Monday January 18, 2021 18 January 2021

NEWS BITES - BRIC

Banco Bradesco SA (SA:BBDC4), Brazil's largest Bank by market cap, is currently the 4th lowest price earnings preference stock in the Bovespa Index of 73 stocks.

The price earnings ratio of 11.8 divided by annual growth in EPS (FY2019 vs FY2018) of 26.4% corresponds to an attractive P/E/G of 0.45 times; being less than the value benchmark of 1.0.

The earnings yield of 8.4% is 1.1 times the 10-year bond yield of 7.5%.

The value of R$1,000 invested one year ago is R$899 [vs R$1,029 for the Bovespa Index], including a capital loss of R$126 and dividend reinvested of R$24. The total return to shareholders for 1 year is -10.2%.

The preference stock has decreased 1.0 centavos (0.04%) from its previous trading session to close at R$26.82. Compared with the Bovespa Index which fell 462.4 points (0.4%) in the day, the relative price increase was 0.3%. Today the preference stock traded between its four-day high of R$27.36 and five-day low of R$26.61.

Banco Bradesco Preference Shares Stock Dashboard (traded in BRL)

CurrencyUSD 1 = BRL 5.29 Dividend Yield2.6%
Jan 18 closeBRL26.82SectorBank
Ave Daily Volume40,941,500 sharesShares Outstanding4,435,106,111
52-Week Range (In BRL)15.36 - 31.46Market CapBRL118.9 billion [$22.5 billion]
% Held by Top 3 Shareholders36.6EPS Growth (FY2019 vs FY2018)26.4%
P/E11.8

BBD ADR Dashboard (traded in $)

Home ExchangeBrazilRatio1 ADR equals 1 ordinary share
CodeBBDTypeSponsored
ISINUS0594603039Jan 15 close$5.04
CUSIP059460303Ave Daily Volume22,756,789 ADRs
*No. Held by Institutions721,576,63152-Week Range (In USD)2.62 - 7.51
% of shares outstanding16.2%

INDEX

SECTION 1 Recent News

SECTION 2 Corporate Profile

SECTION 3 Top shareholders

SECTION 4 Today's Bearish Signals

SECTION 5 Ongoing Bearish Parameters

SECTION 6 Today's Bullish Signals

SECTION 7 Ongoing Bullish Parameters

SECTION 8 Bank Metrics

SECTION 9 News Archives (Feb 2017 - Oct 2020)

SECTION 10 Currency Synopsis: Brazilian Real (BRL)

SECTION 11 Historical Perspective

SECTION 12 Macroeconomic Indicators

SECTION 13 Credit Rating Summary

Glossary

DATA DOWNLOAD CENTER

BBDC4: EXCEL TABLES ARE AVAILABLE TO EXPORT DATA:

+ PRICE VOLUME - 5-YEAR HISTORY

+ PEER COMPARISON - STOCK IN BANK SECTOR AND STOCK IN INDICES

BBDC4: LINKS IN HTML TO FURTHER INFORMATION:

+ NEWS ARCHIVES - BBDC4 PAST 3 YEARS IN HTML:

+ PRICE VOLUME CHARTS IN HTML

+ USD vs BRL EXCHANGE RATE CHARTS IN HTML

SECTION 1 Recent News

1.1 FY 2020

Banco Bradesco Preference Shares sinks 16% in FY 2020

Banco Bradesco SA (SA:BBDC4), Brazil's largest Bank by market cap, has sunk R$5.22 (or 16%) in FY 2020 to close at R$27.32 on Wednesday, December 30. Compared with the Bovespa Index which has risen 2.7% in FY 2020, this is a relative price change of -18.7%.

Average daily volume of 39.6 million preference shares in FY 2020 was 2.6 times the average daily volume in FY 2019.

1.2 Dividends

January 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, January 05, 2021 and the record date is Monday, January 04, 2021 and it is payable on Monday, February 01.

January 04: Banco Bradesco Preference Shares announces dividend

Banco Bradesco Preference Shares today announced a cash dividend of 41.53 centavos per share. The ex-dividend date is Tuesday, December 29, 2020 and the record date is Monday, December 28, 2020 and it is payable on Thursday, January 07.

December 14 2020: 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 Wednesday, December 02 and the record date is Tuesday, December 01, 2020 and it is payable on Monday, January 04, 2021.

November 09 2020: 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 Wednesday, November 04, 2020 and the record date is Tuesday, November 03, 2020 and it is payable on Tuesday, December 01.

