NEWS BITES - EUROPE
Intermediate Capital Group PLC (L:ICP), the 7th largest Financial services company by market cap in the United Kingdom, extended its gains on Friday, rising an additional GBX8.0 (0.8%) to trade at GBX1,023.0. Intermediate Capital's stock increased 1.8% on Wednesday and 0.9% on Thursday. This brought its 6-day rise to 8.7%, compared with the FTSE 100 Index which rose 225.5 points (3.4%) in the six days for a relative price increase of 5.3%. Cumulative volume in the 6 days was 0.7 times the average 6-day volume of 731,163 shares. Intermediate Capital's stock is now approaching its 38-day high of GBX1,029.0. Its MCap is GBP3 billion (US$3.8 billion).
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 INTERMEDIATE CAPITAL BULLISH SIGNALS
+ The price climbed 5.8% in the last week and jumped 7.7% 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 Intermediate Capital's stock of 4.6% for the week and 6.0% for the month.
+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 982.05 minus the 26-day EMA of 973.19 is positive 8.86 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 13:7 or 1.9:1.
+ The present value of GBP1,000 (PV1000) invested five years ago in Intermediate Capital is GBP2,450, including a capital gain of GBP1,092 and dividend reinvested of GBP358.
+ 5 years Multiplier in GBP = 2.45x
+ Compound Annual Growth Rate (CAGR) in GBP = 19.6%
Present Value of USD1,000 invested 5 years ago:
+ The present value of USD1,000 (PV1000) invested five years ago in Intermediate Capital is $US1,895, including a capital gain of $US618 and dividend reinvested of $US277.
+ 5 years ago GBP 1 equalled USD 1.65
+ 5 years Multiplier in USD = 1.895x
+ Compound Annual Growth Rate (CAGR) in USD = 13.6%
Jan 11, 2019: GBP 1 equals USD 1.28
High Performance Indicators and rank of Intermediate Capital in the United Kingdom market:
|Description||ICP Value||Rank In Market|
|Today's Trading Turnover||GBP5.4 million (US$6.9 million)||In Top Quartile|
|Price/MAP50||1.06||In Top Quartile|
+ The relative yield of ICP, defined by its yield of 3%, divided by average yield of dividend yielding stocks in the FTSE 100 Index of 2.7% is 111.4%. This suggests Intermediate Capital stock is undervalued in dividend yield terms.
+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.5. Compared with the rest of the market the stock is undervalued.
+ Net profit margin has averaged 47.9% in the last 3 years. This is considered superior and suggests a high margin of safety.
+ As per the Du Pont analysis, Return on Equity [ROE] of 19.0% is better than sector average of 12.4%. ROE is computed as net profit margin of 61.1% times asset turnover [sales/assets] of 0.1 times leverage factor [total assets/shareholders' equity] of 4.8.
1.3 Undervaluation [compared with sector average]:
+ Return on Equity 19.0% [12.4%].
+ Return on Assets 4% [0.5%].
SECTION 2 INTERMEDIATE CAPITAL BEARISH SIGNALS
+ The present value of GBP1,000 (PV1000) invested one year ago in Intermediate Capital is GBP948, comprising a capital loss of GBP79 and dividend reinvested of GBP26.
|FTSE 100 Index||1,012||1,031||891|
2.2 Overbought/Bearish/Resistance Signals:
+ At GBX1,023.0 the price has risen above the upper Bollinger band resistance of GBX1,019.06, indicating a downside risk for it to fall back within the band.
+ The Relative Strength Index (RSI) of 72.0 has penetrated the overbought line of 70, suggesting the price gain of 7.6% in the last 14 days is unusually high.
+ The stock is overbought according to the Williams % R indicator of -5.1, suggesting the price is close to its 14-day high of GBX1,029.0.
Low Performance Indicators and rank of Intermediate Capital in the United Kingdom market:
|Description||ICP Value||Rank In Market|
|Debt to Equity||3.3||In Bottom 2%|
|Price to Sales||5||In Bottom Quartile|
+ Total Liabilities/EBITDA of 25.1 which compares unfavourably with the Joseph Piotroski benchmark of 5.
2.4 Overvaluation [compared with sector average]:
+ Price/Sales of 5 [2.9].
+ Price to Book of 2.3 [0.2].
SECTION 3 INTERMEDIATE CAPITAL PRICE VOLUME DYNAMICS
+ Volume: there were 525,940 shares worth GBP5.4 million (US$6.9 million) traded today. In the past week, volume was 0.7 times average and the shares were up 5.8%.
+ Intermediate Capital is at a discount of 14.2% to its 12-month high of GBX1,192.04 on May 23, 2018. It is also at a premium of 14.9% to the 12-month low of GBX890.10 on November 13, 2018.
