12 August, 2020 (16:00:00 AEST)

Commonwealth Bank (CBA:AUD74.34) drops on high volatility


Dateline: Wednesday August 12, 2020
Commonwealth Bank of Australia (ASX:CBA), Australia's largest Bank by market cap, traded between an intraday low of AUD73.95 and a high of AUD76.75, suggesting a trading opportunity between peaks and troughs.

The average daily volatility of 2.2% places Commonwealth Bank's stock in the 4th quartile in the market, meaning it is the least volatile.

Since the start of trading its volatility (highest price minus lowest price/lowest price) of 3.8% was 1.8 times the average daily volatility of 2.2%, up from 2.9% on Tuesday and 2.9% on Monday.

A fall in the price on high volatility is a bearish signal.

Commonwealth Bank's stock price has decreased 36.0c (0.5%) from its previous trading session to close at AUD74.34.

Compared with the All Ordinaries Index which fell 15.1 points (0.2%) in the day, the relative price change was -0.2%.

There were 4,103,812 shares worth AUD305.1 million traded today.

The volume of 4.1 million shares was close to average trading.

CBA Stock Summary (traded in AUD)
Currency1 AUD = 0.72 USD Dividend Yield5.8%
Aug 12 closeAUD74.34SectorBank
Ave Daily Volume4,053,901 sharesShares Outstanding1,770,239,507
52-Week Range53.44 - 89.03Market CapAUD131.6 billion [USD94.5 billion]
P/E15.7EPS Growth (FY2019 vs FY2018)-8.7%

CMWAY ADR Summary (traded in USD)
Home ExchangeAustraliaRatio1 ADR equals 1 ordinary share
CodeCMWAYTypeSponsored
ISINUS2027126000Aug 11 closeUSD53.70
CUSIP202712600Ave Daily Volume36,053 ADRs
*No. Held by Institutions1,525,49852-Week Range31.00 - 59.82
% of shares outstanding0.09% 


Primary Exchange and Other Listings: Trading Currency and Volume (Excl ADR)
ExchangeTickerCurrencyLastADVTVol % of TotalToday's VI
ASXCBAAUD74.344,053,84599.81
FrankfurtCWWEUR45.572,9170.23.4
Total    100.00 
1 AUD [Australian Dollar]= 1.6471 EUR
ADVT= Avg. Daily Volume of Trading; VI= Volume Index (1 is avg)

INDEX

SECTION 1 Recent News

SECTION 2 Corporate Profile

SECTION 3 Top shareholders

SECTION 4 Today's Bearish Signals

SECTION 5 Ongoing Bearish Parameters

SECTION 6 Today's Bullish Signals

SECTION 7 Ongoing Bullish Parameters

Glossary

LINKS TO FURTHER INFORMATION ON CBA:

EXCEL TABLES ARE AVAILABLE TO EXPORT AS FOLLOWS:

+ LATEST FINANCIALS [FY 2019]:
http://www.buysellsignals.net/BuySellSignals/report/Australia/Stock/PDF/quarterly/xls/CBA_Financials.xls
+ NEWS ARCHIVES PAST 4 YEARS IN HTML
http://www.buysellsignals.net/BuySellSignals/report/Australia/Stock/Daily/Html/CBA_Corporate_Wire.html

EXTENSIVE DATA ON THE SUBJECTS BELOW ARE AVAILABLE TO DOWNLOAD OR VIEW AT THE LINK FOLLOWING:

+ Dividend
+ News Archives (Sep 2018 - Feb 2020)

http://www.buysellsignals.net/BuySellSignals/report/Australia/Stock/Daily/short/Html/428_DDR2_SR.html

SECTION 1 Recent News

1.1 People's News
Wed Jun 10, 2020
Shirish Apte was appointed Independent Non-Executive Director of Commonwealth Bank (ASX:CBA) six years ago on June 10, 2014. The shares were up from AUD59.3 to AUD71.6 and the total annualized return to shareholders (TRS) since appointment is 9.8%. The present value of AUD1,000 (PV1000) invested on the appointment date is now worth AUD1,757, a gain of AUD207 and dividend reinvested of AUD550.

SECTION 2 Corporate Profile

2.1 Activities
Commonwealth Bank of Australia (CBA) is Australia's leading providers of integrated financial services, providing retail, business and institutional banking, funds management, superannuation, life insurance, general insurance, broking services and finance company activities. Their operations are conducted primarily in Australia and New Zealand. In addition, they also operate in a number of other countries, including the United Kingdom, the United States, China, Japan, Singapore, Hong Kong, Indonesia and South Africa.

