Israeli stock report - Bank Hapoalim B.M.

ISRAEL

Bank Hapoalim B.M. keeps rising, up 3.7% in 3 days September 17, 2018 17:30 IDT

NEWS BITES - MIDDLE EAST & NORTH AFRICA

Bank Hapoalim B.M. (TASE:POLI), Israel's 2nd largest Bank by market cap, extended its gains on Monday, rising an additional 5.0 agorot (0.2%) to close at NIS26.47. The shares have lifted 94.0 agorot (3.7%) over the past three trading days, compared with the TA-25 Index which rose 20.1 points (1.2%) in the three days for a relative price increase of 2.5%. Cumulative volume in the 3 days was 0.7 times the average 3-day volume of 1.9 million shares. Its MCap is NIS35 billion (US$9.8 billion).

Highlights in today's Report:

SECTION 1 BULLISH SIGNALS

SECTION 2 BEARISH SIGNALS

SECTION 3 PRICE VOLUME DYNAMICS

SECTION 4 RELATED NEWS

SECTION 5 SUMMARY FINANCIALS

SECTION 6 PROFILE

SECTION 1 BANK HAPOALIM B.M. BULLISH SIGNALS

1.1 Technicals:

+ The price lifted 3.7% in the last week and 3.6% in the last month.

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 26.25 minus the 26-day EMA of 26.11 is positive 0.13 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.

+ The 2.8% discount to 12-month high of NIS27.24 against the 17.3% premium to 12-month low of NIS22.56 suggests the stock continues to push for new highs.

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

+ The present value of NIS1,000 (PV1000) invested one year ago in Bank Hapoalim B.M. is NIS1,154, comprising a capital gain of NIS130 and dividend reinvested of NIS24.

PV10001-week1-month1-year
POLI.TASE1,0371,0361,154
TA-25 Index1,0141,0131,173

+ The present value of NIS1,000 (PV1000) invested ten years ago in Bank Hapoalim B.M. is NIS2,841, including a capital gain of NIS1,512 and dividend reinvested of NIS330.

+ 10 years Multiplier in NIS = 2.841x

+ Compound Annual Growth Rate (CAGR) in NIS = 11.0%

Present Value of USD1,000 invested 10 years ago:

+ The present value of USD1,000 (PV1000) invested ten years ago in Bank Hapoalim B.M. is $US2,837, including a capital gain of $US1,508 and dividend reinvested of $US329.

+ 10 years ago USD 1 equalled NIS 3.5727

+ 10 years Multiplier in USD = 2.837x

+ Compound Annual Growth Rate (CAGR) in USD = 11.0%

Sep 17, 2018: USD 1 equals NIS 3.58

High Performance Indicators and rank of Bank Hapoalim B.M. in the Israel market:

DescriptionPOLI ValueRank In Market
Today's Trading TurnoverNIS23.3 million (US$6.5 million)In Top 1%
EBITDA Margin %131.5In Top 5%
Volatility %0.7In Top 8%

1.2 Fundamentals:

+ The P/E of 16 multiplied by the P/NTA of 1 is 15.7. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.

+ The relative yield of POLI, defined by its yield of 1.9%, divided by average yield of dividend yielding stocks in the TA-25 Index of 1.6% is 117.6%. This suggests Bank Hapoalim B.M. stock is undervalued in dividend yield terms.

+ Net profit margin has averaged 25.4% in the last 3 years. This is considered superior and suggests a high margin of safety.

SECTION 2 BANK HAPOALIM B.M. BEARISH SIGNALS

Low Performance Indicators and rank of Bank Hapoalim B.M. in the Israel market:

DescriptionPOLI ValueRank In Market
Return on Assets [ROA] %0.5In Bottom Quartile
% Prem to Vol Wtd Price1.1In Bottom Quartile

2.1 Fundamentals:

+ Total Liabilities/EBITDA of 29.9 which compares unfavourably with the Joseph Piotroski benchmark of 5.

+ As per the Du Pont analysis, Return on Equity [ROE] is less than stellar at 6.0%; a deterioration from 7.6% last year. ROE is computed as net profit margin of 20.3% times asset turnover [sales/assets] of 0.02 times leverage factor [total assets/shareholders' equity] of 12.6.

