10 July, 2020 (16:00:00 AEST)

CSL (CSL:AUD282.37) rises for a second consecutive day, a two-day rise of 0.7%


Dateline: Friday July 10, 2020
CSL Limited (ASX:CSL), Australia's largest Pharmaceuticals & biotechnology company by market cap, has risen AUD1.62 (0.6%) for a second consecutive day on Friday. This brought its two-day rise to AUD1.87 (0.7%). Cumulative volume in the 2 days was 0.7 times the average 2-day volume of 1 million shares. CSL's stock last traded at AUD282.37. There were 589,008 shares worth AUD166.3 million traded today.

Stock Summary
Currency1 AUD = 0.69 USD Dividend Yield1%
Jul 10 closeAUD282.37SectorPharmaceuticals & Biotechnology
Ave Daily Volume1,029,703 sharesShares Outstanding453,882,387
52-Week Range212.93 - 341.18Market CapAUD128.2 billion [USD88.8 billion]
P/E46.2EPS Growth (FY2019 vs FY2018)10.8%


Financials Summary: EPS up 10.8% to USD4.24 in FY2019
+ Net profit was up 9.3% from USD1.7 billion in FY2018 to USD1.8 billion in FY2019.
+ Earnings Per Share (EPS) was up 10.8% from USD3.82 in FY2018 to USD4.24 in FY2019.
Year ended JunFY2019FY2018FY2017
Sales (USD B)8.57.96.9
Pretax (USD B)2.32.31.7
Net (USD B)1.81.71.5
EPS (USD)4.2363.8222.94

INDEX

SECTION 1 News In The Past Quarter

SECTION 2 Corporate Profile and Independent Ratings

SECTION 3 Top shareholders

SECTION 4 Today's Bullish Signals

SECTION 5 Ongoing Bullish Parameters

SECTION 6 Today's Bearish Signals

SECTION 7 Ongoing Bearish Parameters

Glossary

LINKS TO FURTHER INFORMATION ON CSL:

EXCEL TABLES ARE AVAILABLE TO EXPORT AS FOLLOWS:

+ LATEST FINANCIALS [FY 2019]:
http://www.buysellsignals.net/BuySellSignals/report/Australia/Stock/PDF/quarterly/xls/CSL_Financials.xls
+ NEWS ARCHIVES PAST 4 YEARS IN HTML
http://www.buysellsignals.net/BuySellSignals/report/Australia/Stock/Daily/Html/CSL_Corporate_Wire.html
+ 5-YEARS CATEGORISED LIST OF 20 PATENTS
http://www.buysellsignals.net/BuySellSignals/report/Australia/Stock/PDF/quarterly/xls/CSL_History_Patents.xls

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

+ Patents
+ Dividend
+ Financials H1/2019, FY 2019
+ Peer Group Analysis & Ranking
+ News Archives (Aug 2018 - Feb 2020)

http://www.buysellsignals.net/BuySellSignals/report/Australia/Stock/Daily/short/Html/595_DDR2_SR.html

SECTION 1 News In The Past Quarter

1.1 People's News
Wed Jul 01, 2020
Paul Perreault was appointed CEO of CSL (ASX:CSL) seven years ago on July 01, 2013. The present value of AUD1,000 (PV1000) invested on the appointment date is AUD5,788, for a capital gain of AUD4,194 and dividend reinvested of AUD594. In the same period the shares were up 419.4% from AUD54.8 to AUD284.4.

Wed Jun 03, 2020
Paul McKenzie was appointed COO of CSL (ASX:CSL) one year ago on June 03, 2019. The shares were up from $A202.4 to $A283.6 and the total annualized return to shareholders (TRS) since appointment is 41.6%. The present value of AUD1,000 (PV1000) invested on the appointment date is now worth $A1,416, a gain of $A401 and dividend reinvested of $A15.