2.2 Contact Details
Websitehttp://www.commbank.com.au/
Physical AddressGround Floor, Tower 1, 201 Sussex Street, SYDNEY, NSW, AUSTRALIA, 2000
Phone(02) 9378 2000
Fax(02) 9118 7192
Emaillouise.amos@cba.com.au

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

SECTION 3 Top shareholders

DateName of the Share Holder% of Capital
07-04-2020HSBC Custody Nominees22.4
07-04-2020J P Morgan Nominees Australia12.8
07-04-2020Citicorp Nominees Pty Limited6.1
07-04-2020National Nominees Limited3.1
07-04-2020BNP Paribas Noms Pty Ltd3.0

SECTION 4 Today's Bearish Signals

4.1 Rank in the bottom 11% by Relative Valuation in the Australian market
DescriptionValueRank
EV/EBITDA4.4In Bottom 11%

4.2 Short Selling
+ In the Australian Short Selling market of 866 stocks, short selling (on ASX and CHI-X) as a % of issued shares ranked 205th and within the top quartile of stocks, a bearish indicator.

4.3 Downtrend
Today's Volatility:
Since the start of trading its volatility (highest price minus lowest price/lowest price) of 3.8% was 1.8 times the average daily volatility of 2.2%, up from 2.9% on Tuesday and 2.9% on Monday. A fall in the price on high volatility is a bearish signal.

Past Month:
- Falls to Rises: In the past month the number of falls outnumbered rises 14:9 or 1.6:1.

Trailing Relative Strength (6 months) at 39 percentile:
- The stock has a 6-month relative strength of 39 in the Australian market of 1,517 stocks and 20 units which means it has underperformed 61% of the market.

4.4 Overvaluation
Price/Earnings of 15.7 > sector avg of 12.2:
- Price/Earnings of 15.7 versus sector average of 12.2.

SECTION 5 Ongoing Bearish Parameters

5.1 MCap: 5-Year Decrease of AUD2 billion
In the past 5 years Market Capitalization has decreased by AUD2.1 billion (2%) from AUD133.7 billion to AUD131.6 billion. Based on a dynamic start date of 5 years ago, there have been declines in MCap in 3 out of 5 years.
  PriceMCap (AUD B)MCap (US$ B)
LastAUD74.34131.694.5
1 Year agoAUD75.90141.595.6
2 Years agoAUD67.60132.997.9
3 Years agoAUD68.20139.3109.8
4 Years agoAUD61.02130.3100.7
5 Years agoAUD62.47133.799


5.2 EPS growth [FY2019 vs FY2018] of -8.7%:
FYEPS (AUD)Growth %
20194.74-8.7
20185.19-10.1


5.3 Annualised Period-based Total Shareholder Returns [TSR %]: The Worst Period with TSR < 3.4%
TSR %1 yr
CBA.ASX3.3


5.4 A 100.0% Decrease in Insider Buying
In the past 5 years a total of 88,123,634 Commonwealth Bank shares (or 5.0% of the total shares on issue) worth AUD7.7 million were bought by insiders. Based on a dynamic start date of 5 years ago, insider buying has averaged 17,624,727 shares per year. In the past year, insiders bought 5,886 shares, a decrease of 100.0% from the previous year.
YearNo. of SharesValue, AUD
1 Yr ago5,88634,398
2 Yrs ago88,055,6002,694,158
3 Yrs ago84162,938
4 Yrs ago61,3074,887,023
Total88,123,6347,678,517

SECTION 6 Today's Bullish Signals

6.1 Momentum Up 4.5% Past Week
Commonwealth Bank outperformed the All Ordinaries index in 4 out of 5 days. The price ranged between a low of 71.46 on Friday, Aug 07 and a high of 74.7 on Tuesday, Aug 11.
DayCommonwealth BankClose price [AUD]Price change %Relative change %Comment
TuesdayHits six-month high on average volume74.71.00.6Week-high of 74.7
MondayAdds AUD4 billion in MCap, top heavyweight rise in All Ordinaries Index73.983.51.9Top Rise
FridayFalls for a second consecutive day, a two-day fall of 0.3%71.46-0.10.5Week-low of 71.46
ThursdayDecreases, drops 2.3% for week71.5-0.3-1.0Steepest Fall
WednesdayUp 2.8% in 2 days71.710.30.8Price rise on beating relative strength


6.2 Rank in the top 5% by Relative Valuation in the Australian market
DescriptionValueRank
Cash to MCap %41.5In Top 5%

6.3 Uptrend
Positive MACD:
- The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 72.8 minus the 26-day EMA of 72.02 is positive, suggesting a bullish signal. Both the 12-day EMA as well as the 26-day EMA are rising, another bullish signal.

