UK stock report - Reed Elsevier
RELX decreases August 17, 2018 16:30 BST
NEWS BITES - EUROPE
RELX PLC (L:REL), the 2nd largest Media company by market cap in the United Kingdom, has decreased 0.50 GBX (0.03%) from its last trading session of August 16 to close at GBX1,704.0. Compared with the FTSE 100 Index which rose 2.2 points (0.03%) in the day, the relative price change was -0.1%. The volume was 0.3 times the average daily trading volume of 3.8 million shares. Its MCap is GBP17.8 billion (US$22.7 billion).
Highlights in today's Report:
SECTION 1 BEARISH SIGNALS
SECTION 2 BULLISH SIGNALS
SECTION 3 PRICE VOLUME DYNAMICS
SECTION 4 RELATED NEWS
SECTION 5 GLOBAL RANKING
SECTION 6 SUMMARY FINANCIALS
SECTION 7 PROFILE
SECTION 1 RELX BEARISH SIGNALS
+ The stock is overbought according to the Williams % R indicator of -7.2, suggesting the price is close to its 14-day high of GBX1,709.50.
Low Performance Indicator and rank of RELX in the United Kingdom market:
|Description||REL Value||Rank In Market|
|Total Debt to Equity||2.9||In Bottom 3%|
+ The relative yield of REL, defined by its yield of 2.4%, divided by average yield of dividend yielding stocks in the FTSE 100 Index of 2.8% is 85.1%. This suggests RELX stock is overvalued in dividend yield terms.
+ Total Liabilities/EBITDA of 5.2 which compares unfavourably with the Joseph Piotroski benchmark of 5.
SECTION 2 RELX BULLISH SIGNALS
+ The 2.0% discount to 12-month high of GBX1,738.98 against the 24.9% premium to 12-month low of GBX1,363.69 suggests the stock continues to push for new highs.
+ The present value of GBP1,000 (PV1000) invested twenty years ago in RELX is GBP5,135, including a capital gain of GBP3,532 and dividend reinvested of GBP604.
+ 20 years Multiplier in GBP = 5.135x
+ Compound Annual Growth Rate (CAGR) in GBP = 8.5%
Aug 17, 2018: GBP 1 equals USD 1.27
High Performance Indicators and rank of RELX in the United Kingdom market:
|Description||REL Value||Rank In Market|
|Today's Trading Turnover||GBP19.4 million (US$24.6 million)||In Top 2%|
|Return on Capital Employed [ROCE] %||33.4||In Top 4%|
|Volatility %||0.7||In Top Quartile|
|Return on Assets [ROA] %||13.6||In Top Quartile|
|Price/MAP50||1.03||In Top Quartile|
+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 1.5. Compared with the rest of the market the stock is undervalued.
+ Economic Value Added defined by Net Operating Profit After Tax of GBP1.6 billion less Cost of Capital of GBP132.1 million was GBP1.5 billion. The multiple EVA/Cost of Capital was exemplary at 11.2 times.
+ Interest cover defined by EBIT/I is 10.3 times. This indicates it is less leveraged.
+ Net profit margin has averaged 18.9% in the last 3 years. This is considered superior and suggests a high margin of safety.
2.3 Undervaluation [compared with sector average]:
+ Return on Assets 13.6% [7.5%].
+ Return on Capital Employed 33.4% [12.8%].
SECTION 3 RELX PRICE VOLUME DYNAMICS
3.1 Present Value of GBX1000 invested in the past:
+ The present value of GBP1,000 (PV1000) invested one year ago in RELX is GBP1,058, comprising a capital gain of GBP31 and dividend reinvested of GBP27.
|FTSE 100 Index||986||986||1,023|
3.2 Aggregate Volumes and Prices:
[Volume Index or VI in brackets; 1 is average]
+ Amsterdam: REN.AE 1,810,000 [VI of 0.8] volume 61.42% of aggregate. Price: EUR19.11.
+ London: REL.L 1,136,968 [VI of 0.3] volume 38.58% of aggregate. Price: GBX1,704.0.
+ Aggregate volume: there were 2.9 million shares of RELX worth GBP50.3 million traded today. The aggregate volume was 0.5 times average trading of 6.1 million shares.
The turnover rate in the 12 months to date was 84.4% (or a turnover period of 1 year 2 months). This average length of ownership of the stock at 59.0 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.