Fri Apr 17, 2020
Megan Clark's performance as Chairman of CSL (ASX:CSL) is ranked in the top 6% of BuySellSignals performers for the past one year; a percentile ranking of 94.9. In the last 1 year the average annualized return to shareholders was 54.8%. The 1-year average return is ranked 2,169 out of 42,380 public companies traded globally. The present value of US$1,000 (PV1000) invested 1 year ago is now worth US$1,548; a capital gain of US$531 and dividend reinvested of US$17.

1.2 Stock Buzz
News DateHeadlinePublisher
Jun 25, 2020CSL pays $656m for haemophilia therapyAustralian Associated Press
Jun 15, 2020CSL drags ASX into negative territoryThe bull

SECTION 2 Corporate Profile and Independent Ratings

2.1 Activities
CSL Limited (CSL) is a global biotechnology company that develops and delivers innovative medicines that save lives, protectpublic health and help people with life-threatening medical conditions live full lives. The operational businesses include CSL Behring and Seqirus provides life saving products to more than 60 countries and employs 22,000 people. The Group operates predominantly in Australia, the USA, Germany, the United Kingdom and Switzerland.

2.2 Contact Details
Websitehttp://www.csl.com.au/
Physical Address45 Poplar Road, PARKVILLE, VIC, AUSTRALIA, 3052
Phone(03) 9389 1911
Fax(03) 9389 1434
Emailmark.dehring@csl.com.au

2.3 Industry & Sector
Classification LevelName of Sector
Economic SectorHealthcare
Business SectorPharmaceuticals & Medical Research
Industry GroupPharmaceuticals
IndustryPharmaceuticals

2.4 Independent Ratings
+ Newsweek 500:
CSL Limited was ranked 240 by Newsweek and Corporate Knights Capital in the World's 500 Greenest Companies 2016. It had outstanding scores of 4.7% in Carbon productivity, 2.8% in Water productivity.
+ Industryweek 1000:
CSL Limited is a new entrant in the Industry Week list of the world's largest 1000 manufacturers by Revenues in 2016, ranked 667.
+ FT 500:
It is the 334th largest by revenue in the FT Global 500.
+ Forbes 2000:
It is the 1338th largest by revenue in the Forbes Global 2000.

SECTION 3 Top shareholders

DateName of the Share Holder% of Capital
07-04-2020HSBC Custody Nominees (Australia) Limited33.7
07-04-2020J P Morgan Nominees Australia Limited18.0
07-04-2020Citicorp Nominees Pty Limited6.1
07-04-2020National Nominees Limited3.1
07-04-2020BNP Paribas Nominees Pty Ltd1.9
07-04-2020Citicorp Nominees Pty Limited i1.1
07-04-2020BNP Paribas Noms Pty Ltd1.0
07-04-2020HSBC Custody Nominees (Australia) Limited i0.6
07-04-2020Australian Foundation Investment Company Limited0.4
07-04-2020HSBC Custody Nominees (Australia) Limited ii0.3
07-04-2020Custodial Services Limited0.3
07-04-2020Amp Life Limited0.3
07-04-2020Argo Investments Limited0.2
07-04-2020Netwealth Investments Limited0.2
07-04-2020D W S Nominees Pty Ltd0.2
07-04-2020Mutual Trust Pty Ltd0.2
07-04-2020Navigator Australia Ltd0.1
07-04-2020Milton Corporation Limited0.1
07-04-2020Diversified United Investment Ltd0.1
07-04-2020BNP Paribas Noms (Nz) Ltd0.1

SECTION 4 Today's Bullish Signals

4.1 Undervaluation
Dividend Yield > Bond Yield of 0.89%:
The dividend yield of 1.03% is 1.16 times the triple-A bond yield of 0.89%. The times factor of 1.16 is above the benchmark factor of 0.67 times set by Benjamin Graham.
(All figures in %)
Dividend Yield1.03
Bond Yield0.89
Spread0.14

