16 September, 2019 (16:00:00 AEST)
BHP Group adds $A6.1 billion in MCap, top heavyweight rise in All Ordinaries Index
BHP Group Limited (ASX:BHP), Australia's largest Materials company by market cap, has lifted $A1.17 (3.1%) from its previous trading session to close at $A38.30. Compared with the All Ordinaries Index which rose 4.9 points (0.07%) in the day, the relative price increase was 3.1%. The rise has been propped up by robust volume of 1.7 times the average daily volume of 7.3 million shares. It posted the highest rise in MCap with the most influence on the All Ordinaries Index. There were 12,361,818 shares worth $A473.5 million traded today.
Highlights in today's Report:
SECTION 1 TODAY'S AGGREGATE VOLUMES AND PRICES
SECTION 3 TODAY'S BEARISH SIGNALS
SECTION 6 ONGOING BULLISH PARAMETERS
SECTION 8 SUMMARY FINANCIALS
|Description||Value||Rank In Market|
|Dividend Yield %||8.7||In Top 8%|
2.3 Short Selling:
+ The current short volume is 0.4 times its own historical average of 0.1%. It plummeted 45.5% from the previous day, plummeted 47.6% from a week ago and plummeted 66.1% from a month ago, a significant bullish indicator.
+ BHP Group rises 3.1% on high volatility: Since the start of trading its volatility (highest price minus lowest price/lowest price) of 3.2% was 2.4 times the average daily volatility of 1.3%, up from 0.7% on Friday and 1.3% on Thursday. A rise in the price on high volatility is a bullish signal.
Price/Moving Average Price and MACD:
+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 36.48 minus the 26-day EMA of 36.24 is positive suggesting a bullish signal. Both the 12-day EMA as well as the 26-day EMA are rising, another bullish signal.
+ The price to 50-day EMAP ratio is 1.1, a bullish indicator. The 50-day EMAP has increased to $A36.64. An increase is another bullish indicator.
+ The price to 200-day MAP ratio is 1.08, a bullish indicator. In the past 200 days this ratio has exceeded 1.08 128 times suggesting further upside. The stock is trading above both its MAPs and the 50-day MAP of $A37.11 is higher than the 200-day MAP of $A35.54, another bullish indicator.
+ BHP Group Limited is placed 244/1315 in BuySellSignals' ranking of Australian performers in the past week, a percentile ranking of 81.
+ In the past week, volume was 1.0 times average and the shares were up 6.0%. Monday's close price is at a 2.6% premium to its 5-day Volume Weighted Average Price (VWAP) of $A37.33.
+ Rises to Falls: in the past month the number of rises outnumbered falls 15:7 or 2.1:1.
+ In the past three months the stock has hit a new 52-week high six times, pointing to an uptrend.
+ The present value of $US1,000 (PV1000) invested one month ago in BHP Group is $A1,092, comprising a capital gain of $A57 and dividend reinvested of $A35.
|All Ordinaries Index||1,005||1,025||1,081|
2.5 High Price Performance Indicators and rank of BHP Group in the Australian market:
|Description||BHP Value||Rank In Market|
|Today's Trading Turnover||$A473.5 million||In Top 1%|
|MCap||$A198.4 billion||In Top 1%|
SECTION 3 BHP GROUP BEARISH SIGNALS3.1 Overvaluation [compared with sector average]:
+ Price/Earnings of 37.8 [11.8].
Price to Sales
+ Price/Sales of 3.1 [1.9].
Price to Book
+ Price to Book of 2.3 [1.8].
Price to EBITDA
+ Price to EBITDA of 9.2 [7.1].
3.2 Overvaluation Indicators and rank of BHP Group in the Australian market:
|Description||Value||Rank In Market|
|Price/Earnings||37.8||In Bottom Quartile|
|P/E * P/NTA||86.18||In Bottom Quartile|
Relative Strength (6 months):
+ In the Australian market of 1,433 stocks and 26 units traded today, the stock has a 6-month relative strength of 54 which means it has outperformed 54% of the market.
3.4 Overbought/Bearish/Resistance Signals:
+ At $A38.30 the price has risen above the upper Bollinger band resistance of $A38.02, indicating a downside risk for it to fall back within the band.
+ The Relative Strength Index (RSI) of 91.9 has penetrated the overbought line of 70, suggesting the price gain of 91.9% in the last 14 days is unusually high.
+ The stock is overbought according to the Williams % R indicator of -18.8, suggesting the price is close to its 14-day high of $A39.34.
