UK stock report - Reed Elsevier

UK

RELX increases 1.4% after finding support January 19, 2018 16:30 GMT

NEWS BITES - EUROPE

RELX PLC (L:REL), the 2nd largest Media company by market cap in the United Kingdom, has increased 1.4% after hitting the lower Bollinger Band five times in the last ten days. This is a bullish signal. The lower Bollinger Band marks the trajectory of support on a stock price. The stock price has increased GBX23.0 (1.4%) from its last trading session of January 18 to close at GBX1,646.50. Compared with the FTSE 100 Index which rose 29.8 points (0.4%) in the day, the relative price increase was 1.0%. The rise has been propped up by robust volume of 1.6 times the average daily volume of 2.9 million shares.

Highlights in today's Report:

SECTION 1 BULLISH SIGNALS

Fundamentals, Undervaluation [compared with sector average], Technicals, Oversold/Bullish/Support Signals, High Performance Indicators, A positive finish to 2017

SECTION 2 BEARISH SIGNALS

Fundamentals, Overvaluation [compared with sector average], Low Performance Indicator

SECTION 3 PRICE VOLUME DYNAMICS

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

SECTION 4 RANKING

Global, Independent Ratings

SECTION 5 FINANCIALS

Financials Summary, 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 RELX BULLISH SIGNALS

1.1 Fundamentals:

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 1.8. Compared with the rest of the market the stock is undervalued.

+ Economic Value Added defined by Net Operating Profit After Tax of $US1.4 billion less Cost of Capital of $US180.6 million was $US1.2 billion. The multiple EVA/Cost of Capital was exemplary at 6.9 times.

+ Interest cover defined by EBIT/I is 8.3 times. This indicates it is less leveraged.

+ Net profit margin has averaged 16.9% in the last 3 years. This is considered superior and suggests a high margin of safety.

1.2 Undervaluation [compared with sector average]:

+ Return on Assets 8.8% [2.1%].

+ Return on Capital Employed 20.9% [5.5%].

1.3 Technicals:

+ In the last three months the stock has hit a new 52-week high seven times, pointing to a significant uptrend.

+ The present value of GBP1,000 (PV1000) invested one year ago in RELX is GBP1,175, comprising a capital gain of GBP167 and dividend reinvested of GBP8.

PV10001-week1-month1-year
REL.L9929561,175
FTSE 100 Index9941,0141,072

+ The present value of GBP1,000 (PV1000) invested twenty years ago in RELX is GBP4,109, including a capital gain of GBP2,577 and dividend reinvested of GBP532.

+ 20 years Multiplier in GBP = 4.109x

+ Compound Annual Growth Rate (CAGR) in GBP = 7.3%

Jan 19, 2018: GBP 1 equals USD 1.39

1.4 Oversold/Bullish/Support Signals:

+ The Relative Strength Index (RSI) of 22.4 has breached the oversold line of 30, suggesting the price decrease of 4% in the last 14 days is unusually high.

+ The Money Flow Index [MFI] is 15.8 suggesting an oversold 14-day trend, being under 20. The Money Ratio of 0.2 suggests positive money flow was 0.2 times negative money flow.

+ The Stochastic indicator of 6.2 has pierced the oversold line of 20; this indicates the price is close to its 14-day low and is likely to revert to an uptrend.

1.5 High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverGBP76.5 million (US$106.4 million)In Top 3%
Price Change %1.4In Top Quartile
Return on Capital Employed [ROCE] %20.9In Top Quartile

1.6 A positive finish to 2017

The stock has soared GBX1,165.15 (or 204.5%) over the past five years, outperforming the FTSE 100 Index by 16.5% in FY2015, 9.9% in FY2016 and 13.7% in FY2017 to close at GBX1,735.0.