4.2 Other Bullish Signals
- Return on Equity of 36.5% versus sector average of 16.9% and market average of 7.9%.
- Total Liabilities/EBITDA of 3 is less than 5, this compares favourably with the Joseph Piotroski benchmark of 5.
- Return on Assets of 15.6% versus sector average of 8.1% and market average of 1.6%.
- Return on Capital Employed of 23.1% versus sector average of 13.3% and market average of 5.2%.
- Net profit margin has averaged 21.8% 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 is high at 36.5%. This is computed as net profit margin of 23.4% times asset turnover [sales/assets] of 0.69 times leverage factor [total assets/shareholders' equity] of 2.3.

4.3 Oversold/Bullish Signals:
- The stock is oversold according to the Williams % R indicator of -82.3, suggesting the price is close to its 14-day low of AUD279.0.

SECTION 5 Ongoing Bullish Parameters

5.1 Past four-years
- CSL rose for a fourth consecutive year. In the past four years it has risen AUD177.43 (169.1%).

5.2 Rank in the top 2% by Size in the Australian market
DescriptionValueRank
Ave daily TurnoverAUD166.3 millionIn Top 1%
MCapUSD88.8 billionIn Top 1%
Annual RevenueUSD8.5 billionIn Top 2%


5.3 Rank in the top 14% by Productivity in the Australian market
DescriptionValueRank
Return on Equity [ROE] %36.5In Top 4%
Return on Assets [ROA] %15.6In Top 10%
Return on Capital Employed [ROCE] %23.1In Top 14%


5.4 Annualised Period-based Total Shareholder Returns [TSR %]: The Best Periods with TSR > 24.9%
TSR %1 yr3 yrs5 yrs10 yrs
CSL.ASX31.130.929.825

5.5 Present Value of AUD1000 Invested in the Past [1 Yr, 3 Yrs]; The Best Periods with PVAUD1000 > 1,310
PVAUD1,0001 yr ago3 yrs ago
CSL.ASXAUD1,311AUD2,263
Pharmaceuticals & Biotechnology sectorAUD1,428AUD2,317
All Ordinaries IndexAUD891AUD1,047

5.6 The Best Periods [1 Yr, 3 Yrs] with Price Change % > 29.5
3-Year price change of 118.2% for CSL outperformed the change of 5.1% in the All Ordinaries index for a relative price change of 113.1%.
Price Change %Year3 Years
CSL29.6118.2
Pharmaceuticals & Biotechnology sector43130.1
All Ordinaries index-10.65.1


5.7 Moving Annual Return of 31.0% in the past year:
Moving Annual Return was 31.0% in the past year. Based on a dynamic start date of 5 years ago, the real rate of return has averaged 30%. The Moving Annual Return has consistently exceeded 14%.
CSLClose (AUD)Dividends (AUD)Capital Gain %% YieldAnnual Return %
Jul 10282.372.8929.61.331.0
1 Yr ago217.832.48131.314.3
2 Yrs ago192.721.9248.91.550.4
3 Yrs ago129.441.7223.31.625.0
4 Yrs ago104.941.7127.22.129.3

Close 5 years ago AUD82.50

5.8 Buybacks and 5-Years Decrease of 6.4% in Total Shares on Issue
In the past 5 years total shares on issue have decreased by 30.9 million (6.4%) from 483.8 million to 452.9 million. Buybacks have averaged 7.7 million shares [1.6%] per financial year. Based on a dynamic start date of 5 years ago, there have been declines in issued capital in 4 out of 5 years. A reduction in total shares on issue is a favourable indicator in Joseph Piotroski's 9 indicators.

