Brazilian stock report - Banco Bradesco preference
Banco Bradesco Preference Shares increases, 2 days' volume in a day May 18, 2018 18:00 BRT
NEWS BITES - BRIC
Banco Bradesco SA (SA:BBDC4), Brazil's 4th largest Bank by market cap, has increased 17.0 centavos (0.5%) from its last trading session of May 17 to close at R$31.52. Compared with the Brazil Index 50 which fell 105.4 points (0.8%) in the day, the relative price increase was 1.3%. The rise has been propped up by high volume of 2.2 times the average daily volume of 10.8 million preference shares.
THE PAST TWO YEARS
Banco Bradesco Preference Shares accelerates rise, up 60% in 2 years
Banco Bradesco SA (SA:BBDC4), has strengthened R$11.85 (60.2%) over the past two years, compared with the Brazil Index 50 which rose 5,439.9 points (63.9%) in the two years for a relative price change of -3.7%. The preference shares rose R$4.96 (25.2%) a year ago and R$6.89 (28.0%) in the past year to close at R$31.52.
Highlights in today's Report:
SECTION 1 BULLISH SIGNALS
Fundamentals, Undervaluation [compared with sector average], Technicals, Oversold/Bullish/Support Signals, High Performance Indicators
SECTION 2 BEARISH SIGNALS
Fundamentals, Low Performance Indicators
SECTION 3 PRICE VOLUME DYNAMICS
Technicals, Moving Annual Return, Beta, Turnover Rate & 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 STOCK BUZZ
SECTION 1 BANCO BRADESCO PREFERENCE SHARES BULLISH SIGNALS
1.1 Banco Bradesco Preference Shares Fundamentals:
+ The P/E of 12.9 multiplied by the P/NTA of 1.3 is 16.3. Being less than the Benjamin Graham benchmark of 22.5 the preference stock appears undervalued.
+ The relative yield of Banco Bradesco Preference Shares, defined by its yield of 3.6%, divided by average yield of dividend yielding stocks in the Brazil Index 50 of 2.2% is 164.8%. This suggests Banco Bradesco Preference Shares preference stock is undervalued in dividend yield terms.
+ Banco Bradesco Preference Shares is cash rich with Cash to Market Capitalisation at 69.2%.
+ Net profit margin has averaged 13.6% in the last 3 years. This is better than the sector average of 11.2% and suggests a high margin of safety.
+ As per the Du Pont analysis, Return on Equity of 15.0% is better than sector average of 11.9%. This is computed as net profit margin of 12.7% times asset turnover [sales/assets] of 0.17 times leverage factor [total assets/shareholders' equity] of 11.7.
1.2 Banco Bradesco Preference Shares Undervaluation [compared with sector average]:
+ Price to Book of 1.3 [1.5]. We estimate Banco Bradesco Preference Shares preference stock is trading at a current year Price to Book of 1.2 and a forward year Price to Book of 1.1.
+ Dividend yield of 3.6% [3.1%].
1.3 Banco Bradesco Preference Shares Technicals:
Uptrend: The preference stock rose on high volatility today and expanding price range.
+ The present value of R$1,000 (PV1000) invested one year ago in Banco Bradesco Preference Shares is R$1,329, comprising a capital gain of R$280 and dividend reinvested of R$50.
|Brazil Index 50||976||964||1,354|
+ The present value of BRL1,000 (PV1000) invested ten years ago in Banco Bradesco Preference Shares is R$2,741, including a capital gain of R$1,177 and dividend reinvested of R$564.
+ 10 years Multiplier in BRL = 2.741x
+ Compound Annual Growth Rate (CAGR) in BRL = 10.6%
Present Value of USD1,000 invested 10 years ago:
+ The present value of USD1,000 (PV1000) invested ten years ago in Banco Bradesco Preference Shares is $US1,221, including a capital loss of $US30 and dividend reinvested of $US251.
+ 10 years ago BRL 1 equalled USD 0.6074
+ 10 years Multiplier in USD = 1.221x
+ Compound Annual Growth Rate (CAGR) in USD = 2.0%
May 18, 2018: USD 1 equals BRL 3.7
1.4 Banco Bradesco Preference Shares Oversold/Bullish/Support Signals:
+ The Relative Strength Index (RSI) of 23.9 has breached the oversold line of 30, suggesting the price decrease of 8.8% in the last 14 days is unusually high.
