Banco Bradesco Preference Shares (BBDC4:R$21.35) keeps rising, up 3.1% in 3 days 03 July 2020

NEWS BITES - BRIC

Dateline: Friday July 03, 2020

Banco Bradesco SA (SA:BBDC4), Brazil's 2nd largest Bank by market cap, extended its gains on Friday, rising an additional 14.0 centavos (0.7%) to close at R$21.35. The preference shares have lifted 65.0 centavos (3.1%) over the past three trading days, compared with the Bovespa Index which rose 1,701.3 points (1.8%) in the three days for a relative price increase of 1.4%. The cumulative volume in the 3 days was at about its average 3-day volume of 28.1 million preference shares. There were 11,450,000 preference shares worth R$244.5 million (US$45.6 million) traded today.

Stock Summary (traded in BRL)

Currency1 USD = 5.36 BRLDividend Yield8%
Jul 03 closeR$21.35SectorBank
Ave Daily Volume28,138,756 sharesShares Outstanding4,435,106,111
52-Week Range15.68 - 34.36Market CapR$94.7 billion [USD17.7 billion]

ADR Summary (traded in USD)

Home ExchangeBrazil% of shares outstanding17.1%
CodeBBDRatio1 ADR equals 1 ordinary share
ISINUS0594603039TypeSponsored
CUSIP059460303Jul 02 closeUSD3.92
*No. Held by Institutions760,399,28352-Week Range2.67 - 9.06

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Financials in xls

News Archives Past 3 years in HTML

INDEX

SECTION 1 News In The Past Quarter

SECTION 2 Corporate Profile

SECTION 3 Today's Bullish Signals

SECTION 4 Ongoing Bullish Parameters

SECTION 5 Today's Bearish Signals

SECTION 6 Ongoing Bearish Parameters

SECTION 7 Bank Metrics

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SECTION 8 Dividend

SECTION 9 News Archives (Aug 2018 - Mar 2020)

Glossary

SECTION 1 News In The Past Quarter

1.1 Dividends

June 08: 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, June 02, 2020 and the record date is Monday, June 01, 2020 and it is payable on Wednesday, July 01.

May 11: 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, May 05, 2020 and the record date is Monday, May 04, 2020 and it is payable on Monday, June 01.

April 06: 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, April 02, 2020 and the record date is Wednesday, April 01, 2020 and it is payable on Monday, May 04.

1.2 Share Capital

April 13: Banco Bradesco Preference Shares announces Bonus issue

Banco Bradesco Preference Shares has announced a 10 for 1 bonus issue of shares, on Tuesday, April 14.

SECTION 2 Corporate Profile

2.1 Activities

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.

2.2 Contact Details

Websitehttp://www.bradesco.com.br/
Physical AddressCidade de Deus s/n Vila Yara Osasco, SP 06029-900 Brazil
Phone(11)3684 3749
Fax(11)3684 2714
Email4000.mvargas@bradesco.com.br

2.3 Industry & Sector

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

SECTION 3 Today's Bullish Signals

3.1 Rank in the top 5% by Relative Valuation in the Brazilian market

DescriptionValueRank
Dividend Yield %8%In Top 5%

3.2 Rank in the top 23% by Price Performance in the Brazilian market

DescriptionValueRank
1-week Price Change %3.2In Top 23%

3.3 Uptrend

Beta > 1 combined with price rise. The Beta of the preference stock is 1.2.

Positive MACD:

- The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 21.27 minus the 26-day EMA of 21.04 is positive, suggesting a bullish signal. Both the 12-day EMA as well as the 26-day EMA are rising, another bullish signal.

3.4 Undervaluation

Dividend Yield:

Banco Bradesco Preference Shares stock is the third highest dividend yielding stock in the Bovespa Index.

Dividend Yield > Bond Yield of 6.6%:

The dividend yield of 7.98% is 1.21 times the triple-A bond yield of 6.6%. The times factor of 1.21 is above the benchmark factor of 0.67 times set by Benjamin Graham.