SECTION 2 RELX BEARISH SIGNALS

2.1 Fundamentals:

+ The relative yield of the stock, defined by its yield of 0.7%, divided by average yield of dividend yielding stocks in the FTSE 100 Index of 2.8% is 25.4%. This suggests the stock is overvalued in dividend yield terms.

+ Total Liabilities/EBITDA of 6.5 which compares unfavourably with the Joseph Piotroski benchmark of 5.

2.2 Overvaluation [compared with sector average]:

+ Price/Sales of 3.5 [2.1].

+ Dividend yield of 0.7% [2.2%].

2.3 Low Performance Indicator:

DescriptionValueRank In Market
Total Debt to Equity2.1In Bottom 6%

SECTION 3 PRICE VOLUME DYNAMICS

3.1 Volatility:

+ RELX is at a discount of 7.7% to its 12-month high of GBX1,784.0 on November 28, 2017. It is also at a premium of 18.7% to the 12-month low of GBX1,387.13 on January 27, 2017.

3.2 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has consistently exceeded 8%.

RELClose (GBX)Dividends (GBX)Capital Gain %% YieldAnnual Return %
Jan 191,646.511.716.70.817.5
1 Yr ago1,410.9632.5527.52.930.4
2 Yrs ago1,107.0626.46.42.58.9
3 Yrs ago1,040.8924.9522.42.925.4
4 Yrs ago850.126.2838.64.342.9

Close 5 years ago GBX613.35

3.3 Beta & Alpha:

+ Beta: the Beta of RELX stock is 0.6. 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 9.9. The actual return of 14.36% exceeded the expected return of 4.4%, reflecting outperformance.

3.4 Aggregate Volumes, Prices and Turnover Period:

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

+ London: REL.L 4,644,579 [VI of 1.6] volume 73.43% of aggregate. Price: GBX1,646.50.

+ Amsterdam: REN.AE 1,680,000 [VI of 0.8] volume 26.56% of aggregate. Price: EUR18.44. Using the current exchange rate of EUR1 equals 88.1518GBX, The shares are at a 1.3% discount to the close price on London.

+ Aggregate volume: there were 6.3 million shares of RELX worth GBP103.8 million traded today. The aggregate volume was 1.3 times average trading of 5 million shares.

The turnover rate in the 12 months to date was 65.7% (or a turnover period of 1 year 6 months). This average length of ownership of the stock at 76.0 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$)24.4B652162
Total Assets (US$)13.3B2,265474
Revenue (US$)6.9B1,785416
Net Profit (US$)1.2B903197
Return on Equity %50.7614135
Net Profit Margin %17.06,8791,211
Price/Earnings40.216,3953,190
Yield %0.718,2143,330
PV$1000 (1Year) US$*1,32014,3053,186
US$* Change (1Year) %27.914,5723,193

* 1 year ago GBP 1 = USD 1.23

Jan 19, 2018: GBP 1 equals USD 1.39

4.2 Independent Ratings

+ FT 500:

RELX PLC is the 316th largest by revenue in the FT Global 500.

+ Forbes 2000:

It is the 989th largest by revenue in the Forbes Global 2000.

+ BSS/News Bites:

It is placed 565/1306 in BSS News Bites' ranking of United Kingdom performers in the past year, a percentile ranking of 57.

+ 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 297,327 shares worth $US6,967,036 or 0.05% by value of the ETF's portfolio [Ranked 371 out of 7457 by value and 24 out of 303 for United Kingdom].

SECTION 5 RELX FINANCIALS

5.1 Financials Summary

Year endedDec 2016Dec 2015Dec 2014
Sales (USD B)6.969
Pretax (USD)1.5B1.3B767.7M
Net (USD)1.2B1B763M
EPS (USD)0.5580.4890.6696

Net profit was up 15.2% from US$1 billion in 2015 to US$1.2 billion in 2016. Earnings Per Share (EPS) was up 14.1% from 48.90c to 55.80c.