Year End (Jun 30)Total Shares on IssueFYBuybacksBuyback %
2019452,919,4862019--
2018452,353,22120182,977,9750.7%
2017455,331,19620176,668,3771.4%
2016461,999,57320169,817,6662.1%
2015471,817,239201512,005,7012.5%
2014483,822,940201414,783,6323%
Total  46,253,351 
Average per FY  7,708,892 

5.9 Created Market Value [CMV] past 5 yrs of AUD80.7 billion
- Market Capitalization has increased by AUD87 billion from AUD41.2 billion to AUD128.2 billion in the last 5 years. This increase comprises cumulative retained earnings (RETE) of AUD6.3 billion and Created Market Value of AUD80.7 billion. The Created Market Value multiple, defined by the change in MCap for every AUD1 of retained earnings is exemplary at AUD13.73.

5.10 EPS growth [FY2019 vs FY2018] of 10.8%:
There have been four rises and one decline in the past 5 years. Average Annual Compounded rate of growth in EPS for the 5 years was 9.5%.
FYEPS (USD)Growth %
20194.2410.8
20183.8230.0
20172.949.3
20162.69-7.7
20152.918.3

5.11 A 452.8% Increase in Insider Buying
In the past 5 years a total of 87,528 CSL shares worth AUD11.1 million were bought by insiders. Based on a dynamic start date of 5 years ago, insider buying has averaged 17,506 shares per year. In the past year, insiders bought 31,084 shares, an increase of 452.8% from the previous year.
YearNo. of SharesValue, AUD
1 Yr ago31,0846,425,816
2 Yrs ago5,62383,278
4 Yrs ago50,8214,565,811
Total87,52811,074,906


5.12 Increased VWAP, up 196% in 5 years
In the past five years Volume Weighted Average Price (VWAP) has increased by 195.7% to AUD280.24. Based on a dynamic start date of five years ago, there has been no decline in VWAP over the last 5 years.
Past five years, 12 months ended Jul 10 (AUD)
YearHigh PriceVWAPLow Price
2020341.18280.24212.93
2019227.42194.28170.11
2018195.36146.2114.81
2017139.89110.1287.79
2016111.794.7781.25

5.13 Increased share turnover, up 174% in 5 years
In the past five years, average daily share turnover has increased 173.7% to AUD269.7 million. This suggests increased liquidity.
Past five years, 12 months ended Jul 10 (AUD million)
YearAverage Daily Turnover
2020269.7
2019149.1
2018106.9
2017108.1
201698.5

5.14 Satisfies four criteria of Benjamin Graham
- "An earnings-to-price yield of at least twice the triple-A bond"; the stock's earning yield of 2.2% is 2.4 times the triple-A bond yield of 0.9%.
- "A dividend yield of at least two-thirds the triple-A bond yield"; the stock's dividend yield is 1.2 times the triple-A bond yield of 0.9%.
-"Current ratio of two or more"; current assets are 2.5 times current liabilities.
-"Stability of growth in earnings over the last 5 years, defined as no more than two declines of 5% or greater in year-end earnings";there has been only 1 decline in earnings in the last 5 years.

SECTION 6 Today's Bearish Signals

6.1 Momentum Down 1.2% Past Month
In the past quarter the steepest fall of 5.1% took place in the week beginning Monday July 06.
The Worst 3 weeks in the past quarter:
Mon-FriChange %All Ordinaries index Change %RPC %Vol Ind [1 is avg]
Jul 06-10-5.1-2.1-30.8
May 25-29-5.14.7-9.82
Apr 27-May 01-4.80.5-5.20.9


6.2 Rank in the bottom 15% by Relative Valuation in the Australian market
DescriptionValueRank
Price to Sales10.5In Bottom 15%
Price/Earnings/Growth4.3In Bottom 8%
Price/Earnings46.2In Bottom 8%
Dividend Yield %1%In Bottom 5%
Price to Book Value26.6In Bottom 2%


6.3 Rank in the bottom 20% by Price Performance in the Australian market
DescriptionValueRank
1-week Price Change %5.1In Bottom 20%

6.4 Downtrend
Beta < 1 combined with price fall. The Beta of the stock is 0.7.

Negative MACD:
- The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 286.62 minus the 26-day EMA of 288.59 is negative, suggesting a bearish signal. Both the 12-day EMA as well as the 26-day EMA are falling, another bearish signal.

