Bovis Homes continues significant uptrend; lifts 2.4% 11 January 2019

NEWS BITES - EUROPE

Bovis Homes Group PLC (L:BVS), the 9th largest Household goods & home construction company by market cap in the United Kingdom, has lifted GBX22.0 (2.4%) from its last trading session of January 10 to close at GBX931.0. Compared with the FTSE 100 Index which fell 24.7 points (0.4%) in the day, the relative price increase was 2.8%. The volume was 0.9 times the average daily trading volume of 649,481 shares. Its MCap is GBP1.3 billion (US$1.6 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 BOVIS HOMES BULLISH SIGNALS

1.1 Technicals:

+ The price jumped 8.4% in the last week and soared 10.1% 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 Bovis Homes' stock of 7.2% for the week and 8.5% for the month.

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 883.7 minus the 26-day EMA of 882.17 is positive 1.52 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.

+ The present value of GBP1,000 (PV1000) invested five years ago in Bovis Homes is GBP1,691, including a capital gain of GBP347 and dividend reinvested of GBP345.

+ 5 years Multiplier in GBP = 1.691x

+ Compound Annual Growth Rate (CAGR) in GBP = 11.1%

Present Value of USD1,000 invested 5 years ago:

+ The present value of USD1,000 (PV1000) invested five years ago in Bovis Homes is $US1,308, including a capital gain of $US41 and dividend reinvested of $US266.

+ 5 years ago GBP 1 equalled USD 1.65

+ 5 years Multiplier in USD = 1.308x

+ Compound Annual Growth Rate (CAGR) in USD = 5.5%

Jan 11, 2019: GBP 1 equals USD 1.28

High Performance Indicators and rank of Bovis Homes in the United Kingdom market:

DescriptionBVS ValueRank In Market
Today's Trading TurnoverGBP5.6 million (US$7.1 million)In Top 9%
Debt to Equity0.02In Top Quartile
Price Change %2.4In Top Quartile
% Prem to Vol Wtd Price7.7In Top Quartile

1.2 Fundamentals:

+ The P/E of 13.7 multiplied by the P/NTA of 1.2 is 16.3. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.

+ The relative yield of BVS, defined by its yield of 10.4%, divided by average yield of dividend yielding stocks in the FTSE 100 Index of 2.7% is 381.2%. This suggests Bovis Homes stock is undervalued in dividend yield terms.

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.8. Compared with the rest of the market the stock is undervalued.

+ Total Liabilities/EBITDA of 4.3 is less than the Joseph Piotroski benchmark of 5.

+ Interest cover defined by EBIT/I is 14.4 times. This indicates it is less leveraged.

1.3 Undervaluation [compared with sector average]:

+ Price/Sales of 1.2 [2.1]. We estimate Bovis Homes stock is trading at a current year Price/Sales of 1.2 and a forward year Price/Sales of 1.1.

+ Dividend yield of 10.4% [5.1%].

SECTION 2 BOVIS HOMES BEARISH SIGNALS

2.1 Technicals:

Overbought/Bearish/Resistance Signals:

+ At GBX931.0 the price has risen above the upper Bollinger band resistance of GBX919.41, indicating a downside risk for it to fall back within the band.

+ The Relative Strength Index (RSI) of 76.0 has penetrated the overbought line of 70, suggesting the price gain of 10.3% in the last 14 days is unusually high.

+ The stock is overbought according to the Williams % R indicator of -8.6, suggesting the price is close to its 14-day high of GBX941.40.

+ The Money Flow Index [MFI] is 82.4 suggesting an overbought 14-day trend, being above 80. The Money Ratio of 4.7 suggests positive money flow was 4.7 times negative money flow.

2.2 A negative finish to 2018

The stock has sunk GBX209.70 (or 19.7%) in FY 2018 to close at GBX855.20 on Friday, December 28. The average daily volume of 648,599 shares in FY 2018 was 0.8 times the average daily volume in FY 2017.

2.3 Fundamentals:

+ Net profit margin has averaged 11.3% in the last 3 years. This is lower than the sector average of 20.3% and suggests a low margin of safety.

+ As per the Du Pont analysis, Return on Equity [ROE] of 8.6% is lower than sector average of 28.2%. ROE is computed as net profit margin of 8.9% times asset turnover [sales/assets] of 0.65 times leverage factor [total assets/shareholders' equity] of 1.5.

Annual Trend in Revenue, EPS and EBITDA:

5-years average annualized earnings growth rate of 17.8%

+ Revenue growth, Earnings per share growth and EBITDA growth have shown signs of deterioration in recent years. [Year ended, all figures in %]

YearRevenue GrowthEPS GrowthEBITDA Growth
Dec 17-2.5-24.5-25
Dec 1611.4-5.6-3.1
Dec 151722.317.9
Dec 1445.473.364.2

2.4 Overvaluation [compared with sector average]:

+ Price/Earnings of 13.7 [7.7].