(All figures in %)

Dividend Yield7.98
Bond Yield6.6
Spread1.38

Dividend Yield of 8% > Index avg of 3.2%:

- The relative yield of the preference stock, defined by its yield of 8%, divided by average yield of dividend yielding preference stocks in the Bovespa Index of 3.2% is 249.4%. This suggests the preference stock is undervalued in dividend yield terms.

SECTION 4 Ongoing Bullish Parameters

4.1 Annualised Period-based Total Shareholder Returns [TSR %]: The Best Periods with TSR > 12.8%

TSR %3 yrs5 yrs10 yrs
BBDC4.SA12.916.312.9

4.2 Present Value of R$1000 Invested in the Past [3 Mo, 3 Yrs]; The Best Periods with PVR$1000 > 1,226

PVR$1,0003 mo ago3 yrs ago
BBDC4.SAR$1,227R$1,446
Bank sectorR$1,191R$1,054
Bovespa IndexR$1,397R$1,529

4.3 MCap: 5-Year Increase of R$22 billion [USD4 billion]

In the past 5 years Market Capitalization has increased by R$22.1 billion (30%) from R$72.6 billion to R$94.7 billion. Based on a dynamic start date of 5 years ago, there have been declines in MCap in 3 out of 5 years.

PriceMCap (BRL B)MCap (US$ B)
LastR$21.3594.717.7
1 Year agoR$33.04154.840.3
2 Years agoR$18.4489.223
3 Years agoR$16.988626
4 Years agoR$13.5671.422
5 Years agoR$12.9772.623.3

4.4 Past 5 years Annual Net Profit growth:

Average Annual Compounded rate of growth in Net Profit for the 5 years was 9.0%. There have been three rises and two declines in the past 5 years.

FYNet Profit (B R$)Growth %
201819.0830.2
201714.66-2.8
201615.08-16.8
201518.1318.4
201415.3123.5

4.5 Increased Volume, up 154% in 5 years

In the past five years, Average Daily Volume of Trading (ADVT) has increased 153.5% to 28.1 million preference shares.

Avg. Daily Volume Traded 12 months ended Jul 03, million preference shares

YearADVT
202028.1
201913.9
201810.7
20178.8
201611.1

4.6 Increased VWAP, up 125% in 5 years

In the past five years Volume Weighted Average Price (VWAP) has increased by 125.2% to R$24.66. .

Past five years, 12 months ended Jul 03 (BRL)

YearHigh PriceVWAPLow Price
202034.3624.6615.68
201933.0926.4718.9
201826.2421.3916.67
201719.416.4813.2
201614.5410.958.02

4.7 Increased preference share turnover, up 233% in 5 years

In the past five years, average daily preference share turnover has increased 233.1% to R$686.4 million (US$128.1 million). This suggests increased liquidity.

Past five years, 12 months ended Jul 03 (BRL million)

YearAverage Daily Turnover
2020686.4
2019453.4
2018317.5
2017224.3
2016206.1

SECTION 5 Today's Bearish Signals

5.1 Momentum Down 0.7% Past Week

The price ranged between a low of 20.69 on Friday, Jun 26 and a high of 21.41 on Monday, Jun 29.

DayBanco Bradesco Preference SharesClose price [BRL]Price change %Relative change %Comment
ThursdayOffers 3rd highest dividend yield21.210.20.2VI*=1.3
WednesdayInches higher, resistance at 12-day EMA21.162.20.8VI*=1.2
TuesdayOffers 3rd highest dividend yield20.7-3.3-2.6Steepest Fall; VI*=1.6
MondayLifts 3.5%, 2 days' volume in a day21.413.51.3Week-high of 21.41 Top Rise; VI*=1.7
FridayOffers 3rd highest dividend yield20.69-3.1-0.7VI*=1.6

[Volume Index (VI); 1 is average]

5.2 Rank in the bottom 15% by Price Performance in the Brazilian market

DescriptionValueRank
Price/MAP2000.82In Bottom 15%

5.3 Downtrend

Price/Moving Average Price of 0.82:

- The price to 200-day MAP ratio is 0.82, a bearish indicator. In the past 200 days this ratio has been under 0.82, 68 times suggesting further downside. The 50-day MAP of R$19.92 is lower than the 200-day MAP of R$26.04, another bearish indicator.