+ The Stochastic indicator of 93.8 has broken through the overbought line of 80; this indicates the price is close to its 14-day high and is likely to revert to a downtrend.
SECTION 4 BHP GROUP RELATED NEWSAmerican Depository Receipts
+ BHP Group ADR accelerates rise, up 2.6% in 2 days
BHP Group Limited (N:BHP), the International Depository Receipt (IDR) market's largest Mining company by market cap, has increased $US1.34 (2.6%) over the past two trading days, compared with the Bank of New York Mellon Composite ADR Index which rose 0.8 points (0.6%) in the two days for a relative price increase of 2.1%. Cumulative volume in the 2 days was 0.9 times the average 2-day volume of 2.3 million ADRs. The ADR rose 38.0c (0.8%) on Thursday and 96.0c (1.9%) on Friday to close at $US51.92. There were 2,741,700 ADRs worth $US142.3 million traded today.
RECAP FROM PREVIOUS REPORTS (UPDATED AT THE LAST PRICE OF $A38.30):
SECTION 5 THE PAST WEEK5.1 Snapshot: BHP Group stock was up $US2.17 or 6.0% in the past week. Volume in the week equalled average trading of 36.5 million shares. It outperformed the All Ordinaries index in 3 out of 5 days.
|Day||BHP Group||Close price [AUD]||Price change %||Relative change %||Comment|
|Friday||Rises for a fourth consecutive day, a four-day rise of 2.8%||37.13||0.4||0.3||Price rise on rising relative strength|
|Thursday||Hits two-month high||36.97||0.1||-0.1||Price rise on rising relative strength|
|Wednesday||Adds $A3.1 billion in MCap, top heavyweight rise in All Ordinaries Index||36.92||1.6||1.3||Top Rise|
|Tuesday||Hits two-month high||36.32||0.5||1.0||Price rise on rising relative strength|
+ BHP Group is at a discount of 6.6% to its 12-month high of $A40.99 on July 03. It is also at a premium of 39.0% to the 12-month low of $A27.56 on November 28, 2018.
SECTION 6 ONGOING BULLISH PARAMETERS6.1 Low Debt Indicators:
+ The debt to equity ratio of 44.2% is under a safe benchmark figure of 50%. Moreover, it has improved from 47.2% a year ago.
+ Total Liabilities/EBITDA of 3.5 is comfortably below the Joseph Piotroski benchmark of 5.
6.2 Moving Annual Return (Past 5 years)
Based on a dynamic start date of 5 years ago, the real rate of return has averaged 17.3%. The Moving Annual Return has been positive in 3 of the last 5 years. An investment a year ago in BHP would have produced a return of 43.9%.
|BHP||Close (AUD)||Dividends (AUD)||Capital Gain / (Loss) %||% Yield||Annual Return %|
|1 Yr ago||28.93||1.56||22.3||6.6||28.9|
|2 Yrs ago||23.65||1.06||42.6||6.4||49.0|
|3 Yrs ago||16.59||0.41||(13.8)||2.1||(11.7)|
|4 Yrs ago||19.25||1.67||(29.5)||6.1||(23.5)|
Close 5 years ago $A27.32
6.3 Increased ADVT past five years
Avg. Daily Volume Traded 12 months ended Sep 16, million shares
6.4 Increased VWAP
Past five years, 12 months ended Sep 16 (AUD)
|Year||High Price||VWAP||Low Price|
6.5 Increased Average Daily Turnover
Past five years, 12 months ended Sep 16 (AUD million)
|Year||Average Daily Turnover|
6.6 Turnover Rate & Turnover Period:
+ The turnover rate in the 12 months to date was 32.8% (or a turnover period of 3 years 18 days). The average length of ownership of the stock is 1.8 times the average holding period of 1 year 8 months for stocks in the All Ordinaries Index suggests a larger number of core investors, making a long-term investment safer.
SECTION 7 ONGOING BEARISH PARAMETERS7.1 Performance:
+ Return on Equity 12.8% [13.4%].
+ Return on Assets 6.9% [7.5%].
+ Net profit margin has averaged 5.4% in the last 3 years. This is lower than the sector average of 17.3% and suggests a low margin of safety.
+ As per the Du Pont analysis, Return on Equity [ROE] of 12.8% is lower than sector average of 13.8%. ROE is computed as net profit margin of 17.7% times asset turnover [sales/assets] of 0.39 times leverage factor [total assets/shareholders' equity] of 1.8.
