Israel Discount Bank (DSCT:NIS11.45) outperforms 84% of the market 02 July 2020

NEWS BITES - MIDDLE EAST & NORTH AFRICA

Dateline: Thursday July 02, 2020

Israel Discount Bank Ltd. (TASE:DSCT), Israel's 4th largest Bank by market cap, has climbed 45.0 agorot (4.1%) from its previous trading session to close at NIS11.45. Compared with the TA-25 Index which rose 27.4 points (2%) in the day, the relative price increase was 2.1%. Thursday's price rise was propped up by high volume of 2.0 times the average daily volume of 4 million shares. In the Israel market of 317 stocks traded today, Israel Discount Bank's stock has a 6-week relative price strength of 84 indicating it has outperformed 84% of the market. A price rise combined with a high relative strength is a bullish signal. There were 7,970,000 shares worth NIS91.3 million (US$24.4 million) traded today.

Bullish Turning Points

Price/Earnings of 8.9 close to historical low

The P/E of 8.9 is 0.3 times the highest average P/E of 33 in the last five years. This is a value criterion, according to Benjamin Graham who described as a value criterion "A P/E ratio down to less than four-tenth of the highest average P/E ratio the stock attained in the most recent five years".

Price/MAP50

The P/MAP [Price/Moving Average Price] was previously below 1 and falling. These were bearish indicators. Israel Discount Bank's stock is now trading above its 50 day MAP at NIS11.11, a bullish indicator.

Stock Summary (traded in NIS)

Currency1 USD = 3.74 NISDividend Yield1.5%
Jul 02 closeNIS11.45SectorBank
Ave Daily Volume3,995,372 sharesShares Outstanding1,160,000,000
52-Week Range8.23 - 16.31Market CapNIS13.3 billion [USD3.6 billion]
P/E8.9EPS Growth (FY2018 vs FY2017)18.3%

ADR Summary (traded in USD)

Home ExchangeIsraelTypeUnsponsored
CodeISDAYJul 01 closeUSD31.0
ISINUS4650744091Ave Daily Volume1,869 ADRs
CUSIP46507440952-Week Range22.40 - 46.81
Ratio1 ADR equals 10 ordinary shares

Click here to export Financials table in xls

INDEX

SECTION 1 Corporate Profile

SECTION 2 Today's Bullish Signals

SECTION 3 Ongoing Bullish Parameters

SECTION 4 Today's Bearish Signals

SECTION 5 Ongoing Bearish Parameters

Click here to view the following

SECTION 6 Tax & Dividend

SECTION 7 News Archives (Nov 2018 - Mar 2020)

Glossary

SECTION 1 Corporate Profile

1.1 Activities

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

1.2 Contact Details

Websitehttp://www.discountbank.net
Physical Address23 Yehuda Halevi Street Tel Aviv, 65136 Israel
Phone972-3-5145582
Fax972-3-5666486
EmailRUTH.MOSHKOVITZ@DISCOUNTBANK.CO.IL

1.3 Industry & Sector

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

SECTION 2 Today's Bullish Signals

2.1 Momentum Up 3.7% Past Week

The price ranged between a low of 10.5 on Tuesday, Jun 30 and a high of 11.09 on Thursday, Jun 25.

DayIsrael Discount BankClose price [NIS]Price change %Relative change %Comment
WednesdayClimbs 4.8% on rising relative strength11.04.81.9Top Rise; VI*=1.3
TuesdayStrengthens 3% in Q2/202010.5-2.1-2.7VI*=1.4
MondayRises 2.1% from 14-day low10.730.3-0.3Price rise on beating relative strength
SundayIn its biggest weekly loss in 2 months10.7-3.5-0.8Steepest Fall
ThursdayClimbs 4.5% on rising relative strength11.094.55.0VI*=2.1

[Volume Index (VI); 1 is average]

2.2 Rank in the top 23% by Relative Valuation in the Israel market

DescriptionValueRank
P/E * P/NTA6.75In Top 23%

2.3 Rank in the top 23% by Price Performance in the Israel market

DescriptionValueRank
1-month Price Change %5.8In Top 23%

2.4 Uptrend

Today's Volatility:

Today its volatility (highest price minus lowest price/lowest price) of 4.0% was 1.5 times the average daily volatility of 2.7%, up from 3.2% on Tuesday. A rise in the price on high volatility is a bullish signal.