6.5 Overvaluation
Earnings Yield of 2.2% < Australian ave of 4.2% > Bond Yield of 0.9%:
- Earnings yield of 2.2% is less than the Australian average earning yield of 4.2%.
- The earnings yield of 2.2% is 2.4 times the 10-year bond yield of 0.9%.
(All figures in %)
Earnings Yield2.2
Australian avg4.2
Dividend Yield1.0
Bond Yield0.9

Dividend Yield of 1% < Index avg of 4.2%:
- The relative yield of the stock, defined by its yield of 1%, divided by average yield of dividend yielding stocks in the All Ordinaries Index of 4.2% is 24.7%. This suggests the stock is overvalued in dividend yield terms.
MCap/Total Assets:
- Tobin's Q Ratio, defined as MCap divided by Total Assets, is 7.3. Compared with the rest of the market the stock is overvalued and ranks in the bottom 9% of stocks by value of Q Ratio.

SECTION 7 Ongoing Bearish Parameters

7.1 Rank in the bottom 14% by Gearing in the Australian market
DescriptionValueRank
Total Debt to Equity0.9In Bottom 14%
7.2 Present Value of AUD1000 Invested in the Past 3 Months; The Worst Period with PVAUD1000 < 867
PVAUD1,0003 mo ago
CSL.ASXAUD866
Pharmaceuticals & Biotechnology sectorAUD985
All Ordinaries IndexAUD1,113

7.3 Past quarter: price fall of 13.4%
3-Month price change of -13.4% for CSL underperformed the change of 11% in the All Ordinaries index for a relative price change of -24.3%.
Price Change %Quarter
CSL-13.4
Pharmaceuticals & Biotechnology sector-0.9
All Ordinaries index11


7.4 P/E/G > 1
The price earnings ratio of 46.2 divided by trailing twelve months eps growth of 10.8% corresponds to P/E/G of 4.3 times.
EPS Growth (%)10.83
P/E/G4.3
P/E46.21

7.5 High Debt to Equity (%)
The debt to equity ratio of 88.8% is above a safe benchmark figure of 70%. However, it has improved in the past two years.
YearsDebt to Equity (%)
Jun 201988.79
Jun 2018107.51
Jun 2017125.65
Jun 2016122.44
Jun 201583.04

7.6 Declining Volume Past five Years
In the past five years, Average Daily Volume of Trading (ADVT) has decreased 0.2% to 1 million shares.
Avg. Daily Volume Traded 12 months ended Jul 10, million shares
YearADVT
20201.0
20190.76
20180.72
20170.97
20161.0

7.7 Satisfies 2 out of 9 criteria of Joseph Piotroski [pass mark 5]:
- Improvement in long-term debt to total assets from 0.3 to 0.3.
- Improvement in gross margin [from 57.8% to 58.2%].

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 (%)
Current Ratio: Current Assets/Current Liabiliites (times)
Debt/Equity: Net Debt/Net Assets %
Dividend Yield: Dividend Per Share/Share Price (%)
EBIT Margin : Earnings Before Interest and Tax/Revenue (%)
Earnings Yield: Earnings Per Share/Share Price (%)
Income during the n years (3/2/1): Dividends received during the Period
PCP: Previous Corresponding Period
PV1000: Present value of 1000 invested 1 year/'n' years ago
Price/Earnings: Share Price/Earnings Per Share (times)
Price/NTA: Closing Share Price/Net Tangible Assets Per Share (times)
Price/Sales: Share Price/Sales 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 Assets: Net Profit/Total Assets (%)
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
Total Liabilities/Total Assets: Total Liabilities/Total Assets
Turnover Rate: value of annual trading volume as a percentage of market capitalisation
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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