Israeli stock report - Bank Hapoalim B.M.

ISRAEL

Bank Hapoalim B.M. inches higher, resistance at 12-day EMA June 20, 2018 17:30 IDT

NEWS BITES - MIDDLE EAST & NORTH AFRICA

Bank Hapoalim B.M. (TASE:POLI), Israel's 2nd largest Bank by market cap, has increased 0.4% but fell short of the 12-day Exponential Moving Average [EMA] of NIS24.80. Compared with the TA-25 Index which rose 11.8 points (0.8%) in the day, the relative price change was -0.4%. The volume was 0.6 times the average daily trading volume of 2.1 million shares. Bank Hapoalim B.M.'s stock last traded at NIS24.70.

Highlights in today's Report:

SECTION 1 BULLISH SIGNALS

SECTION 2 BEARISH SIGNALS

SECTION 3 PRICE VOLUME DYNAMICS

SECTION 4 RELATED NEWS

SECTION 5 GLOBAL RANKING

SECTION 6 SUMMARY FINANCIALS

SECTION 7 PROFILE

SECTION 1 BANK HAPOALIM B.M. BULLISH SIGNALS

1.1 Fundamentals:

+ The P/E of 15 multiplied by the P/NTA of 0.9 is 13.8. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.

+ The relative yield of POLI, defined by its yield of 3.1%, divided by average yield of dividend yielding stocks in the TA-25 Index of 1.8% is 168.1%. 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.

1.2 Technicals:

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

+ The present value of NIS1,000 (PV1000) invested ten years ago in Bank Hapoalim B.M. is NIS2,020, including a capital gain of NIS785 and dividend reinvested of NIS234.

+ 10 years Multiplier in NIS = 2.02x

+ Compound Annual Growth Rate (CAGR) in NIS = 7.3%

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 $US1,863, including a capital gain of $US647 and dividend reinvested of $US216.

+ 10 years ago USD 1 equalled NIS 3.3478

+ 10 years Multiplier in USD = 1.863x

+ Compound Annual Growth Rate (CAGR) in USD = 6.4%

Jun 20, 2018: USD 1 equals NIS 3.63

1.3 High Performance Indicators:

DescriptionPOLI ValueRank In Market
Today's TurnoverNIS30.1 million (US$8.3 million)In Top 1%
EBITDA Margin %131.5In Top 6%
Volatility %0.7In Top Quartile

SECTION 2 BANK HAPOALIM B.M. BEARISH SIGNALS

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 is less than stellar at 6.0%. This 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. Also, this has deteriorated from 7.6% last year.

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

+ 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 15 [12.0].

+ Return on Equity 6.0% [7.7%].

+ Return on Assets 0.5% [0.6%].

2.3 Low Performance Indicator:

DescriptionPOLI ValueRank In Market
Return on Assets [ROA] %0.5In Bottom Quartile

SECTION 3 BANK HAPOALIM B.M. PRICE VOLUME DYNAMICS

3.1 Technicals:

+ Volume: there were 1,220,000 shares worth NIS30.1 million (US$8.3 million) traded today. In the past week, volume was 1.2 times average and the shares were up 0.2%.

+ Bank Hapoalim B.M. is at a discount of 5.7% to its 12-month high of NIS26.19 on May 22. It is also at a premium of 9.5% to the 12-month low of NIS22.56 on November 22, 2017.

+ The present value of NIS1,000 (PV1000) invested one year ago in Bank Hapoalim B.M. is NIS1,088, comprising a capital gain of NIS54 and dividend reinvested of NIS33.

PV10001-week1-month1-year
POLI.TASE1,0029541,088
TA-25 Index9981,0151,070

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 POLI would have produced a return of 8.6%.

POLIClose (NIS)Dividends (NIS)Capital Gain / (Loss) %% YieldAnnual Return %
Jun 2024.70.765.43.28.6
1 Yr ago23.430.5925.43.128.6
2 Yrs ago18.680.44(3.1)2.3(0.8)
3 Yrs ago19.290.353.91.95.8
4 Yrs ago18.560.3719.92.422.3

Close 5 years ago NIS15.48

3.3 Beta & Alpha:

+ Beta: the Beta of Bank Hapoalim B.M. stock is 0.7. 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 0.4. The actual return of 6.7% exceeded the expected return of 6.3%, reflecting outperformance.

3.4 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 39.5% (or a turnover period of 2 years 6 months). This average length of ownership of the stock at 0.8 times the average holding period of 3 years 3 months for stocks in the TA-25 Index suggests a larger number of speculators on the share register, making it less safe for long-term investors.

3.5 Year-To-Date

+ Bank Hapoalim B.M. (TASE:POLI), dipped 67.25 agorot (or 2.7%) year-to-date (YTD) in 2018 to close at NIS24.70 today. Compared with the TA-25 Index which has risen 1.8% YTD, this is a relative price change of -4.5%.

SECTION 4 BANK HAPOALIM B.M. RELATED NEWS

Other News

+ BSS/News Bites:

Bank Hapoalim B.M. is placed 106/340 in BSS News Bites' ranking of Israel performers in the past year, a percentile ranking of 69.

+ Vanguard Total World Stock ETF 7581:

The stock was one of 7581 global stocks selected by Vanguard Total World Stock ETF (VT) who bought 30,535 shares in the period Jan 31, 2018 to Apr 30, 2018 worth $US746,785 at an estimated Volume Weighted Average Price (VWAP) of $US24.4567. As at Apr 30, 2018, the Vanguard Total World Stock ETF held 316,102 shares worth $US2,155,118 or 0.01% by value of the ETF's portfolio [Ranked 1256 out of 7581 by value and 3 out of 58 for Israel].

SECTION 5 BANK HAPOALIM B.M. GLOBAL RANKING

Global Rank [out of 47,592 stocks] and Rank in the Asia Region [out of 22,824 stocks]

DescriptionValueGlobal RankIn Asia Region
MCap (US$)9B1,653514
Total Assets (US$)123.5B462120
Revenue (US$)2.9B3,4481,346
Net Profit (US$)586.8M1,659500
Return on Equity %6.020,15611,238
Net Profit Margin %20.35,8502,463
Price to Book0.910,4146,208
Price/Earnings14.98,6584,496
Yield %3.19,3093,895
PV$1000 (1Year) US$*1,05618,3098,232
US$* Change (1Year) %1.418,8418,626

* 1 year ago USD 1 = NIS 3.53

Jun 20, 2018: USD 1 equals NIS 3.63

SECTION 6 BANK HAPOALIM B.M. SUMMARY FINANCIALS

6.1 Dividend History

+ Trailing 12 months dividend has improved from 37.0 agorot in 2014 to 75.61 agorot in 2018.

6.2 Financials Summary

Year endedDec 2017Dec 2016Dec 2015
Sales (USD B)2.92.84
Pretax (USD B)1.21.41.4
Net (USD M)595.5725.6841.2
EPS (NIS)1.651.972.31

+ Net profit was down 17.9% from US$725.6 million in 2016 to US$595.5 million in 2017.

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

SECTION 7 BANK HAPOALIM B.M. PROFILE

7.1 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.

7.2 Top Management

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

7.3 Issued Capital

Based on 1,320,573,814 issued shares the market capitalisation is NIS32.6 billion (US$9 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

Economic Sector: Financials

Business Sector: Banking & Investment Services

Industry Group: Banking Services

Industry: Banks

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