+ The Money Flow Index [MFI] is 14.6 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 19.1 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 Banco Bradesco Preference Shares High Performance Indicators:
|Description||Value||Rank In Market|
|Today's Turnover||R$764.4 million (US$206.7 million)||In Top 2%|
|EBITDA Margin %||75.7||In Top Quartile|
SECTION 2 BANCO BRADESCO PREFERENCE SHARES BEARISH SIGNALS
2.1 Banco Bradesco Preference Shares Fundamentals:
Overvaluation [compared with sector average]:
+ Price/Earnings of 12.9 [7.4]. We estimate Banco Bradesco Preference Shares preference stock is trading at a current year P/E of 7 and a forward year P/E of 6.9.
2.2 Banco Bradesco Preference Shares Low Performance Indicators:
|Description||Value||Rank In Market|
|Total Debt to Equity||4.9||In Bottom 6%|
|Return on Assets [ROA] %||1.3||In Bottom Quartile|
SECTION 3 BANCO BRADESCO PREFERENCE SHARES PRICE VOLUME DYNAMICS
+ Volume: there were 24,250,000 preference shares worth R$764.4 million (US$206.7 million) traded today. In the past week, volume was 1.4 times average and the preference shares were down 4.0%.
+ The Banco Bradesco Preference Shares is at a discount of 17.4% to its 12-month high of R$38.15 traded on January 31.
3.2 Moving Annual Return
Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 4 of the last 5 years. An investment a year ago in BBDC4 would have produced a return of 32.6%.
|BBDC4||Close (BRL)||Dividends (BRL)||Capital Gain / (Loss) %||% Yield||Annual Return %|
|1 Yr ago||24.63||1.1||25.2||5.6||30.8|
|2 Yrs ago||19.67||0.95||(8.6)||4.4||(4.2)|
|3 Yrs ago||21.52||0.79||13.9||4.2||18.1|
|4 Yrs ago||18.9||0.64||6.8||3.6||10.4|
Close 5 years ago R$17.70
+ Beta: the Beta of Banco Bradesco Preference Shares preference stock is 1.4. A Beta greater than 1 suggests this is a high risk, high return preference stock with volatility greater than that of the market.
3.4 Turnover Rate & Turnover Period:
+ The turnover rate in the 12 months to date was 79.5% (or a turnover period of 1 year 3 months). This average length of ownership of the preference stock at 0.8 times the average holding period of 1 year 6 months for preference stocks in the Brazil Index 50 suggests a larger number of speculators on the share register, making it less safe for long-term investors.
SECTION 4 BANCO BRADESCO PREFERENCE SHARES RANKING
4.1 Global Rank [out of 47,736 stocks] and Rank in the American Region [out of 11,984 stocks]
|Description||Value||Global Rank||In Am Region|
|Total Assets (US$)||357.9B||217||108|
|Net Profit (US$)||4.6B||218||113|
|Return on Equity %||15.0||7,680||1,570|
|Net Profit Margin %||12.7||9,379||2,232|
|Price to Book||1.4||15,884||2,682|
|PV$1000 (1Year) US$*||1,113||23,624||6,311|
|US$* Change (1Year) %||26.0||11,654||2,397|
* 1 year ago USD 1 = BRL 3.11
May 18, 2018: USD 1 equals BRL 3.7
4.2 Independent Ratings
+ BSS/News Bites:
Banco Bradesco SA is placed 97/266 in BSS News Bites' ranking of Brazilian performers in the past year, a percentile ranking of 64.
+ Vanguard Total World Stock ETF 7517:
The stock was one of 7517 global stocks selected by Vanguard Total World Stock ETF (VT). As at Jan 31, 2018, the Vanguard Total World Stock ETF held 302,856 shares worth $US3,596,821 or 0.02% by value of the ETF's portfolio [Ranked 823 out of 7517 by value and 7 out of 122 for Brazil].
