Stock Spirits increases 11 January 2019

NEWS BITES - EUROPE

Stock Spirits Group PLC (L:STCK), the 4th largest Beverages company by market cap in the United Kingdom, has increased GBX1.0 (0.5%) from its last trading session of January 10 to close at GBX220.0. Compared with the FTSE 100 Index which fell 24.7 points (0.4%) in the day, the relative price increase was 0.8%. The volume was 0.3 times the average daily trading volume of 267,175 shares. Its MCap is GBP440 million (US$561.4 million).

Highlights in today's Report:

SECTION 1 BULLISH SIGNALS

SECTION 2 BEARISH SIGNALS

SECTION 3 PRICE VOLUME DYNAMICS

SECTION 4 RELATED NEWS

SECTION 5 SUMMARY FINANCIALS

SECTION 6 PROFILE

SECTION 1 STOCK SPIRITS BULLISH SIGNALS

1.1 Technicals:

+ The price lifted 3.3% in the last week and 3.0% in the last month.

+ Compared with the FTSE 100 Index which rose 1.2% for the week and 1.6% for the month, this represented a relative price increase for Stock Spirits' stock of 2.1% for the week and 1.4% for the month.

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 214.92 minus the 26-day EMA of 210.95 is positive 3.97 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.

+ Rises to Falls: in the past month the number of rises outnumbered falls 13:6 or 2.2:1.

+ The present value of GBP1,000 (PV1000) invested three years ago in Stock Spirits is GBP2,406, including a capital gain of GBP1,027 and dividend reinvested of GBP379.

+ 3 years Multiplier in GBP = 2.406x

+ Compound Annual Growth Rate (CAGR) in GBP = 33.6%

Present Value of USD1,000 invested 3 years ago:

+ The present value of USD1,000 (PV1000) invested three years ago in Stock Spirits is $US2,089, including a capital gain of $US781 and dividend reinvested of $US308.

+ 3 years ago GBP 1 equalled USD 1.452

+ 3 years Multiplier in USD = 2.089x

+ Compound Annual Growth Rate (CAGR) in USD = 27.5%

Jan 11, 2019: GBP 1 equals USD 1.28

High Performance Indicator and rank of Stock Spirits in the United Kingdom market:

DescriptionSTCK ValueRank In Market
Price/MAP501.07In Top Quartile

1.2 Fundamentals:

+ The relative yield of STCK, defined by its yield of 3.3%, divided by average yield of dividend yielding stocks in the FTSE 100 Index of 2.7% is 121.7%. This suggests Stock Spirits stock is undervalued in dividend yield terms.

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.6. Compared with the rest of the market the stock is undervalued.

+ Interest cover defined by EBIT/I is 9.4 times. This indicates it is less leveraged.

1.3 Undervaluation [compared with sector average]:

+ Price/Sales of 1.6 [5.0]. We estimate Stock Spirits stock is trading at a current year Price/Sales of 1.3 and a forward year Price/Sales of 1.1.

+ Dividend yield of 3.3% [2.5%].

SECTION 2 STOCK SPIRITS BEARISH SIGNALS

2.1 Technicals:

+ The present value of GBP1,000 (PV1000) invested one year ago in Stock Spirits is GBP857, comprising a capital loss of GBP169 and dividend reinvested of GBP26.

PV10001-week1-month1-year
STCK.L1,0331,030857
FTSE 100 Index1,0121,031891

2.2 Overbought/Bearish/Resistance Signals:

+ The stock is overbought according to the Williams % R indicator of -10.0, suggesting the price is close to its 14-day high of GBX222.0.

Low Performance Indicator and rank of Stock Spirits in the United Kingdom market:

DescriptionSTCK ValueRank In Market
Return on Assets [ROA] %1.7In Bottom Quartile

2.3 A negative finish to 2018

The stock has sunk 14.5% in FY 2018 to close at GBX219.50 on Friday, December 28. The % fall exceeded the % loss in the stock in each of the two preceding financial years. The volume in FY 2018 equalled average trading of 272,355 shares in the previous year.

2.4 Fundamentals:

+ Total Liabilities/EBITDA of 10.7 which compares unfavourably with the Joseph Piotroski benchmark of 5.

+ Net profit margin has averaged 7.5% in the last 3 years. This is lower than the sector average of 22.4% and suggests a low margin of safety.

+ As per the Du Pont analysis, Return on Equity [ROE] is less than stellar at 3.2%; a deterioration from 8.2% last year. ROE is computed as net profit margin of 4.1% times asset turnover [sales/assets] of 0.4 times leverage factor [total assets/shareholders' equity] of 1.9.