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
Business SectorBanking & Investment Services
Industry GroupBanking Services
IndustryBanks
Economic SectorFinancials

SECTION 3 Top shareholders

Top 3 shareholders

Name of the Share Holder% of Capital
Cidade de Deus Cia Cial Participacoes22.8
Fundacao Bradesco8.5
Ncf Participacoes S.A.5.3

% held by Top 3 Shareholders 36.6%

SECTION 4 Today's Bearish Signals

4.1 Momentum Down 2.2% Past Week

Banco Bradesco Preference Shares underperformed the Bovespa Index in 3 out of 5 days. The price ranged between a low of R$26.68 on Wednesday, Jan 13 and a high of R$27.55 on Thursday, Jan 14.

DayBanco Bradesco Preference SharesClose price [BRL]Price change %Relative change % *Comment
FridayOffers 4th lowest Price Earnings in Bovespa Index, after price drop26.83-2.6-1.2Steepest Fall
ThursdayAdds R$4 billion ($703 million) (3.3%) in MCap, top heavyweight rise in Bank sector27.553.31.8Week-high of 27.55; Top Rise; VI*=1.3
WednesdayOffers 4th lowest Price Earnings in Bovespa Index, after price drop26.68-1.8-0.2VI*=1.1
TuesdayIncreases 1.3%27.171.30.3Price/MAP50 above 1 and rising
MondayOffers 3rd lowest Price Earnings in Bovespa Index, after price drop26.83-2.2-0.2Price/MAP50 above 1 and rising

* Relative change is price change of stock with respect to Benchmark Index, Bovespa Index.

[Volume Index (VI); 1 is average]

4.2 Rank in the bottom 1% by Relative Valuation in the Brazilian market

DescriptionValueRank
EV/EBITDA0.1In Bottom 1%

4.3 Overvaluation

Price/Earnings of 11.8 > sector avg of 5.3:

- Price/Earnings of 11.8 versus sector average of 5.3.

4.4 Other Bearish Signals

- Return on Equity of 15.6% versus sector average of 16.7%.

SECTION 5 Ongoing Bearish Parameters

5.1 Present Value of R$1000 Invested in the Past Year; The Worst Period with PVR$1000 < 900

PVR$1,0001 yr ago
BBDC4.SAR$899
Bank sectorR$859
Bovespa IndexR$1,029

5.2 Past year: price fall of 12.6%

1-Year price change of -12.6% for Banco Bradesco Preference Shares underperformed the change of 2.9% in the Bovespa Index for a relative price change of -15.4%.

Price Change %Year
Banco Bradesco Preference Shares-12.6
Bank sector-14.1
Bovespa Index2.9

5.3 Moving Annual Return of -10.3% in the past year:

Moving Annual Return was -10.3% in the past year. Based on a dynamic start date of 5 years ago, the real rate of return has averaged 38.5%

BBDC4Close (BRL)Dividends (BRL)Capital Gain / (Loss) %% YieldAnnual Return %
Jan 1826.820.7(12.6)2.3(10.3)
1 Yr ago30.681.835.56.311.8
2 Yrs ago29.060.8732.8436.8
3 Yrs ago21.890.8631.95.237.1
4 Yrs ago16.590.83106.810.3117.1

Close 5 years ago R$8.02

5.4 Annualised Period-based Total Shareholder Returns [TSR %]: The Worst Period with TSR < -10.1%

TSR %1 yr
BBDC4.SA-10.2

5.5 Decrease in Institutional Ownership down from 18.0% to 16.3% (ADRs)

As at September 30, 2020 Institutions held 16.3% of total ADRs on issue; a decrease from 16.4% as at June 30, 2020 and 18.0% as at September 30, 2019.

Quarter-endSeptember 30, 2019June 30, 2020September 30, 2020
Holdings (%)18.016.416.3

5.6 Satisfies 4 out of 9 criteria of Joseph Piotroski [pass mark 5]:

- Positive net income.

- Return on Assets improvement [from 1.3% to 1.5%].

- Improvement in current ratio from 32.1 to 33.6.

- Total shares on issue unchanged.

SECTION 6 Today's Bullish Signals

6.1 Uptrend

Beta > 1 combined with price rise. The Beta of the preference stock is 1.1.

Price/Moving Average Price of 1.24 and positive MACD:

- The Price/MAP 200 of 1.24 for Banco Bradesco Preference Shares is higher than the Price/MAP 200 for the Bovespa Index of 1.0.

- The price to 200-day MAP ratio is 1.24, a bullish indicator. In the past 200 days this ratio has exceeded 1.24, 22 times suggesting further upside. The preference stock is trading above both its MAPs and the 50-day MAP of R$25.35 is higher than the 200-day MAP of R$21.54, a bullish indicator. The 200-day MAP has increased to R$21.54. An increase is another bullish indicator.

- The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 26.99 minus the 26-day EMA of 26.53 is positive, suggesting a bullish signal.

6.2 Undervaluation

Price/Earnings:

Banco Bradesco Preference Shares stock is trading at the thirteenth lowest P/E multiple in the Bovespa Index.