SECTION 5 BANCO BRADESCO PREFERENCE SHARES FINANCIALS
5.1 Financials Summary
|Year ended||Dec 2016||Dec 2015||Dec 2014|
|Sales (USD B)||57||43.1||29.3|
|Pretax (USD B)||7.7||2.7||5.5|
|Net (USD B)||4.3||5.1||4.3|
Net profit was down 16.8% from US$5.1 billion in 2015 to US$4.3 billion in 2016. Earnings Per Share (EPS) was down 14.2% from R$2.83 to R$2.43.
5.2 Annual Report for the year ended December 31, 2016 (year-on-year comparisons with previous corresponding period)-
+ Total income up 32.3% from BRL152.7b ($US38.3b) to BRL202.0b ($US62.1b).
+ Total income to total assets up from 0.1 to 0.2.
+ Deposits up 19.5% to BRL235.5b ($US72.4b).
+ Net Loans up 2.2% to BRL312.7b ($US96.1b).
+ Net profit down 16.8% from BRL18.1b ($US4.6b) to BRL15.1b ($US4.6b)
+ EPS down 14.3% from BRL3.43 (US86.12c) to BRL2.94 (US90.5c).
+ Return on Equity down from 18.9% to 15%.
+ Tier 1 Ratio down from 12.7% to 12%.
+ Tier 2 Ratio down from 4.1% to 3.4%.
+ Non-Performing loans to Net loans improved from 7.94% to 5.63%.
+ Net tangible assets per share steady at BRL15.2 ($US4.7).
5.3 Trailing 12 Months Dividends
|Trailing 12 Months To||Value (centavos)|
|18 May 2018||113.74|
|18 May 2017||109.92|
|18 May 2016||94.96|
|18 May 2015||79.29|
|18 May 2014||64.08|
SECTION 6 BANCO BRADESCO PREFERENCE SHARES PROFILE
Banco Bradesco S.A. attracts deposits and offers commercial banking services. The Bank offers business loans, personal credit, mortgages, lease financing, mutual funds, securities brokerage, and Internet banking services. Bradesco operates in Brazil and Argentina, the United States, the Cayman Islands, and the United Kingdom. Bradesco offers credit cards, insurance, and pension funds.
6.2 Industry & Sector
|Classification Level||Name of Sector|
|Business Sector||Banking & Investment Services|
|Industry Group||Banking Services|
6.3 Top Management
The chief executive officer is Luiz Carlos Trabuco Cappi.
6.4 Issued Capital
Based on 3,359,928,872 issued shares the market capitalisation is R$105.9 billion (US$28.6 billion).
SECTION 7 BANCO BRADESCO PREFERENCE SHARES STOCK BUZZ
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May 07: Banco Bradesco Preference Shares announces dividend
Banco Bradesco Preference Shares today announced a cash dividend of 1.90 centavos per share. The ex dividend date is Thursday, May 03, 2018 and the record date is Wednesday, May 02, 2018 and it is payable on Friday, June 01.
April 09: Banco Bradesco Preference Shares announces dividend
Banco Bradesco Preference Shares today announced a cash dividend of 1.90 centavos per share. The ex dividend date is Tuesday, April 03, 2018 and the record date is Monday, April 02, 2018 and it is payable on Wednesday, May 02.
March 29: Banco Bradesco Preference Shares announces Bonus issue
The company has announced a 100 for 10 bonus issue of shares, on Friday, March 30.
March 05: Banco Bradesco Preference Shares announces dividend
Banco Bradesco Preference Shares today announced a cash dividend of 1.90 centavos per share. The ex dividend date is Friday, March 02, 2018 and the record date is Thursday, March 01, 2018 and it is payable on Monday, April 02.
February 05: Banco Bradesco Preference Shares announces dividend
Banco Bradesco Preference Shares today announced a cash dividend of 1.90 centavos per share. The ex dividend date is Friday, February 02, 2018 and the record date is Thursday, February 01, 2018 and it is payable on Thursday, March 01.
Contact: (11)3684 3749
Physical Address: Cidade de Deus s/n Vila Yara Osasco, SP 06029-900 Brazil
Country of Incorporation: Brazil
Exchange: BM&F BOVESPA
SA:BBDC4; SAO:BBDC4; BZ:BBDC4; BBDC4.SA
Banco Bradesco S.A.