3.3 Moving Annual Return (Past 5 years)
Based on a dynamic start date of 5 years ago, the Moving Annual Return has consistently exceeded 5%.
|REL||Close (GBX)||Dividends (GBX)||Capital Gain %||% Yield||Annual Return %|
|1 Yr ago||1,652.22||11.7||17.6||0.8||18.5|
|2 Yrs ago||1,404.39||32.55||37.5||3.2||40.7|
|3 Yrs ago||1,021.58||26.4||15.3||3||18.3|
|4 Yrs ago||885.72||24.95||23.3||3.5||26.7|
Close 5 years ago GBX718.52
3.4 Beta & Alpha:
+ Beta: the Beta of RELX stock is 0.8. 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 2.0. The actual return of 4.04% exceeded the expected return of 2.1%, reflecting outperformance.
3.5 The Past Four Years
+ RELX PLC (L:REL), extended its rise from 36.5% three years ago to 18.4% two years ago to 3.1% a year ago. In the past four years it has risen GBX818.28 (92.4%), compared with the FTSE 100 Index which rose 869.5 points (13.0%) in the four years for a relative price increase of 79.4%.
SECTION 4 RELX RELATED NEWS
4.1 Corporate Wires
RELX (REL) issued 4 new Releases this week.
August 17: RELX: Transaction in Own Shares
RELX PLC announces that today it purchased through UBS Limited 65,000 RELX PLC ordinary shares of 14 51/116 pence each on the London Stock Exchange at a price of 1705.8196 pence per share. The purchased shares will be held as treasury shares. Following the above purchase, RELX PLC holds 79,040,270 ordinary shares in treasury, and has 1,045,664,644 ordinary shares in issue (excluding treasury shares).
To view the previous 3 months' Releases in full, click here
4.2 Other News
+ BSS/News Bites:
RELX PLC is placed 669/1346 in BSS News Bites' ranking of United Kingdom performers in the past year, a percentile ranking of 51.
+ Vanguard Total World Stock ETF 2588:
The stock was one of 2588 global stocks selected by Vanguard Total World Stock ETF (VT) who sold 338,225 shares in the period May 31, 2018 to Jun 30, 2018 worth $US-551,350,586 at an estimated Volume Weighted Average Price (VWAP) of $US1630.1298. As at Jun 30, 2018, the Vanguard Total World Stock ETF held 0 shares worth $US1 or 342,247% by value of the ETF's portfolio [Ranked 1017 out of 2588 by value and 29 out of 154 for United Kingdom].
SECTION 5 RELX GLOBAL RANKING
Global Rank [out of 47,645 stocks] and Rank of RELX in the Europe Region [out of 8,516 stocks]
|Description||Value||Global Rank||In Eur Region|
|Total Assets (US$)||15.6B||2,052||415|
|Net Profit (US$)||2.1B||561||127|
|Return on Equity %||71.2||369||75|
|Net Profit Margin %||22.7||5,168||999|
|PV1000 (1Year) USD*||1,047||16,182||2,706|
|US$* Change (1Year) %||2.3||15,743||2,666|
* 1 year ago GBP 1 = USD 1.29
Aug 17, 2018: GBP 1 equals USD 1.27
SECTION 6 RELX SUMMARY FINANCIALS
6.1 Dividend History
+ Trailing 12 months dividend has improved from GBX24.9 in 2014 to GBX40.1 in 2018.
6.2 Financials Summary (Past 3 years)
|Year ended||Dec 2017||Dec 2016||Dec 2015|
|Sales (USD B)||9.4||8.8||5.2|
|Pretax (USD B)||2.2||1.9||1.1|
+ Net profit was up 42.9% from US$1.5 billion in 2016 to US$2.1 billion in 2017.
+ Earnings Per Share (EPS) was up 46% from 56.30 GBX to 82.20 GBX.
SECTION 7 RELX PROFILE
RELX PLC provides information solutions for professional customers across industries. The Company publishes information for the scientific, medical, legal, and business sectors.
7.2 Top Management
The chairman is Anthony Habgood and the chief executive officer is Erik Engstrom.
7.3 Issued Capital
Based on 1,046,347,475 issued shares the market capitalisation is GBP17.8 billion (US$22.7 billion).
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
Economic Sector: Consumer Cyclicals
Business Sector: Cyclical Consumer Services
Industry Group: Media & Publishing
L:REL; LON:REL; LN:REL; REL.L