Earnings Yield of 8.4% > Brazilian ave of 7.9% > Bond Yield of 7.5%:

- Earnings yield of 8.4% is greater than the Brazilian average earning yield of 7.9%.

- The earnings yield of 8.4% is 1.1 times the 10-year bond yield of 7.5%.

(All figures in %)

Earnings Yield8.4
Brazilian avg7.9
Dividend Yield2.6
Bond Yield7.5

SECTION 7 Ongoing Bullish Parameters

7.1 Present Value of R$1000 Invested in the Past [3 Mo, 3 Yrs]; The Best Periods with PVR$1000 > 1,365

PVR$1,0003 mo ago3 yrs ago
BBDC4.SAR$1,366R$1,387
Bank sectorR$1,261R$1,000
Bovespa IndexR$1,241R$1,496

7.2 Past quarter: price rise of 34.2%

3-Month price change of 34.2% for Banco Bradesco Preference Shares outperformed the change of 20.8% in the Bovespa Index for a relative price change of 13.4%.

Price Change %Quarter
Banco Bradesco Preference Shares34.2
Bank sector26.1
Bovespa Index20.8

7.3 MCap: 5-Year Increase of R$75 billion [$14 billion]

In the past 5 years Market Capitalization has increased by R$75.3 billion (173%) from R$43.6 billion to R$118.9 billion. Based on a dynamic start date of 5 years ago, there have been declines in MCap in 2 out of 5 years.

PriceMCap (BRL B)MCap ($ B)
LastR$26.82118.922.5
1 Year agoR$30.68139.833.4
2 Years agoR$29.06140.237.8
3 Years agoR$21.89109.234.1
4 Years agoR$16.598627
5 Years agoR$8.0243.610.8

7.4 Annualised Period-based Total Shareholder Returns [TSR %]: The Best Periods with TSR > 11.3%

TSR %3 yrs5 yrs10 yrs
BBDC4.SA11.433.113.5

7.5 P/E/G < 1

The price earnings ratio of 11.8 divided by trailing twelve months eps growth of 26.4% corresponds to an attractive P/E/G of 0.5 times; being less than the value benchmark of 1.0.

EPS Growth (%)26.4
P/E/G0.45
P/E11.85

7.6 Increased Volume, up 331% in 5 years

In the past five years, Average Daily Volume of Trading (ADVT) has increased 330.8% to 40.9 million preference shares.

Avg. Daily Volume Traded 12 months ended Jan 18, million preference shares

YearADVT
202140.9
202015.8
201913.2
20189.3
20179.5

7.7 Increased VWAP, up 64% in 5 years

In the past five years Volume Weighted Average Price (VWAP) has increased by 63.5% to R$21.80. .

Past five years, 12 months ended Jan 18 (BRL)

YearHigh PriceVWAPLow Price
202131.2821.815.36
202033.6529.9526.44
201929.9222.2616.67
201822.7418.5515.08
201717.7713.337.86

7.8 Increased preference share turnover, up 326% in 5 years

In the past five years, average daily preference share turnover has increased 325.9% to R$889.1 million ($168 million). This suggests increased liquidity.

Past five years, 12 months ended Jan 18 (BRL million)

YearAverage Daily Turnover
2021889.1
2020529.1
2019384.4
2018252.7
2017208.7

7.9 Satisfies one criteria of Benjamin Graham

- The P/E of 11.8 multiplied by the P/NTA of 1 is 11.6. Being less than the Benjamin Graham benchmark of 22.5 the preference stock appears undervalued.

SECTION 8 Bank Metrics

8.1 Bank Metrics (FY2019)

DescriptionR$ B FY2019R$ B FY2018]Change
Interest Income25.3 23.8 Up 6.3%
Net Interest Income65.8 66.8 Down 1.5%

Favourable Changes:

- Interest Income up 6.3% from R$23.8b to R$25.3b

Unfavourable Changes:

- Net Interest Income down 1.5% from R$66.8b to R$65.8b

SECTION 9 News Archives (Feb 2017 - Oct 2020)

HTML PAGES ARE AVAILABLE TO EXPORT AS FOLLOWS:

http://www.buysellsignals.net/BuySellSignals/report/Brazil/Stock/Daily/Html/BBDC4_Corporate_Wire.html

SECTION 10 Currency Synopsis: Brazilian Real (BRL)

10.1 % Change of USD vs Currency Basket Period-Based

In the past year the US Dollar rose 26.7% against the Brazilian Real; in the past three years the US Dollar rose 65.3% against the Brazilian Real.

