Luxottica Group drops to year low 28 February 2019

NEWS BITES - EUROPE

Luxottica Group (MI:LUX), Italy's largest Personal & household goods company by market cap, traded at its 336-day low of EUR49.0. Luxottica Group's stock price has decreased 34.0c (0.7%) from its last trading session of February 27 to close at EUR49.0. Compared with the FTSE MIB Index which rose 160.7 points (0.8%) in the day, the relative price change was -1.5%. The volume was 0.1 times the average daily trading volume of 527,490 shares. Its MCap is EUR23.8 billion (US$27 billion).

Highlights in today's Report:

SECTION 1 BEARISH SIGNALS

SECTION 2 BULLISH SIGNALS

SECTION 3 PRICE VOLUME DYNAMICS

SECTION 4 RELATED NEWS

SECTION 5 SUMMARY FINANCIALS

SECTION 6 PROFILE

SECTION 1 LUXOTTICA GROUP BEARISH SIGNALS

1.1 Technicals:

Downtrend: Luxottica Group continues significant downtrend

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 50.82 minus the 26-day EMA of 51.32 is negative 0.5 suggesting a bearish signal. Both EMA prices are falling, another bearish signal.

+ Falls to Rises: in the past month the number of falls outnumbered rises 12:6 or 2:1.

+ The 2.8% premium to 12-month low of EUR47.69 against the 17.7% discount to high of EUR59.54 suggests the stock continues to push for new lows.

+ The stock's relative price strength percentile is slipping at 31 for 6 months, 28 for 3 months and 14 for 1 month.

+ The stock has seen a fall of 16% in less than 5 months.

Low Performance Indicators and rank of Luxottica Group in the Italian market:

DescriptionLUX ValueRank In Market
Price Change %-0.7In Bottom Quartile
Price/MAP500.95In Bottom Quartile
Price to Sales2.6In Bottom Quartile

1.2 Fundamentals:

+ The relative yield of LUX, defined by its yield of 2.1%, divided by average yield of dividend yielding stocks in the FTSE MIB Index of 3.2% is 64.4%. This suggests Luxottica Group stock is overvalued in dividend yield terms.

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 2.4. Compared with the rest of the market the stock is overvalued and ranks in the bottom 8% of stocks by value of Q Ratio.

1.3 Overvaluation [compared with sector average]:

+ Price/Sales of 2.6 [2.1].

SECTION 2 LUXOTTICA GROUP BULLISH SIGNALS

2.1 Technicals:

+ The present value of EUR1,000 (PV1000) invested ten years ago in Luxottica Group is EUR6,287, including a capital gain of EUR4,612 and dividend reinvested of EUR676.

+ 10 years Multiplier in EUR = 6.287x

+ Compound Annual Growth Rate (CAGR) in EUR = 20.2%

Present Value of USD1,000 invested 10 years ago:

+ The present value of USD1,000 (PV1000) invested ten years ago in Luxottica Group is $US5,676, including a capital gain of $US4,066 and dividend reinvested of $US610.

+ 10 years ago EUR 1 equalled USD 1.26

+ 10 years Multiplier in USD = 5.676x

+ Compound Annual Growth Rate (CAGR) in USD = 19.0%

Feb 28, 2019: EUR 1 equals USD 1.14

2.2 Oversold/Bullish/Support Signals:

+ At EUR49.0 the price is below the lower Bollinger band support of EUR49.74, indicating an upside for it to return to the band.

+ The Relative Strength Index (RSI) of 4.0 has breached the oversold line of 30, suggesting the price decrease of 5.4% in the last 14 days is unusually high.

High Performance Indicators and rank of Luxottica Group in the Italian market:

DescriptionLUX ValueRank In Market
Today's Trading TurnoverEUR1.3 million (US$1.5 million)In Top 6%
Return on Assets [ROA] %10.4In Top Quartile
Volatility %1.2In Top Quartile

2.3 Fundamentals:

+ Total Liabilities/EBITDA of 3.4 is comfortably below the Joseph Piotroski benchmark of 5.

+ Net profit margin has averaged 9.9% in the last 3 years. This is better than the sector average of 1.5% and suggests a high margin of safety.

+ As per the Du Pont analysis, Return on Equity [ROE] of 17.9% is better than sector average of 11.2%. ROE is computed as net profit margin of 11.4% times asset turnover [sales/assets] of 0.91 times leverage factor [total assets/shareholders' equity] of 1.7.

2.4 Undervaluation [compared with sector average]:

+ Return on Equity 17.9% [11.2%].

+ Price/Earnings/Growth of 1 [2.5].

+ Return on Assets 10.4% [6.3%].

+ Return on Capital Employed 15.8% [11.3%].

+ Dividend yield of 2.1% [0.5%].

SECTION 3 LUXOTTICA GROUP PRICE VOLUME DYNAMICS

3.1 Present Value of EUR1000 invested in the past:

+ The present value of EUR1,000 (PV1000) invested one year ago in Luxottica Group is EUR1,032, comprising a capital gain of EUR12 and dividend reinvested of EUR20.