Beta > 1 combined with price rise. The Beta of the stock is 1.0.

Past Quarter:

- The shares had their best quarter in a year since the quarter ended July 02, 2019.

2.5 Undervaluation

Price/Earnings:

Israel Discount Bank stock is trading at the fourth lowest P/E multiple in the TA-25 Index.

Price/Earnings of 8.9 < sector avg of 11.1:

- Price/Earnings of 8.9 versus sector average of 11.1 and market average of 41.0.

Earnings Yield of 11.3% > Israel ave of 2.4% > Bond Yield of 0.6%:

- Earnings yield of 11.3% is greater than the Israel average earning yield of 2.4%.

- The earnings yield of 11.3% is 17.6 times the 10-year bond yield of 0.6%.

(All figures in %)

Earnings Yield11.3
Israel avg2.4
Dividend Yield1.5
Bond Yield0.6

Dividend Yield > Bond Yield of 0.64%:

The dividend yield of 1.46% is 2.28 times the triple-A bond yield of 0.64%. The times factor of 2.28 is above the benchmark factor of 0.67 times set by Benjamin Graham.

(All figures in %)

Dividend Yield1.46
Bond Yield0.64
Spread0.82

SECTION 3 Ongoing Bullish Parameters

3.1 Annualised Period-based Total Shareholder Returns [TSR %]: The Best Periods with TSR > 6.6%

TSR %3 yrs5 yrs10 yrs
DSCT.TASE9.510.56.7

3.2 Present Value of NIS1000 Invested in the Past [3 Mo, 3 Yrs]; The Best Periods with PVNIS1000 > 1,124

PVNIS1,0003 mo ago3 yrs ago
DSCT.TASENIS1,125NIS1,316
Bank sectorNIS1,058NIS1,075
TA-25 IndexNIS1,113NIS980

3.3 The Best Periods [3 Mo, 3 Yrs] with Price Change % > 12.4

3-Year price change of 28% for Israel Discount Bank outperformed the change of -2.2% in the TA-25 index for a relative price change of 30.2%.

Price Change %Quarter3 Years
Israel Discount Bank12.528
Bank sector5.88.1
TA-25 index10.9-2.2

3.4 MCap: 5-Year Increase of NIS6 billion [USD1 billion]

In the past 5 years Market Capitalization has increased by NIS5.5 billion (71%) from NIS7.7 billion to NIS13.3 billion. Based on a dynamic start date of 5 years ago, there have been declines in MCap in 2 out of 5 years.

PriceMCap (NIS B)MCap (US$ M)
LastNIS11.4513.33,552.9
1 Year agoNIS14.5217.14,561.3
2 Years agoNIS10.4712.53,422.2
3 Years agoNIS8.9510.73,060.3
4 Years agoNIS6.4571,813.9
5 Years agoNIS7.157.72,050.4

3.5 EPS growth [FY2018 vs FY2017] of 18.3%:

There have been four rises and one decline in the past 5 years. Average Annual Compounded rate of growth in EPS for the 5 years was 9.2%.

FYEPSGrowth %
2018NIS1.2918.3
2017NIS1.0929.8
201684.0 agorot18.3
201571.0 agorot48.2
201447.92 agorot-42.2

3.6 P/E/G < 1

The price earnings ratio of 8.9 divided by trailing twelve months eps growth of 18.4% corresponds to an attractive P/E/G of 0.5 times; being less than the value benchmark of 1.0.

EPS Growth (%)18.35
P/E/G0.48
P/E8.88

3.7 Increased Volume, up 44% in 5 years

In the past five years, Average Daily Volume of Trading (ADVT) has increased 43.5% to 4 million shares.

