a 7.0% stake in Barclays Africa Group Limited (BAGL), Barclays' total shareholding in BAGL for regulatory reporting purposes will reduce from 21.9% to 14.9%, in line with previously announced expectations. Settlement of the transfer is expected to occur on 5 December 2017.

Contact: 44-20-71161000

Physical Address: 1 Churchill Place, Canary Wharf, London, E14 5HP, United Kingdom

State/Province/Country: United Kingdom

Country of Incorporation: United Kingdom

Exchange: London Stock Exchange

ISIN: GB0031348658

L:BARC; LON:BARC; LN:BARC; BARC.L

PermID: 4297546630

Barclays Plc

Source: www.BuySellSignals.com