LastCountry1-day %1-week %1-Year %3-Yrs %
USD1=5.3BRLBrazil2.0-2.326.765.3
USD1=6.481CNYChina0.10.1-5.90.4
USD1=1.298AUDAustralia0.90.7-10.42.7
USD1=1.33SGDSingapore0.40.4-1.20.5
USD1=0.736GBPUnited Kingdom0.8-0.2-4.11.1
USD1=1.401NZDNew Zealand1.11.4-7.41.6
USD1=0.891CHFSwitzerland0.40.7-7.5-7.9
USD1=8.397SEKSweden1.02.1-11.24.3
USD1=0.828EUREuropean Union0.61.2-7.71.0
USD1=7.753HKDHong Kong---0.2-0.9
USD1=1,103.69KRWSouth Korea0.51.0-4.74.4
USD1=1.273CADCanada0.70.3-2.42.2
USD1=1.0USDUnited States Of America0.0---
USD1=19.806MXNMexico0.4-0.95.34.0
USD1=103.877JPYJapan0.1-0.1-5.5-6.4
USD1=8.57NOKNorway1.11.7-3.38.2

10.2 % Change of BRL vs Currency Basket Period-Based

In the past year the Brazilian Real fell 21.8% against the Hong Kong Dollar; in the past three years the Brazilian Real fell 39.7% against the Hong Kong Dollar.

LastCountry1-day %1-week %1-Year %3-Yrs %
BRL1=1.472HKDHong Kong-1.32.4-21.8-39.7
BRL1=209.241KRWSouth Korea-0.93.3-25.3-36.6
BRL1=0.241CADCanada-0.72.8-22.5-37.9
BRL1=0.19USDUnited States Of America-1.42.5-20.6-39.2
BRL1=3.764MXNMexico-0.81.7-17.3-36.5
BRL1=1.23CNYChina-1.32.5-25.5-39.0
BRL1=19.718JPYJapan-1.32.4-25.1-43.1
BRL1=1.619NOKNorway-0.74.0-23.7-34.5
BRL1=0.246AUDAustralia-0.53.2-28.9-37.6
BRL1=0.252SGDSingapore-1.02.9-22.6-39.0
BRL1=0.14GBPUnited Kingdom-0.72.4-24.1-38.6
BRL1=0.266NZDNew Zealand-0.43.9-27.5-38.3
BRL1=0.169CHFSwitzerland-1.22.9-26.9-44.1
BRL1=0.157EUREuropean Union-0.93.7-27.0-38.6
BRL1=1.59SEKSweden-0.64.6-30.6-36.7

SECTION 11 Historical Perspective

Year-on-Year Comparison USD/BRL (Trailing year - ended 15 Jan)

In the past 5 years, the USD/BRL has jumped 30.9% from 4.05 to 5.3, an average compound annual appreciation of the USD by 5.5%.

202120202019201820172016
Close5.34.183.723.223.224.05
% Change26.712.515.6-0.1-20.571.2
Range3.13 - 4.173.86 - 4.06

USD1 buys BRL 5.3 today: Appreciation of USD from 0.97 v/s BRL twenty five years ago

Last5 Yrs ago10 Yrs ago15 Yrs ago20 Yrs ago25 Yrs ago
USD/BRL5.34.011.722.271.950.97

Present Value of R$1000 Invested in USD 20 years ago is R$2,714

PVR$1,0005 yrs ago10 yrs ago20 yrs ago
USD/BRLR$1,322R$3,089R$2,714

SECTION 12 Macroeconomic Indicators

INDICATORUNITED STATES[USD]BRAZIL[BRL]
GDP (Billion USD)21,4281,840
GDP growth yoy (%)-2.8-3.9
Interest rate (%)0.252.0
Inflation rate (%)1.24.31
Unemployment rate (%)6.714.3
Budget / (Deficit) to GDP ratio (%)(4.6)(5.9)
Current account / (Deficit) to GDP ratio (%)(2.3)(2.7)
Debt to GDP ratio (%)106.975.79

SECTION 13 Credit Rating Summary

Brazil:

Rating AgencyLong TermForeign CurrencyDescription
Moody'sBa2
FitchBB
S&PBB-Considered highest speculative grade by market participants. The minus (-) sign shows relative standing within the major rating category.
FITCHBBBGood credit quality: 'BBB' ratings indicate that expectations of default risk are currently low.
DAGONGBBB+Medium Credit Quality: "BBB" ratings indicate that expectations of default risk are currently low and it has BBB medium default risk. In normal conditions, the capacity for payment of financial commitments is considered adequate, whereas under adverse business or economic conditions risks of default are more likely to exist under this scale. The plus (+) sign shows relative standing within the major rating category.

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 (%)

Current Ratio: Current Assets/Current Liabiliites (times)

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

Earnings Yield: Earnings 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

Price/Earnings: Share Price/Earnings Per Share (times)

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

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.

Created by www.buysellsignals.com