6.4 Undervaluation
Earnings Yield of 6.4% > Australian ave of 4% > Bond Yield of 0.9%:
- Earnings yield of 6.4% is greater than the Australian average earning yield of 4%.
- The earnings yield of 6.4% is 7.4 times the 10-year bond yield of 0.9%.
(All figures in %)
Earnings Yield6.4
Australian avg4
Dividend Yield5.8
Bond Yield0.9


Dividend Yield > Bond Yield of 0.86%:
The dividend yield of 5.8% is 6.74 times the triple-A bond yield of 0.86%. The times factor of 6.74 is above the benchmark factor of 0.67 times set by Benjamin Graham.
(All figures in %)
Dividend Yield5.8
Bond Yield0.86
Spread4.94

Dividend Yield of 5.8% > Index avg of 4.1%:
- The relative yield of the stock, defined by its yield of 5.8%, divided by average yield of dividend yielding stocks in the All Ordinaries Index of 4.1% is 140.1%. This suggests the stock is undervalued in dividend yield terms.
MCap/Total Assets:
- Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.1. Compared with the rest of the market the stock is undervalued and ranks in the top 2% of stocks by value of Q Ratio.
- The company is cash rich with Cash to Market Capitalisation at 41.5%.
Brand Value/Enterprise Value:
- Brandirectory have estimated Commonwealth Bank brand value at AUD7.4 billion. The Brand Value represents 5.9% of the estimated Enterprise Value of AUD125.2 billion. Enterprise Value is defined as MCap of AUD131.6 billion plus net debt of AUD-6.4 billion.

6.5 Other Bullish Signals
- Return on Equity of 12.0% versus sector average of 9.9% and market average of 7.8%.
- Return on Capital Employed of 40.5% versus sector average of 4.2% and market average of 5.2%.

SECTION 7 Ongoing Bullish Parameters

7.1 Present Value of AUD1000 Invested in the Past [3 Mo, 1 Yr, 3 Yrs]; The Best Periods with PVAUD1000 > 1,032
PVAUD1,0003 mo ago1 yr ago3 yrs ago
CBA.ASXAUD1,245AUD1,033AUD1,302
Bank sectorAUD1,222AUD779AUD749
All Ordinaries IndexAUD1,143AUD938AUD1,089

7.2 The Best Periods [3 Mo, 3 Yrs] with Price Change % > 8.9
3-Year price change of 9% for Commonwealth Bank outperformed the change of 8.9% in the All Ordinaries index for a relative price change of 0.1%.
Price Change %Quarter3 Years
Commonwealth Bank24.59
Bank sector22.2-25.1
All Ordinaries index15.58.9


7.3 Moving Annual Return of 3.6% in the past year:
Moving Annual Return was 3.6% in the past year. Based on a dynamic start date of 5 years ago, the real rate of return has averaged 10.1%. The Moving Annual Return has consistently exceeded 3%.
CBAClose (AUD)Dividends (AUD)Capital Gain / (Loss) %% YieldAnnual Return %
Aug 1274.344.31(2.1)5.73.6
1 Yr ago75.94.3112.36.418.6
2 Yrs ago67.64.3(0.9)6.35.4
3 Yrs ago68.24.2111.86.918.7
4 Yrs ago61.024.2(2.3)6.74.4

Close 5 years ago AUD62.47

7.4 Created Market Value [CMV] past 12 yrs of AUD34.4 billion
- Market Capitalization has increased by AUD62.9 billion from AUD68.7 billion to AUD131.6 billion in the last 12 years. This increase comprises cumulative retained earnings (RETE) of AUD28.5 billion and Created Market Value of AUD34.4 billion. The Created Market Value multiple, defined by the change in MCap for every AUD1 of retained earnings is exemplary at AUD2.21.

7.5 Annualised Period-based Total Shareholder Returns [TSR %]: The Best Periods with TSR > 9%
TSR %3 yrs5 yrs10 yrs20 yrs
CBA.ASX9.110.217.716.8


7.6 Increased Volume, up 25% in 5 years
In the past five years, Average Daily Volume of Trading (ADVT) has increased 25.2% to 4.1 million shares.
Avg. Daily Volume Traded 12 months ended Aug 12, million shares
YearADVT
20204.1
20192.9
20182.8
20173.0
20163.2

7.7 Increased VWAP, up 19% in 5 years
In the past five years Volume Weighted Average Price (VWAP) has increased by 18.8% to AUD71.43. .
Past five years, 12 months ended Aug 12 (AUD)
YearHigh PriceVWAPLow Price
202089.0371.4353.44
201979.7469.160.24
201872.0766.7560.19
201774.3467.0157.29
201667.1460.154.86

7.8 Increased share turnover, up 37% in 5 years
In the past five years, average daily share turnover has increased 36.6% to AUD267 million. This suggests increased liquidity.
Past five years, 12 months ended Aug 12 (AUD million)
YearAverage Daily Turnover
2020267.0
2019204.4
2018189.7
2017200.8
2016195.4


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 (%)
Capital Gain/Loss from n Years Ago to n-1 Years Ago: Capital Gain or Loss over 1 Year/Price 1 Year Ago (%)
Cash/MCap: Cash plus Liquids/Market Capitalisation (times)
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
PV1000: Present value of 1000 invested 1 year/'n' years ago
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
TTM: Trailing 12 Months
Volatility: Highest Price minus Lowest Price/Lowest Price (%)
Volume Index (VI): Number of shares traded in the period/Average number of shares traded for the period
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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