UK stock report - Reed Elsevier

UK

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

1.1 Technicals:

Overbought/Bearish/Resistance 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:

DescriptionREL ValueRank In Market
Total Debt to Equity2.9In Bottom 3%

1.2 Fundamentals:

+ 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

2.1 Technicals:

+ 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:

DescriptionREL ValueRank In Market
Today's Trading TurnoverGBP19.4 million (US$24.6 million)In Top 2%
Return on Capital Employed [ROCE] %33.4In Top 4%
Volatility %0.7In Top Quartile
Return on Assets [ROA] %13.6In Top Quartile
Price/MAP501.03In Top Quartile

2.2 Fundamentals:

+ 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.

PV10001-week1-month1-year
REL.L1,0081,0111,058
FTSE 100 Index9869861,023

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%.

RELClose (GBX)Dividends (GBX)Capital Gain %% YieldAnnual Return %
Aug 171,70440.13.12.45.6
1 Yr ago1,652.2211.717.60.818.5
2 Yrs ago1,404.3932.5537.53.240.7
3 Yrs ago1,021.5826.415.3318.3
4 Yrs ago885.7224.9523.33.526.7

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]

DescriptionValueGlobal RankIn Eur Region
MCap (US$)22.7B645167
Total Assets (US$)15.6B2,052415
Revenue (US$)9.4B1,455328
Net Profit (US$)2.1B561127
Return on Equity %71.236975
Net Profit Margin %22.75,168999
Price/Earnings20.710,8802,031
Yield %2.412,2822,457
PV1000 (1Year) USD*1,04716,1822,706
US$* Change (1Year) %2.315,7432,666

* 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 endedDec 2017Dec 2016Dec 2015
Sales (USD B)9.48.85.2
Pretax (USD B)2.21.91.1
Net (USD)2.1B1.5B864.4M
EPS (GBP)0.8220.563-

+ 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

7.1 Activities

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).

COMPANY IDENTIFIERS

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

Economic Sector: Consumer Cyclicals

Business Sector: Cyclical Consumer Services

Industry Group: Media & Publishing

ISIN: GB00B2B0DG97

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

PermID: 4295894769

RIC: REL.L

Relx Plc

Source: www.BuySellSignals.com