PV10001-week1-month1-year
LUX.MI9499401,032
FTSE MIB Index1,0221,068914

3.2 Aggregate Volumes and Prices:

[Volume Index or VI in brackets; 1 is average]

+ Borsa Italiana: LUX.MI 26,720 [VI of 0.1] volume 99.93% of aggregate. Price: EUR49.0.

+ Frankfurt: LUXA.FRA 20 [VI of 0.1] volume 0.07% of aggregate. Price: EUR50.76.

+ Aggregate volume: there were 26,740 shares of Luxottica Group worth EUR1.3 million traded today. The aggregate volume was 0.1 times average trading of 527,000 shares.

The turnover rate in the 12 months to date was 29.2% (or a turnover period of 3 years 5 months). This average length of ownership of the stock at 3.5 times the average holding period of 11 months for stocks in the FTSE MIB Index suggests a larger number of core investors, making a long-term investment safer.

3.3 Moving Annual Return (Past 5 years)

Based on a dynamic start date of 5 years ago, the real rate of return has averaged 9.3%. The Moving Annual Return has been positive in 4 of the last 5 years. An investment a year ago in LUX would have produced a return of 3.3%.

LUXClose (EUR)Dividends (EUR)Capital Gain / (Loss) %% YieldAnnual Return %
Feb 28491.011.22.13.3
1 Yr ago48.410.921.11.93.1
2 Yrs ago47.860.89(4.5)1.8(2.7)
3 Yrs ago50.091.44(1.7)2.81.1
4 Yrs ago50.950.6539.71.841.5

Close 5 years ago EUR36.46

3.4 Beta & Alpha:

+ Beta: the Beta of Luxottica Group stock is 0.3. 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 6.0. The actual return of 5.1% exceeded the expected return of -0.9%, reflecting outperformance.

3.5 The Past Five Years

+ Luxottica Group (MI:LUX), has gained EUR12.54 (or 34.4%) in the past five years to close at EUR49.0 today. Compared with the FTSE MIB Index which has risen 1.6% over the same period, this is a relative price increase of 32.8%.

SECTION 4 LUXOTTICA GROUP RELATED NEWS

4.1 Corporate Wires

Luxottica Group (LUX) issued 2 new Releases this week.

February 23: Luxottica brings its digital revolution to eyecare professionals everywhere

Luxottica Group S.p.A. (MTA: LUX), a leader in the design, production, distribution and sale of high-end, luxury and sports eyewear, will put a stake in the ground this week when it unveils its digital vision for optical practices and retail stores around the world, presenting a series of digital innovations at the global eyewear and eyecare show MIDO in Milan from 23 to 25 February, 2019.

To view the previous 3 months' Releases in full, click here

4.2 Other News

+ BSS/News Bites:

Luxottica Group is placed 89/294 in BSS News Bites' ranking of Italian performers in the past year, a percentile ranking of 70.

+ Vanguard Total World Stock ETF 7582:

The stock was one of 7582 global stocks selected by Vanguard Total World Stock ETF (VT) who sold 24,444 shares in the period Nov 30, 2018 to Dec 31, 2018 worth $US-1,265,674 at an estimated Volume Weighted Average Price (VWAP) of $US51.7785. As at Dec 31, 2018, the Vanguard Total World Stock ETF held 24,445 shares worth $US1,449,999 or 0.01% by value of the ETF's portfolio [Ranked 1581 out of 7582 by value and 18 out of 91 for Italy].

SECTION 5 LUXOTTICA GROUP SUMMARY FINANCIALS

5.1 Dividend History

+ Trailing 12 months dividend has improved from 65.0c in 2015 to EUR1.01 in 2019.

5.2 Financials Summary

Year endedDec 2017Dec 2016Dec 2015
Sales (USD B)10.410.311.6
Pretax (USD B)1.41.51.5
Net (USD)1.2B965.1M915M
EPS (EUR)2.171.771.67

+ Net profit was up 22.4% from US$965.1 million in 2016 to US$1.2 billion in 2017.

+ Earnings Per Share (EPS) was up 22.6% from EUR1.77 to EUR2.17.

SECTION 6 LUXOTTICA GROUP PROFILE

6.1 Activities

Luxottica Group is a leader in eyewear having a brand portfolio that includes Ray-Ban, Bvlgari, Burberry, Chanel, Dolce & Gabbana, Donna Karan, Polo Ralph Lauren, Prada, Versace, Vogue, Persol, Arnette and REVO.

6.2 Issued Capital

Based on 484,940,000 issued shares the market capitalisation is EUR23.8 billion (US$27 billion).

COMPANY IDENTIFIERS

Contact: +39 02 86334.1

Physical Address: Via Cantu, 2 Milano 20123 MI Italy

State/Province/Country: Italy

Exchange: Borsa Italiana

Economic Sector: Consumer Non-Cyclicals

Business Sector: Personal & Household Products & Services

ISIN: IT0001479374

MI:LUX; BIT:LUX; IM:LUX; LUX.MI

PermID: 4295875513

RIC: LUX.MI

Source: www.BuySellSignals.com