5.2 Trailing 12 Months Dividends

Trailing 12 Months ToValue (GBX)
19 Jan 201811.7
19 Jan 201732.55
19 Jan 201626.4
19 Jan 201524.95
19 Jan 201426.28

SECTION 6 RELX PROFILE

6.1 Activities

RELX PLC provides information solutions for professional customers across industries. The Company publishes information for the scientific, medical, legal, and business sectors.

6.2 Industry & Sector

Classification LevelName of Sector
Economic SectorConsumer Cyclicals
Business SectorCyclical Consumer Services
Industry GroupMedia & Publishing

6.3 Top Management

The chairman is Anthony Habgood, the chief executive officer is Erik Engstrom and the chief financial officer is Nick Luff.

6.4 Issued Capital

Based on 1,066,947,534 issued shares the market capitalisation is GBP17.6 billion (US$24.4 billion).

SECTION 7 REPORTED BUYING AND SELLING

Insider Buying

November 10: RELX director buys

RELX (L:REL) director Susan Elizabeth MacLeod bought 3,700 shares worth GBP63,825 ($US84,664) on November 10. The purchase price was GBP17.25. The shares hit an eight-day low on the day.

SECTION 8 STOCK BUZZ

Corporate Wire

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January 17: RELX: Transaction in Own Shares

RELX PLC announces that today it purchased through J.P. Morgan Securities plc 107,200 RELX PLC ordinary shares of 14 51/116 pence each on the London Stock Exchange at a price of 1646.2228 pence per share. The purchased shares will be held as treasury shares. Following the above purchase, RELX PLC holds 61,335,386 ordinary shares in treasury, and has 1,062,394,805 ordinary shares in issue (excluding treasury shares).

January 15: RELX: Transaction in Own Shares

RELX PLC announces that today it purchased through J.P. Morgan Securities plc 106,700 RELX PLC ordinary shares of 14 51/116 pence each on the London Stock Exchange at a price of 1651.2856 pence per share. The purchased shares will be held as treasury shares. Following the above purchase, RELX PLC holds 61,120,586 ordinary shares in treasury, and has 1,062,604,604 ordinary shares in issue (excluding treasury shares).

January 12: RELX: Transaction in Own Shares

RELX PLC announces that today it purchased through J.P. Morgan Securities plc 106,600 RELX PLC ordinary shares of 14 51/116 pence each on the London Stock Exchange at a price of 1662.9976 pence per share. The purchased shares will be held as treasury shares. Following the above purchase, RELX PLC holds 61,013,886 ordinary shares in treasury, and has 1,062,711,304 ordinary shares in issue (excluding treasury shares).

January 10: RELX: Transaction in Own Shares

RELX PLC announces that today it purchased through J.P. Morgan Securities plc 104,100 RELX PLC ordinary shares of 14 51/116 pence each on the London Stock Exchange at a price of 1690.2087 pence per share. The purchased shares will be held as treasury shares. Following the above purchase, RELX PLC holds 60,801,886 ordinary shares in treasury, and has 1,062,918,614 ordinary shares in issue (excluding treasury shares).

January 08: RELX: Transaction in Own Shares

RELX PLC announces that today it purchased through J.P. Morgan Securities plc 103,000 RELX PLC ordinary shares of 14 51/116 pence each on the London Stock Exchange at a price of 1705.2542 pence per share. The purchased shares will be held as treasury shares. Following the above purchase, RELX PLC holds 60,593,986 ordinary shares in treasury, and has 1,063,118,004 ordinary shares in issue (excluding treasury shares).

Contact: 44-20-79307077

Physical Address: Grand Buildings, 1-3 Strand, London, WC2N 5JR, United Kingdom

State/Province/Country: United Kingdom

Country of Incorporation: United Kingdom

Exchange: London Stock Exchange

ISIN: GB00B2B0DG97

L:REL; LON:REL; LN:REL; REL.L

PermID: 4295894769

Relx Plc

Source: www.BuySellSignals.com