UK stock report - Reed Elsevier

UK

RELX accelerates rise, announces dividend April 20, 2018 16:30 BST

NEWS BITES - EUROPE

RELX PLC (L:REL), the 2nd largest Media company by market cap in the United Kingdom, has increased GBX33.50 (2.2%) over the past two trading days, compared with the FTSE 100 Index which rose 50.8 points (0.7%) in the two days for a relative price increase of 1.5%. Cumulative volume in the 2 days was 1.2 times the average 2-day volume of 3.4 million shares. The stock rose 1% on Thursday and 1.2% on Friday to close at GBX1,544.0.

AGM

RELX has increased 1.2% over the 1 trading session since the annual general meeting (AGM) on Thursday, April 19.

UPCOMING EVENT: DIVIDEND

The company announced a dividend of GBX27.70 per share; ex-dividend date is Thursday, April 26; the payable date is Tuesday, May 22.

THE PAST FIVE YEARS

RELX advances 128% in 5 years

RELX PLC (L:REL), has advanced GBX867.19 (or 128.1%) in the past five years to close at GBX1,544.0. Compared with the FTSE 100 Index which has risen 17.2% over the same period, this is a relative price increase of 110.9%.

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 Indicator

SECTION 3 PRICE VOLUME DYNAMICS

Technicals, 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 1.3. 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 GBP163.2 million was GBP1.4 billion. The multiple EVA/Cost of Capital was exemplary at 8.9 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.

1.2 Undervaluation [compared with sector average]:

+ Return on Assets 13.6% [5.7%].

+ Return on Capital Employed 33.4% [12.8%].

1.3 Technicals:

+ The price lifted 2.0% in the last week and climbed 4.8% in the last month.

+ Compared with the FTSE 100 Index which rose 1.4% for the week and 4.3% for the month, this represented a relative price increase for RELX stock of 0.6% for the week and 0.4% for the month.

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 1,513.76 minus the 26-day EMA of 1,504.04 is positive 9.72 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.

+ The stock's relative price strength percentile is improving at 30 for 6 months, 48 for 3 months and 70 for 1 month.

+ The present value of GBP1,000 (PV1000) invested twenty years ago in RELX is GBP3,927, including a capital gain of GBP2,419 and dividend reinvested of GBP508.

+ 20 years Multiplier in GBP = 3.927x

+ Compound Annual Growth Rate (CAGR) in GBP = 7.1%

Apr 20, 2018: GBP 1 equals USD 1.41

1.4 High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverGBP38.9 million (US$54.8 million)In Top 3%
Return on Capital Employed [ROCE] %33.4In Top 5%
Volatility %0.8In Top Quartile
Price/MAP501.04In Top Quartile
Price Change %1.2In Top Quartile
Return on Assets [ROA] %13.6In Top Quartile

SECTION 2 RELX BEARISH SIGNALS

2.1 Fundamentals:

+ The relative yield of the stock, defined by its yield of 0.8%, divided by average yield of dividend yielding stocks in the FTSE 100 Index of 2.7% is 28.3%. This suggests the stock is overvalued in dividend yield terms.

+ Total Liabilities/EBITDA of 5.2 which compares unfavourably with the Joseph Piotroski benchmark of 5.

2.2 Overvaluation [compared with sector average]:

+ Price/Sales of 2.2 [1.7]. We estimate RELX stock is trading at a current year Price/Sales of 1.6 and a forward year Price/Sales of 1.1.

+ Dividend yield of 0.8% [2.8%].

2.3 Technicals:

Overbought/Bearish/Resistance Signals:

+ The Relative Strength Index (RSI) of 72.8 has penetrated the overbought line of 70, suggesting the price gain of 5.2% in the last 14 days is unusually high.

+ The stock is overbought according to the Williams % R indicator of -2.1, suggesting the price is close to its 14-day high of GBX1,546.0.

2.4 Low Performance Indicator:

DescriptionValueRank In Market
Total Debt to Equity2.9In Bottom 3%

SECTION 3 PRICE VOLUME DYNAMICS

3.1 Technicals:

+ RELX is at a discount of 13.4% to its 12-month high of GBX1,784.0 on November 28, 2017. It is also at a premium of 10.4% to the 12-month low of GBX1,399.0 on February 15.

+ The present value of GBP1,000 (PV1000) invested one year ago in RELX is GBP1,005, comprising a capital loss of GBP2 and dividend reinvested of GBP7.

PV10001-week1-month1-year
REL.L1,0201,0481,005
FTSE 100 Index1,0141,0441,035

3.2 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has consistently exceeded 0%.

RELClose (GBX)Dividends (GBX)Capital Gain / (Loss) %% YieldAnnual Return %
Apr 201,54411.7(0.2)0.80.6
1 Yr ago1,546.9932.5521.22.623.7
2 Yrs ago1,276.4126.419.62.522.1
3 Yrs ago1,067.3424.9531.43.134.4
4 Yrs ago812.4426.28203.923.9

Close 5 years ago GBX676.81

3.3 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 -3.1. The actual return of -3.71% fell short of the expected return of -0.6%, reflecting underperformance.