YOY Deterioration in ROE and Profit Margin

Du Pont AnalysisROEProfit MarginAsset TurnoverEquity Multiplier
Current Year3.24.10.41.9
Previous Year8.210.90.391.9

2.5 Overvaluation [compared with sector average]:

+ Price/Earnings of 36.7 [22.1].

+ Return on Equity 3.2% [25.3%].

+ Return on Assets 1.7% [9.8%].

+ Return on Capital Employed 5.9% [15.9%].

SECTION 3 STOCK SPIRITS PRICE VOLUME DYNAMICS

3.1 Volatility:

+ Stock Spirits is at a discount of 29.1% to its 12-month high of GBX310.24 on January 22, 2018. It is also at a premium of 19.6% to the 12-month low of GBX184.0 on September 20, 2018.

3.2 Aggregate Volumes and Prices:

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

+ London: STCK.L 87,837 [VI of 0.3] volume 72.62% of aggregate. Price: GBX220.0.

+ Prague: STOCK.PR 33,119 [VI of 1.1] volume 27.38% of aggregate. Price: CZK62.30. Using the current exchange rate of CZK1 equals 3.5073GBX, The shares are at a 0.7% discount to the close price on London.

+ Aggregate volume: there were 120,956 shares of Stock Spirits worth GBP265,298 traded today. The aggregate volume was 0.4 times average trading of 297,000 shares.

The turnover rate in the 12 months to date was 38.1% (or a turnover period of 2 years 7 months). This average length of ownership of the stock at 131.0 times the average holding period of 7 days for stocks in the FTSE 100 Index suggests a larger number of core investors, making a long-term investment safer.

3.3 Moving Annual Return (Past 3 years)

Based on a dynamic start date of 3 years ago, the real rate of return has averaged 38.9%. The Moving Annual Return has been positive in 2 out of 3 years.

STCKClose (GBX)Dividends (GBX)Capital Gain / (Loss) %% YieldAnnual Return %
Jan 112207.29(16.9)2.8(14.1)
1 Yr ago264.686.8158.14.162.2
2 Yrs ago167.4215.5354.214.368.5

Close 3 years ago GBX108.56

3.4 Beta:

+ Beta: the Beta of Stock Spirits stock is 0.5. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.

3.5 The Past Quarter

+ Stock Spirits Group PLC (L:STCK), has climbed GBX18.50 (or 9.2%) in the past quarter to close at GBX220.0 today. Compared with the FTSE 100 Index which fell 88.8 points (or 1.3%) in the past quarter, this represented a relative price increase of 10.4%. The stock is trading at a price earnings multiple of 36.7 times, which is 5th lowest in the Beverages sector.

SECTION 4 STOCK SPIRITS RELATED NEWS

Other News

+ BSS/News Bites:

Stock Spirits Group PLC is placed 777/1262 in BSS News Bites' ranking of United Kingdom performers in the past year, a percentile ranking of 39.

SECTION 5 STOCK SPIRITS SUMMARY FINANCIALS

5.1 Dividend History

+ Trailing 12 months dividend has improved from GBX1.0 in 2015 to GBX7.3 in 2019.

5.2 Financials Summary

Year endedDec 2017Dec 2016Dec 2015
Sales (USD M)351.2333.7247.1
Pretax (USD M)34.950.129.6
Net (USD M)14.536.418.3
EPS (GBP)0.060.14-

+ Net profit was down 60.2% from US$36.4 million in 2016 to US$14.5 million in 2017.

+ Earnings Per Share (EPS) was down 57.1% from 14.0 GBX to 6.0 GBX.

SECTION 6 STOCK SPIRITS PROFILE

6.1 Activities

Stock Spirits Group PLC produces markets alcoholic beverages. The Company offers vodka, liqueur, herbal bitter, brandy, rum, whiskey, gin and other alcoholic beverages. Stock Spirits Group markets its alcoholic beverage brands around the world.

6.2 Top Management

The chief executive officer is Mirek Stachowicz and the chief financial officer is Paul Bal.

6.3 Issued Capital

Based on 200,000,000 issued shares the market capitalisation is GBP440 million (US$561.4 million).

COMPANY IDENTIFIERS

Contact: 44-1628-648500

Physical Address: Solar House, Mercury Park, WOOBURN GREEN, High Wycombe, HP10 0HH, United Kingdom

State/Province/Country: United Kingdom

Country of Incorporation: United Kingdom

Exchange: London Stock Exchange

Economic Sector: Consumer Non-Cyclicals

Business Sector: Food & Beverages

Industry Group: Beverages

ISIN: GB00BF5SDZ96

L:STCK; LON:STCK; LN:STCK; STCK.L

PermID: 4296153573

RIC: STCK.L

Stock Spirits Group Plc

Source: www.BuySellSignals.com