Israeli stock report - Israel Discount Bank

ISRAEL

Israel Discount Bank keeps rising, up 6.4% in 4 days April 17, 2018 17:30 IDT

NEWS BITES - MIDDLE EAST & NORTH AFRICA

Israel Discount Bank Ltd. (TASE:DSCT), Israel's 4th largest Bank by market cap, extended its gains on Tuesday, rising an additional 6.0 agorot (0.6%) to close at NIS10.28. The shares have jumped 62.20 agorot (6.4%) over the past four trading days, compared with the TA-25 Index which rose 43.6 points (3.0%) in the four days for a relative price increase of 3.4%. Cumulative volume in the 4 days was 0.6 times the average 4-day volume of 3.8 million shares.

Highlights in today's Report:

SECTION 1 BULLISH SIGNALS

Fundamentals, Undervaluation [compared with sector average], Technicals, High Performance Indicators

SECTION 2 BEARISH SIGNALS

Fundamentals, Technicals, Overbought/Bearish/Resistance Signals, Low Performance Indicator

SECTION 3 PRICE VOLUME DYNAMICS

Momentum, 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, 2017 (year-on-year comparisons with previous corresponding period)-

SECTION 6 PROFILE

Activities, Industry & Sector, Top Management, Issued Capital

SECTION 1 ISRAEL DISCOUNT BANK BULLISH SIGNALS

1.1 Fundamentals:

+ The P/E of 9.5 multiplied by the P/NTA of 0.8 is 7.4. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.

1.2 Undervaluation [compared with sector average]:

+ Price/Earnings of 9.5 [11.8]. We estimate Israel Discount Bank stock is trading at a current year P/E of 7.3 and a forward year P/E of 5.6.

+ Price to Book of 0.8 [1.0]. We estimate Israel Discount Bank stock is trading at a current year Price to Book of 0.7 and a forward year Price to Book of 0.7.

+ Price/Earnings/Growth of 0.3 [1.9].

1.3 Technicals:

+ The 2.8% discount to 12-month high of NIS10.58 against the 21.5% premium to 12-month low of NIS8.46 suggests the stock continues to push for new highs.

+ In the last three months the stock has hit a new 52-week high twice.

+ The present value of NIS1,000 (PV1000) invested one year ago in Israel Discount Bank is NIS1,202, for a capital gain of NIS202.

PV10001-week1-month1-year
DSCT.TASE1,0379841,202
TA-25 Index1,0311,0281,075

+ The present value of NIS1,000 (PV1000) invested ten years ago in Israel Discount Bank is NIS1,244, including a capital gain of NIS175 and dividend reinvested of NIS68.

+ 10 years Multiplier in NIS = 1.244x

+ Compound Annual Growth Rate (CAGR) in NIS = 2.2%

Present Value of USD1,000 invested 10 years ago:

+ The present value of USD1,000 (PV1000) invested ten years ago in Israel Discount Bank is $US1,230, including a capital gain of $US162 and dividend reinvested of $US67.

+ 10 years ago USD 1 equalled NIS 3.4977

+ 10 years Multiplier in USD = 1.23x

+ Compound Annual Growth Rate (CAGR) in USD = 2.1%

Apr 17, 2018: USD 1 equals NIS 3.54

1.4 High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverNIS23.3 million (US$6.6 million)In Top 4%
EBITDA Margin %140.4In Top 5%
P/E * P/NTA7.43In Top Quartile
Price/MAP2001.06In Top Quartile
Price/Earnings/Growth0.3In Top Quartile

SECTION 2 ISRAEL DISCOUNT BANK BEARISH SIGNALS

2.1 Fundamentals:

+ Total Liabilities/EBITDA of 23.5 which compares unfavourably with the Joseph Piotroski benchmark of 5.

+ As per the Du Pont analysis, Return on Equity of 8.1% is lower than sector average of 8.1%. This is computed as net profit margin of 21.2% times asset turnover [sales/assets] of 0.03 times leverage factor [total assets/shareholders' equity] of 14.2.

2.2 Technicals:

+ The price decreased 1.6% in the last month.

+ Compared with the TA-25 Index which fell 1.3% for the month, this represented a relative price decrease for Israel Discount Bank stock of 0.3% for the month.

2.3 Overbought/Bearish/Resistance Signals:

+ The stock is overbought according to the Williams % R indicator of -1.1, suggesting the price is close to its 14-day high of NIS10.29.

2.4 Low Performance Indicator:

DescriptionValueRank In Market
Return on Assets [ROA] %0.6In Bottom Quartile

SECTION 3 PRICE VOLUME DYNAMICS

3.1 Momentum:

+ Volume: there were 2,270,000 shares worth NIS23.3 million (US$6.6 million) traded today. In the past week, volume was 0.7 times average and the shares were up 3.7%. The volume was 0.6 times the average daily trading volume of 3.8 million shares.

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 DSCT would have produced a return of 20.2%.