SECTION 8 BHP GROUP SUMMARY FINANCIALS8.1 Dividend History
Trailing 12 months dividend for the 12 months ended September 16 has improved from $US1.67 in 2015 to $US3.34 in 2019; there were 1 decline in the past 5 years. Dividends were up 114.1% for the 12 months ended September 16 from $US1.56 in 2018 to $US3.34 in 2019.
8.2 Financials Summary
|Year ended||Jun 2018||Jun 2017||Jun 2016|
|Sales (USD B)||43.6||36.1||30.9|
|Pretax (USD B)||14.8||11.1||(7.3)|
|Net (USD B)||3.7||5.9||(6.4)|
+ Earnings Per Share (EPS) was down 37.1% from $US1.11 to 69.60c.
8.3 Half-Yearly Report: Key Parameters
Interim Report (Half Year) Analysis H2 2018: BHP Group reports 87% rise in Half-Yearly Net Profit
BHP Group (ASX:BHP), announced net profit of $US3.8b for the half year-ended 31 December 2018, up 86.8% from the previous corresponding period.
Compared with the previous corresponding period [PCP; H/31 Dec 2017], year-over-year [y.o.y.] Revenue was up 1.1% and Net Profit was up 86.8%.
|Half year-ended||31 Dec 2018||31 Dec 2017|
|PCP growth in EPS %||86.84||-36.67|
|PCP growth in Net Profit %||86.8||-37.11|
Major changes compared with previous corresponding period [Year-on-Year]:
- Net profit up 86.8% from $US2.0b to $US3.8b
- EBIT to Sales up from 35.3% to 36.5%
- Profit before tax to Sales up from 31.7% to 32.8%
- Profit after tax to Sales up from 9.8% to 18.1%
- Interest expenses to Sales up from 3.6% to 3.7%
8.4 Annual Report: Key Parameters
FY2018 Annual Report: BHP Billiton profits hit by 37.1% fall
BHP Billiton (ASX:BHP) reported net profit for the year-ended 30 June 2018 of $US3.7b, down 37.1% from $US5.9b in the previous year.
Major changes compared with previous year:
- EBIT Margin up from 30.8% to 33.8%
- EBIT to total assets up from 9.5% to 13.2%
- Total revenue to total assets up from 0.3 to 0.4
- Profit before tax to Sales up from 30.8% to 33.8%
- Interest revenue to Sales up from 0.4% to 0.7%
- Debt to Equity down 6.4% from 0.5 to 0.4
- Current ratio up 35.7% from 1.9 to 2.5
- Total current assets to Total Assets up from 18% to 31.4%
- Total Liabilities to EBITDA of 3.5 compares favourably with the Joseph Piotroski benchmark of <5. This ratio has improved by 28.5% from the previous year's ratio of 4.9.
- Total Liabilities to Operating Cash Flow of 2.8 compares favourably with the Joseph Piotroski benchmark of <4. This ratio has improved by 13.9% from the previous year's ratio of 3.2.
- Net profit slumps 37.1% from $US5.9b to $US3.7b
- EPS slumps 36.9% from 111.0c to 70.0c
- Total non-current assets to Total Assets down from 82% to 68.6%
- Fixed Assets to Total Assets down from 68.8% to 60%
- Future income tax benefit to Total Assets down from 4.9% to 3.6%
- Retained earnings to total assets steady at 45.6%
- Current Inventory to Total Assets up from 3.1% to 3.4%
- Net tangible assets per share steady at $US11.25
Annual Report [Year-on-year comparison: 2018 vs 2017]
|Company Name : BHP Billiton Limited (BHP)|
|Description||$US m||$US m||(%)|
|Sales Revenue||43,638||36,135||Up 20.8|
|Pre-Tax Profit/(Loss)||14,751||11,137||Up 32.5|
|Profit/(Loss) after Tax||3,705||5,890||Slumps 37.1|
|Current Assets||35,130||21,056||Up 66.8|
|Current Liabilities||13,989||11,366||Up 23.1|
|Shareholders' Funds||60,670||62,726||Down 3.3|
|Total Liabilities||51,323||54,280||Down 5.4|
|Total Assets||111,993||117,006||Down 4.3|
|Non-Current Debt||24,069||29,233||Down 17.7|
|Total Debt||26,805||29,627||Down 9.5|
|Operating Cash Flow||18,461||16,804||Up 9.9|
|Net Assets||60,670||62,726||Down 3.3|
|Net Tangible Assets||59,892||58,758||Up 1.9|
Year-on-year comparison of Per Share figures
|June 30||2018||2017||Change (%)|