Trailing Relative Strength (6 months) at 14 percentile:

- The preference stock has a 6-month relative strength of 14 in the Brazilian market of 219 stocks and 90 preference stocks indicating it is trailing 86% of the market.

5.4 Other Bearish Signals

- Return on Capital Employed of 1.9% versus sector average of 3.4%.

- Net profit margin has averaged 12.6% in the last 3 years. This is lower than the sector average of 12.8% and suggests a low margin of safety.

- As per the Du Pont analysis, Return on Equity of 15.8% is lower than sector average of 16.0%. This is computed as net profit margin of 15.2% times asset turnover [sales/assets] of 0.06 times leverage factor [total assets/shareholders' equity] of 10.6.

SECTION 6 Ongoing Bearish Parameters

6.1 Annualised Period-based Total Shareholder Returns [TSR %]: The Worst Period with TSR < -31.5%

TSR %1 yr
BBDC4.SA-31.6

6.2 Present Value of R$1000 Invested in the Past Year; The Worst Period with PVR$1000 < 685

PVR$1,0001 yr ago
BBDC4.SAR$684
Bank sectorR$693
Bovespa IndexR$948

6.3 Past year: price fall of 35.4%

1-Year price change of -35.4% for Banco Bradesco Preference Shares underperformed the change of -3.8% in the Bovespa Index for a relative price change of -31.6%.

Price Change %Year
Banco Bradesco Preference Shares-35.4
Bank sector-30.7
Bovespa Index-3.8

6.4 Moving Annual Return of -30.2% in the past year:

Moving Annual Return was -30.2% in the past year. Based on a dynamic start date of 5 years ago, the real rate of return has averaged 21.9%

BBDC4Close (BRL)Dividends (BRL)Capital Gain / (Loss) %% YieldAnnual Return %
Jul 0321.351.7(35.4)5.2(30.2)
1 Yr ago33.040.9179.24.984.1
2 Yrs ago18.440.898.65.213.8
3 Yrs ago16.980.8625.26.331.6
4 Yrs ago13.560.734.65.610.2

Close 5 years ago R$12.97

6.5 Decrease in Institutional Ownership down from 18.5% to 17.1% (ADRs)

As at March 31, 2020 Institutions held 17.1% of total ADRs on issue; a decrease from 18.5% as at December 31, 2019 and 18.5% as at March 31, 2019.

Quarter-endMarch 31, 2019December 31, 2019March 31, 2020
Holdings (%)18.518.517.1

6.6 Satisfies 3 out of 9 criteria of Joseph Piotroski [pass mark 5]:

- Positive net income.

- Positive operating cashflow.

- Return on Assets improvement [from 1.2% to 1.5%].

SECTION 7 Bank Metrics

7.1 Bank Metrics (FY2018)

DescriptionR$ B FY2018R$ B FY2017]Change
Bank Revenue72.6 76.3 Down 4.9%

Unfavourable Changes:

- Bank Revenue down 4.9% from R$76.3b to R$72.6b

Glossary

ADVT: Average Daily Volume of shares Traded

Annual Return: Dividends Paid In a 12-Month Period/Price at the Beginning of the Period + Capital Gain or Loss over 1 Year/Price 1 Year Ago (%)

Dividend Yield: Dividend Per Share/Share Price (%)

Income during the n years (3/2/1): Dividends received during the Period

Moving Average Price (n periods): Sum of Prices for each Period/Number of Periods

PV1000: Present value of 1000 invested 1 year/'n' years ago

Price Close/Moving Avg Price: Latest Price/Moving Average Price

Relative Price Change [RPC]: Relative price change is price change of stock with respect to Benchmark Index

Relative Strength (6 Months): Price close today/Price close 6 months ago, then ranked by percentile within the entire market.

Return on Assets: Net Profit/Total Assets (%)

Return on Equity (Shareholders' Funds): Net Profit/Net Assets (%)

TSR: Total Shareholder Returns is expressed as an annualized rate of return for shareholders after allowing for capital appreciation and dividend

Volume Weighted Average Price (VWAP): The Volume Weighted Average Price (VWAP) is the summation of turnover divided by total volume in the same period.

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