3.2 Turnover Rate & Turnover Period:
+ The turnover rate in the 12 months to date was 64.6% (or a turnover period of 1 year 6 months). This average length of ownership of the stock at 77.5 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 5 years)
Based on a dynamic start date of 5 years ago, the real rate of return has averaged 21.8%. The Moving Annual Return has been positive in 4 out of 5 years.
|ICP||Close (GBX)||Dividends (GBX)||Capital Gain / (Loss) %||% Yield||Annual Return %|
|1 Yr ago||1,110.36||28.5||65.5||4.2||69.7|
|2 Yrs ago||670.92||-||9.8||-||9.8|
|3 Yrs ago||611.04||27.92||10.1||5||15.2|
|4 Yrs ago||554.75||27.96||13.5||5.7||19.2|
Close 5 years ago GBX488.91
3.4 Beta & Alpha:
+ Beta: the Beta of Intermediate Capital stock is 1.1. A Beta greater than 1 suggests this is a high risk, high return stock with volatility greater than that of the market.
+ Alpha: the Alpha of the stock is -2.9. The actual return of -15.43% fell short of the expected return of -12.6%, reflecting underperformance.
3.5 The Past Year
+ Intermediate Capital Group PLC (L:ICP), dropped GBX87.36 (or 7.9%) in the past year to close at GBX1,023.0 today. Compared with the FTSE 100 Index which has fallen 10.7% over the same period, this is a relative price increase of 2.9%.
SECTION 4 INTERMEDIATE CAPITAL RELATED NEWS
+ BSS/News Bites:
Intermediate Capital Group PLC is placed 593/1262 in BSS News Bites' ranking of United Kingdom performers in the past year, a percentile ranking of 53.
+ Vanguard Total World Stock ETF 7563:
The stock was one of 7563 global stocks selected by Vanguard Total World Stock ETF (VT). As at Nov 30, 2018, the Vanguard Total World Stock ETF held 88,819 shares worth $US1,119,755 or 0.01% by value of the ETF's portfolio [Ranked 1951 out of 7563 by value and 103 out of 291 for United Kingdom].
SECTION 5 INTERMEDIATE CAPITAL SUMMARY FINANCIALS
5.1 Dividend History
+ Trailing 12 months dividend has improved from GBX28.0 in 2015 to GBX31.0 in 2019.
5.2 Financials Summary
|Year ended||Mar 2018||Mar 2017||Mar 2016|
|Sales (USD M)||767.3||799.4||574.6|
|Pretax (USD M)||254.6||322.8||203.1|
|Net (USD M)||321||278.5||177.2|
+ Sales were down 4% from US$799.4 million in 2017 to US$767.3 million in 2018.
+ Net profit was up 15.2% from US$278.5 million in 2017 to US$321 million in 2018.
SECTION 6 INTERMEDIATE CAPITAL PROFILE
Intermediate Capital Group PLC is a private equity firm specializing in mezzanine financing and mid-market investments in growth capital, restructuring, acquisitions, public to private transactions with or without private equity backing, management buyouts and management buyins, development capital, public quoted company finance, off-balance-sheet finance, refinancings and recapitalizations, and pre-IPO financing. The firm does not invest in property companies or start-ups. It seeks to invest in companies whose principal place of business is the European Union, Bulgaria, Romania, North America, and the Asia Pacific, including Hong Kong, South Korea, Singapore, Taiwan, Japan, Australia, and New Zealand. The firm provides mezzanine financing in the range between 15 million ($21.43 million) and 500 million ($714.18 million). It generally structures its financing in the form of subordinated loan with equity warrants, as preference shares, convertible loan, leveraged loans, mezzanine loans, and CDOs. The firm provides loans for a maturity period between seven years and ten years with repayments to be made in one payment at final maturity. Its mezzanine investments are usually structured to provide a cash yield between three percent and four percent over the relevant interbank rate, plus an additional return to reflect the risk involved. The firm seeks to invest in debt. The firm is also a manager of third party mezzanine, CDO, and Institutional Client Funds. Intermediate Capital Group PLC was founded in 1989 and is based in London with additional offices across Europe, North America, and Asia.
6.2 Top Management
The chairman is Kevin Parry and the chief executive officer is Benoit Durteste.
6.3 Issued Capital
Based on 290,348,505 issued shares the market capitalisation is GBP3 billion (US$3.8 billion).
Physical Address: Juxon House, 100 St Paul's Churchyard, London, EC4M 8BU, United Kingdom
State/Province/Country: United Kingdom
Country of Incorporation: United Kingdom
Exchange: London Stock Exchange
Economic Sector: Financials
Business Sector: Banking & Investment Services
Industry Group: Banking Services
Activity: Banks - NEC*
* NEC: Not elsewhere classified
L:ICP; LON:ICP; LN:ICP; ICP.L
Intermediate Capital Group Plc