DSCTClose (NIS)Annual Return %
Apr 1710.2820.2
1 Yr ago8.5536.4
2 Yrs ago6.27(6.1)
3 Yrs ago6.684.7
4 Yrs ago6.383.9

Close 5 years ago NIS6.14

3.3 Beta:

+ Beta: the Beta of Israel Discount Bank stock is 0.6. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.

3.4 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 65.6% (or a turnover period of 1 year 6 months). This average length of ownership of the stock at 0.5 times the average holding period of 3 years 55 days 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.

SECTION 4 RANKING

4.1 Global Rank [out of 47,651 stocks] and Rank in the Asia Region [out of 22,768 stocks]

DescriptionValueGlobal RankIn Asia Region
MCap (US$)3.4B3,7481,417
Total Assets (US$)58.5B797227
Revenue (US$)2.1B4,3271,701
Net Profit (US$)213.8M3,2581,128
Return on Equity %5.620,34111,402
Price to Book0.99,2085,410
PV$1000 (1Year) US$*1,24512,8496,598
US$* Change (1Year) %21.813,0426,266

* 1 year ago USD 1 = NIS 3.66

Apr 17, 2018: USD 1 equals NIS 3.54

4.2 Independent Ratings

+ Brand Finance 500:

Israel Discount Bank Ltd. was ranked 233 in the Brand Finance list of the world's 500 Valuable Banking brands by brand value in 2015; a deterioration over a year from rank 226 in 2014. Brand Finance valued the brand at US$531 million.

+ Forbes 2000:

It is the 1692nd largest by revenue in the Forbes Global 2000.

+ BSS/News Bites:

It is placed 88/336 in BSS News Bites' ranking of Israel performers in the past year, a percentile ranking of 74.

+ 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 311,734 shares worth $US923,963 or 0.01% by value of the ETF's portfolio [Ranked 2300 out of 7517 by value and 7 out of 56 for Israel].

SECTION 5 ISRAEL DISCOUNT BANK FINANCIALS

5.1 Financials Summary

Year endedDec 2017Dec 2016Dec 2015
Sales (USD B)1.81.62.1
Pretax (USD M)583.9484.3386.2
Net (USD M)356255.9212.1
EPS (NIS)1.080.840.71

Net profit was up 39.1% from US$255.9 million in 2016 to US$356 million in 2017. Earnings Per Share (EPS) was up 28.6% from 84.0 agorot to NIS1.08.

5.2 Annual Report for the year ended December 31, 2017 (year-on-year comparisons with previous corresponding period)-

Favourable Changes:

+ Net profit up 39.1% from NIS905.0m ($US235.4m) to NIS1.3b ($US363.2m)

+ EPS up 28.6% from NIS0.84 (US21.85c) to NIS1.08 (US31.16c).

+ EBIT to total assets up from 3.6% to 3.9%.

+ Interest revenue to Sales up from 66.7% to 69.5%.

+ Profit before tax to Sales up from 30.3% to 33.2%.

+ Debt to Equity down 26.5% from 0.8 to 0.6.

+ Retained earnings to total assets up from 4.7% to 5.2%.

+ Current Debtors to Total Assets up from 64.1% to 67.2%.

+ Fixed Assets to Total Assets up from 1% to 1.1%.

Unfavourable Changes:

+ Operating Cash Flow is negative.

+ Other non-current assets to Total Assets down from 22.7% to 19.6%.

+ Total Liabilities to EBITDA of 23.5 compares unfavourably with the Joseph Piotroski benchmark of <5. However, it has improved by 9.6% from the previous year's ratio of 26.0.

Note:

+ EBIT Margin steady at 140.4%.

+ Interest cover steady at 1.3.

+ Tax expenses to Sales down from 13.1% to 12%.

+ Cash to Total Assets steady at 12%.

+ Net tangible assets per share steady at NIS13.26 ($US3.8).

SECTION 6 ISRAEL DISCOUNT BANK PROFILE

6.1 Activities

Israel Discount Bank is a banking and financial services group in Israel with a presence in many other countries.

6.2 Industry & Sector

Classification LevelName of Sector
Economic SectorFinancials
Business SectorBanking & Investment Services
Industry GroupBanking Services
IndustryBanks

6.3 Top Management

The chairman is Joseph Bachar.

6.4 Issued Capital

Based on 1,164,016,993 issued shares the market capitalisation is NIS12 billion (US$3.4 billion).

Contact: 972-3-5145582

Physical Address: 23 Yehuda Halevi Street Tel Aviv, 65136 Israel

State/Province/Country: Israel

Country of Incorporation: Y

Exchange: Tel Aviv Stock Exchange

ISIN: IL0006912120

TV:DSCT; TLV:DSCT; TA:DSCT; TA:DSCT; IT:DSCT; DSCT.TA

PermID: 4295875063

RIC: DSCT.TA

Israel Discount Bank Ltd

Source: www.BuySellSignals.com