+ Return on Equity 8.6% [28.2%].

+ Return on Assets 5.8% [14.1%].

+ Return on Capital Employed 10.4% [14.0%].

SECTION 3 BOVIS HOMES PRICE VOLUME DYNAMICS

3.1 Technicals:

+ Volume: there were 597,727 shares worth GBP5.6 million (US$7.1 million) traded today. In the past week, volume was 0.7 times average and the shares were up 8.4%.

+ Bovis Homes is at a discount of 24.9% to its 12-month high of GBX1,240.13 on May 25, 2018. It is also at a premium of 13.7% to the 12-month low of GBX818.60 on December 18, 2018.

+ The present value of GBP1,000 (PV1000) invested one year ago in Bovis Homes is GBP961, comprising a capital loss of GBP119 and dividend reinvested of GBP80.

PV10001-week1-month1-year
BVS.L1,0841,101961
FTSE 100 Index1,0121,031891

3.2 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 143.1% (or a turnover period of 8 months). This average length of ownership of the stock at 35.0 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 5 years)

Based on a dynamic start date of 5 years ago, the real rate of return has averaged 12.6%. The Moving Annual Return has been positive in 3 out of 5 years.

BVSClose (GBX)Dividends (GBX)Capital Gain / (Loss) %% YieldAnnual Return %
Jan 1193196.5(11.9)9.1(2.8)
1 Yr ago1,056.621537.31.939.2
2 Yrs ago769.7541.3(8.0)4.9(3.0)
3 Yrs ago836.4436.722.15.427.4
4 Yrs ago685.2221.5(0.9)3.12.2

Close 5 years ago GBX691.38

3.4 Beta:

+ Beta: the Beta of Bovis Homes stock is 0.6. 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 Year

+ Bovis Homes Group PLC (L:BVS), fallen GBX125.62 (or 11.9%) in the past year to close at GBX931.0 today. Compared with the FTSE 100 Index which has fallen 10.7% over the same period, this is a relative price change of -1.2%.

SECTION 4 BOVIS HOMES RELATED NEWS

Other News

+ BSS/News Bites:

Bovis Homes Group PLC is placed 690/1262 in BSS News Bites' ranking of United Kingdom performers in the past year, a percentile ranking of 46.

+ 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 46,255 shares worth $US572,479 by value of the ETF's portfolio [Ranked 3095 out of 7563 by value and 167 out of 291 for United Kingdom].

SECTION 5 BOVIS HOMES SUMMARY FINANCIALS

5.1 Dividend History

+ Trailing 12 months dividend has improved from GBX21.5 in 2015 to GBX96.5 in 2019.

5.2 Financials Summary

Year endedDec 2017Dec 2016Dec 2015
Sales (USD B)1.31.31.2
Pretax (USD M)145.8197.8204.7
Net (USD)116.7M-163.7M
EPS (GBP)0.680.9010.954

+ Sales were down 2.5% from US$1.3 billion in 2016 to US$1.3 billion in 2017.

+ Pre-tax profit was down 26.3% from US$197.8 million in 2016 to US$145.8 million in 2017.

SECTION 6 BOVIS HOMES PROFILE

6.1 Activities

Bovis Homes Group PLC engages in designing, building, and selling homes for private and public sectors primarily in England and Wales. Its product portfolio includes one and two bedroom coach houses and apartments, three storey town houses, four and five bedroom family homes, and homes for first time buyers. The company also involves in building private housing, including retirement living; and commercial buildings, such as offices, retail, leisure, industrial/warehousing, and community. As of December 31, 2009, it had consented land bank of 12,042 plots and strategic land bank of 16,363 plots. The company was founded in 1885 and is headquartered in Longfield, the United Kingdom.

6.2 Top Management

The chief executive officer is Greg Fitzgerald.

6.3 Issued Capital

Based on 134,800,000 issued shares the market capitalisation is GBP1.3 billion (US$1.6 billion).

COMPANY IDENTIFIERS

Contact: 44-1474-876200

Physical Address: The Manor House, North Ash Road, New Ash Green, Longfield, DA3 8HQ, United Kingdom

State/Province/Country: United Kingdom

Country of Incorporation: United Kingdom

Exchange: London Stock Exchange

Business Sector: Cyclical Consumer Products

Industry Group: Household Goods

Economic Sector: Consumer Cyclicals

ISIN: GB0001859296

L:BVS; LON:BVS; LN:BVS; BVS.L

PermID: 4295894878

RIC: BVS.L

Bovis Homes Group Plc

Source: www.BuySellSignals.com