3.4 Aggregate Volumes, Prices and Turnover Period:

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

+ London: REL.L 2,518,414 [VI of 0.7] volume 54.75% of aggregate. Price: GBX1,544.0.

+ Amsterdam: REN.AE 2,080,000 [VI of 0.9] volume 45.22% of aggregate. Price: EUR17.63. Using the current exchange rate of EUR1 equals 87.6451GBX, The shares are at a 0.1% premium to the close price on London.

+ Aggregate volume: there were 4.6 million shares of RELX worth GBP71 million traded today. The aggregate volume was 0.8 times average trading of 5.6 million shares.

The turnover rate in the 12 months to date was 80.1% (or a turnover period of 1 year 3 months). This average length of ownership of the stock at 41.7 times the average holding period of 11 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 47,666 stocks] and Rank in the Europe Region [out of 8,559 stocks]

DescriptionValueGlobal RankIn Eur Region
MCap (US$)22.9B662168
Total Assets (US$)13.3B2,316477
Revenue (US$)6.9B1,847425
Net Profit (US$)1.2B971196
Return on Equity %50.7624132
Net Profit Margin %17.06,9661,222
Price/Earnings37.015,2022,895
Yield %0.818,4183,283
US$* Change (1Year) %6.319,7724,292

Apr 20, 2018: GBP 1 equals USD 1.41

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 825/1372 in BSS News Bites' ranking of United Kingdom performers in the past year, a percentile ranking of 40.

+ Vanguard Total World Stock ETF 7517:

The stock was one of 7517 global stocks selected by Vanguard Total World Stock ETF (VT) who bought 25,588 shares in the period Nov 30, 2017 to Jan 31, 2018 worth $US41,558,876 at an estimated Volume Weighted Average Price (VWAP) of $US1624.1549. As at Jan 31, 2018, the Vanguard Total World Stock ETF held 322,915 shares worth $US7,430,606 or 0.04% by value of the ETF's portfolio [Ranked 410 out of 7517 by value and 25 out of 314 for United Kingdom].

SECTION 5 RELX FINANCIALS

5.1 Financials Summary

Year endedDec 2017Dec 2016Dec 2015
Sales (USD B)10.49.85.7
Pretax (USD B)2.42.11.2
Net (USD)2.3B1.6B957.8M
EPS (GBP)0.8220.563-

Net profit was up 42.9% from US$1.6 billion in 2016 to US$2.3 billion in 2017. Earnings Per Share (EPS) was up 46% from 56.30 GBX to 82.20 GBX.

5.2 Trailing 12 Months Dividends

Trailing 12 Months ToValue (GBX)
20 Apr 201811.7
20 Apr 201732.55
20 Apr 201626.4
20 Apr 201524.95
20 Apr 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 1,054,380,378 issued shares the market capitalisation is GBP16.3 billion (US$22.9 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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April 20: RELX: Result of AGM

The Annual General Meeting of RELX PLC was held on Thursday 19 April 2018.

The table below shows the results of the poll on all 21 resolutions. Each shareholder present in person, or by proxy, was entitled to one vote per share held.

April 19: RELX: Announcement of Non-Discretionary Share Buyback Programme

RELX PLC and RELX N.V. (the "Companies") announce in compliance with the EU Market Abuse Regulation that they will implement an irrevocable, non-discretionary programme to repurchase their respective ordinary shares up to the value of Pound200 million in total between 19 April 2018 and 23 July 2018 (the "Programme").

April 19: RELX: Director Declaration

Pursuant to Listing Rule 9.6.14(2), RELX PLC ("the Company") announces that Ben van der Veer, a Non-Executive Director of the Company, was appointed as a Non-Executive Director of Koninklijke Vopak N.V. (Royal Vopak) with effect from 18 April 2018. Koninklijke Vopak N.V. (Royal Vopak) is listed on the Euronext Amsterdam Stock Exchange.

April 19: RELX: Transaction in Own Shares

RELX PLC announces that today it purchased through UBS Limited 133,439 RELX PLC ordinary shares of 14 51/116 pence each on the London Stock Exchange at a price of 1526.1793 pence per share. The purchased shares will be held as treasury shares. Following the above purchase, RELX PLC holds 71,468,492 ordinary shares in treasury, and has 1,052,533,533 ordinary shares in issue (excluding treasury shares).

April 17: RELX: Transaction in Own Shares

RELX PLC announces that today it purchased through UBS Limited 159,166 RELX PLC ordinary shares of 14 51/116 pence each on the London Stock Exchange at a price of 1512.3494 pence per share. The purchased shares will be held as treasury shares. Following the above purchase, RELX PLC holds 71,175,553 ordinary shares in treasury, and has 1,052,823,323 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

RIC: REL.L

Relx Plc

Source: www.BuySellSignals.com