YOY Deterioration in ROE and Profit Margin

Du Pont AnalysisROEProfit MarginAsset TurnoverEquity Multiplier
Current Year6.020.30.0212.6
Previous Year7.625.50.0213.2

Annual Trend in Revenue, EPS and EBITDA:

+ Earnings per share growth rate has shown signs of deterioration in recent years. [Year ended, all figures in %]

YearRevenue GrowthEPS GrowthEBITDA Growth
Dec 173.3-16.2-4.2
Dec 163.7-14.7183.2
Dec 15-13.2-30.3

2.2 Overvaluation [compared with sector average]:

+ Price/Earnings of 16 [13.0].

+ Return on Equity 6.0% [7.7%].

+ Return on Assets 0.5% [0.6%].

+ Dividend yield of 1.9% [2.8%].

SECTION 3 BANK HAPOALIM B.M. PRICE VOLUME DYNAMICS

3.1 Momentum:

+ Volume: there were 882,040 shares worth NIS23.3 million (US$6.5 million) traded today. In the past week, volume was 1.4 times average and the shares were up 3.7%. The volume was 0.5 times the average daily trading volume of 1.9 million shares.

3.2 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 37.2% (or a turnover period of 2 years 8 months). This average length of ownership of the stock at 0.7 times the average holding period of 3 years 9 months for stocks in the TA-25 Index suggests a slightly larger number of speculators on the share register, making it less safe for long-term investors.

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 6%.

POLIClose (NIS)Dividends (NIS)Capital Gain %% YieldAnnual Return %
Sep 1726.470.51132.215.2
1 Yr ago23.420.6616.63.319.9
2 Yrs ago20.080.483.62.56.1
3 Yrs ago19.390.45.42.27.5
4 Yrs ago18.40.3216.1218.1

Close 5 years ago NIS15.84

3.4 Beta & Alpha:

+ Beta: the Beta of Bank Hapoalim B.M. 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 -1.0. The actual return of 11.18% fell short of the expected return of 12.1%, reflecting underperformance.

3.5 Year-To-Date

+ Bank Hapoalim B.M. (TASE:POLI), strengthened NIS1.10 (or 4.3%) year-to-date (YTD) in 2018 to close at NIS26.47 today. Compared with the TA-25 Index which has risen 9.9% YTD, this is a relative price change of -5.5%.

SECTION 4 BANK HAPOALIM B.M. RELATED NEWS

Other News

+ BSS/News Bites:

Bank Hapoalim B.M. is placed 97/334 in BSS News Bites' ranking of Israel performers in the past year, a percentile ranking of 71.

+ Vanguard Total World Stock ETF 7577:

The stock was one of 7577 global stocks selected by Vanguard Total World Stock ETF (VT). As at Jun 30, 2018, the Vanguard Total World Stock ETF held 316,102 shares worth $US2,146,990 or 0.01% by value of the ETF's portfolio [Ranked 1280 out of 7577 by value and 3 out of 59 for Israel].

SECTION 5 BANK HAPOALIM B.M. SUMMARY FINANCIALS

5.1 Dividend History

+ Trailing 12 months dividend has improved from 32.0 agorot in 2014 to 51.25 agorot in 2018.

5.2 Financials Summary (Past 3 years)

Year endedDec 2017Dec 2016Dec 2015
Sales (USD B)32.94
Pretax (USD B)1.21.41.4
Net (USD M)598.9729.8846.1
EPS (NIS)1.651.972.31

+ Net profit was down 17.9% from US$729.8 million in 2016 to US$598.9 million in 2017.

+ Earnings Per Share (EPS) was down 16.2% from NIS1.97 to NIS1.65.

SECTION 6 BANK HAPOALIM B.M. PROFILE

6.1 Activities

Bank Hapoalim is an Israel-based banking and financial institution which has a network of 252 branches and eight regional business centres in Israel and a presence in many countries.

6.2 Top Management

The chief executive officer is Ari Pinto and the chief financial officer is Yadin Antebi.

6.3 Issued Capital

Based on 1,320,573,814 issued shares the market capitalisation is NIS35 billion (US$9.8 billion).

COMPANY IDENTIFIERS

Contact: 972-3-5673333

Physical Address: 50 Rothschild Boulevard Tel Aviv, 66883 Israel

State/Province/Country: Israel

Country of Incorporation: Y

Exchange: Tel Aviv Stock Exchange

Business Sector: Banking & Investment Services

Industry Group: Banking Services

Industry: Banks

Economic Sector: Financials

ISIN: IL0006625771

TV:POLI; TLV:POLI; TA:POLI; TA:POLI; IT:POLI; POLI.TA

PermID: 4295875283

RIC: POLI.TA

Bank Hapoalim Bm

Source: www.BuySellSignals.com