Avg. Daily Volume Traded 12 months ended Jul 02, million shares

YearADVT
20204.0
20193.7
20182.2
20173.0
20162.8

3.8 Increased VWAP, up 99% in 5 years

In the past five years Volume Weighted Average Price (VWAP) has increased by 98.8% to NIS13.14. Based on a dynamic start date of five years ago, there has been no decline in VWAP over the last 5 years.

Past five years, 12 months ended Jul 02 (NIS)

YearHigh PriceVWAPLow Price
202016.3113.148.23
201914.6612.7610.34
201810.689.598.51
20179.037.66.21
20167.716.615.92

3.9 Increased share turnover, up 159% in 5 years

In the past five years, average daily share turnover has increased 159.1% to NIS46.7 million (US$12.5 million). This suggests increased liquidity.

Past five years, 12 months ended Jul 02 (NIS million)

YearAverage Daily Turnover
202046.7
201945.7
201820.8
201722.0
201618.0

3.10 Satisfies one criteria of Benjamin Graham

- The P/E of 8.9 multiplied by the P/NTA of 0.8 is 6.7. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.

SECTION 4 Today's Bearish Signals

4.1 Rank in the bottom 14% by Relative Valuation in the Israel market

DescriptionValueRank
Dividend Yield %1.5%In Bottom 14%

4.2 Downtrend

Price/Moving Average Price of 0.84 and negative MACD:

- The price to 200-day MAP ratio is 0.84, a bearish indicator. In the past 200 days this ratio has been under 0.84, 65 times suggesting further downside. The 50-day MAP of NIS11.11 is lower than the 200-day MAP of NIS13.69, another bearish indicator.

- The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 11.06 minus the 26-day EMA of 11.13 is negative, suggesting a bearish signal.

Trailing Relative Strength (6 months) at 36 percentile:

- The stock has a 6-month relative strength of 36 in the Israel market of 317 stocks which means it has underperformed 64% of the market.

4.3 Other Bearish Signals

- Return on Equity of 8.7% versus sector average of 13.6%.

SECTION 5 Ongoing Bearish Parameters

5.1 Annualised Period-based Total Shareholder Returns [TSR %]: The Worst Period with TSR < -20.1%

TSR %1 yr
DSCT.TASE-20.2

5.2 Present Value of NIS1000 Invested in the Past Year; The Worst Period with PVNIS1000 < 799

PVNIS1,0001 yr ago
DSCT.TASENIS798
Bank sectorNIS816
TA-25 IndexNIS882

5.3 Past year: price fall of 21.1%

1-Year price change of -21.1% for Israel Discount Bank underperformed the change of -11.9% in the TA-25 index for a relative price change of -9.3%.

Price Change %Year
Israel Discount Bank-21.1
Bank sector-17.7
TA-25 index-11.9

5.4 Moving Annual Return of -20.0% in the past year:

Moving Annual Return was -20.0% in the past year. Based on a dynamic start date of 5 years ago, the real rate of return has averaged 13.3%

DSCTClose (NIS)Dividends (NIS)Capital Gain / (Loss) %% YieldAnnual Return %
Jul 0211.450.17(21.1)1.2(20.0)
1 Yr ago14.520.1738.71.640.3
2 Yrs ago10.470.03170.317.4
3 Yrs ago8.95-38.7-38.7
4 Yrs ago6.45-(9.8)-(9.8)

Close 5 years ago NIS7.15

5.5 Total Shares on Issue: 2-Year Increase of 8%

In the past 2 years total shares on issue have increased by 86.6 million (8%) from 1.1 billion to 1.2 billion. Based on a dynamic start date of 2 years ago, there has been no decline in issued capital over the last 2 years. An increase in total shares on issue is an unfavourable indicator in Joseph Piotroski's 9 indicators.

Year End (Dec 31)Total Shares on Issue
20181,164,017,000
20171,157,227,000
20161,077,380,000

5.6 Satisfies 2 out of 9 criteria of Joseph Piotroski [pass mark 5]:

- Positive net income.

- Positive operating cashflow.

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 (%)

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

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

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

Volatility: Highest Price minus Lowest Price/Lowest Price (%)

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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