|Shareholders' Funds||11.4||11.8||Down 3.3|
|Total Liabilities||9.6||10.2||Down 5.4|
|Total Assets||21||22||Down 4.3|
|Non-Current Debt||4.5||5.5||Down 17.7|
|Total Debt||5||5.6||Down 9.5|
|Net Tangible Assets||11.2||11||Up 1.9|
|EPS Final||70c||111 c||Slumps 36.9|
Year-on-year comparison of Performance Ratios
|June 30||2018||2017||Change (%)|
|Return on Equity (%)||12.8||10.7||Up 19.6|
|Return on Assets (%)||6.9||5.7||Up 21.1|
|Total debt to net tangible assets (%)||44.8||50.4||Down 11.1|
|Total Liabilities to EBITDA||3.5||4.9||Down 28.5|
|Total Liabilities to Operating Cash Flow||2.8||3.2||Down 13.9|
|Total Liabilities/Total Assets (Steady % from 0.46 to 0.46)||0.5||0.5||Steady|
|Current Ratio||2.5||1.9||Up 35.7|
|Common Size Ratios by Assets %|
|Total non-current assets to Total Assets||68.6||82.0||Down 16.3|
|Fixed Assets to Total Assets||60.0||68.8||Down 12.8|
|Total current assets to Total Assets||31.4||18.0||Up 74.5|
|Future income tax benefit to Total Assets||3.6||4.9||Down 27.2|
|Current Inventory to Total Assets||3.4||3.1||Up 8.3|
|Common Size Ratios by Sales %|
|Profit before tax to Sales||33.8||30.8||Up 9.7|
|Interest revenue to Sales||0.7||0.4||Up 76.9|
|Tax expenses to Sales||(16.1)||(12.3)||Down 30.9|
5-year record of growth and performance:
In the last 5 years Total Revenue averaged $US43B, EBITDA averaged $US13.6B and Net Profit averaged $US4.8B. Compound Annual Growth Rate (CAGR) averaged -9.3% for Total Revenue, -19.9% for Net Profit and -12.1% for EBITDA.
|Description||Annual ($US B)||5-year Avg ($US B)||5-year CAGR %|
5-year record of EBITDA, Operating Profit, Net Profit, ROE, ROA and ROCE
In 2018 Net Profit Margin of 17.7% was above its 5-year Avg of 9.0%
|Operating Profit Margin||33.8||20.9|
|Net Profit Margin||17.7||9|
|Return on Equity||12.8||6.6|
|Return on Assets||6.9||3.6|
|Return on Capital Employed||15.1||9|
SECTION 9 CORPORATE PROFILE9.1 Activities
BHP Group Limited (BHP, formerly BHP Billiton Limited) is a diversified natural resources company producing commodities along with substantial interests in oil and gas. BHP's principal business lines are mineral exploration and production as well as petroleum exploration, production and refining. BHP's assets, operations and interests are separated into Petroleum and Potash, Copper, Iron ore, Coal and Nickel.
9.2 Top Management
The chairman is Ken Mackenzie, the chief executive officer is Andrew Mackenzie and the chief financial officer is Peter Beaven.
9.3 Issued Capital and MCap
Based on 5,180,000,000 issued shares the market capitalisation is $A198.4 billion.
9.4 Vanguard Total World Stock ETF 7636:
The stock was one of 7636 global stocks selected by Vanguard Total World Stock ETF (VT) who bought 2,557 shares in the period Jun 30, 2019 to Jul 31, 2019 worth $US105,253 at an estimated Volume Weighted Average Price (VWAP) of $US41.1625. As at Jul 31, 2019, the Vanguard Total World Stock ETF held 974,609 shares worth $US27,667,487 or 0.15% by value of the ETF's portfolio [Ranked 94 out of 7636 by value and 2 out of 243 for Australia].
Contact: (61) 1300 55 47 57
Physical Address: Level 18, 171 Collins Street, MELBOURNE, VIC, AUSTRALIA, 3000
Exchange: Australian Securities Exchange
Economic Sector: Basic Materials
Business Sector: Mineral Resources
Industry Group: Metals & Mining
Industry: Specialty Mining & Metals
AU:BHP; ASX:BHP; AX:BHP; BHP.AX
Bhp Billiton Limited, Bhp Billiton Ltd
For comprehensive research on BHP Group Limited, including details from the latest Annual Report and extensive financial data, please search by Company Name on source name "News Bites Stock Review" on Lexis-Nexis platforms.