13 November, 2019 (16:00:00 AEST)

CSL increases strengthening above moving average price


CSL Limited (ASX:CSL), Australia's largest Pharmaceuticals & biotechnology company by market cap, has increased 40.0c (0.1%) from its previous trading session to close at $A266.91. Compared with the All Ordinaries Index which fell 51.5 points (0.8%) in the day, the relative price increase was 0.9%. The volume was 0.9 times the average daily trading volume of 757,493 shares. The 200-day Moving Average Price (MAP) is $A216.35, up from $A215.98 on Tuesday. The price to MAP ratio is 1.23. There were 655,777 shares worth $A175 million traded today.

Stock Summary
CurrencyAustralian Dollar (AUD) 1 AUD = 0.69 USD
Today's close (AUD)266.91
52-Week Range (AUD)170.9-271.0
SectorPharmaceuticals & Biotechnology sector
Shares Outstanding453,868,398
Market Cap$A121.1 billion ($US83 billion)


Highlights in today's Report:

SECTION 1 TODAY'S BULLISH SIGNALS

SECTION 2 TODAY'S BEARISH SIGNALS

RECAP FROM PREVIOUS REPORTS (UPDATED AT THE LAST PRICE OF $A266.91):

SECTION 3 THE PAST WEEK

SECTION 4 ONGOING BULLISH PARAMETERS

SECTION 5 ONGOING BEARISH PARAMETERS

SECTION 6 SUMMARY FINANCIALS

SECTION 7 CORPORATE PROFILE

SECTION 1 CSL BULLISH SIGNALS

1.1 Undervaluation [compared with sector average]:
Earnings Yield
+ Earnings yield of 2.3% is 1.8 times the 10-year bond yield of 1.28%.

1.2 Short Selling:
+ The current short volume is 0.3 times its own historical average of 0.03%. It dropped 3.3% from the previous day, plummeted 53.4% from a week ago and plummeted 49.1% from a month ago, a significant bullish indicator.

1.3 Uptrend:
Price/Moving Average Price and MACD:
+ The Price/MAP of 1.23 for CSL is higher than the Price/MAP for the All Ordinaries Index of 1.06.
+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 261.53 minus the 26-day EMA of 255.38 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 $A247.85. An increase is another bullish indicator.
+ The price to 200-day MAP ratio is 1.23, a bullish indicator. The stock is trading above both its MAPs and the 50-day MAP of $A245.32 is higher than the 200-day MAP of $A216.35, a bullish indicator. The 200-day MAP has increased to $A216.35. An increase is another bullish indicator.
Past Week:
+ CSL Limited is placed 288/1377 in BuySellSignals' ranking of Australian performers in the past week, a percentile ranking of 79.
+ In the past week, volume was 0.9 times average and the shares were up 3.3%. Wednesday's close price is at a 0.5% premium to its 5-day Volume Weighted Average Price (VWAP) of $A265.55.
Past Month:
+ Rises to Falls: in the past month the number of rises outnumbered falls 14:9 or 1.6:1.
+ The present value of $US1,000 (PV1000) invested one month ago in CSL is $A1,095, for a capital gain of $A95.
PV$10001-week1-month1-year
CSL.ASX1,0331,0951,453
All Ordinaries Index1,0081,0041,149
Beating Relative Strength (1mo, 3 mo, 6 mo):
+ In the Australian market of 1,375 stocks and 25 units traded today, the stock has a 6-month relative strength of 80 which means it is beating 80% of the market.
+ A price rise combined with a high relative strength is a bullish signal.
+ Also, the relative strength percentile is beating at 80 for 6 months, 82 for 3 months and 83 for 1 month.

1.4 High Price Performance Indicators and rank of CSL in the Australian market:
DescriptionCSL ValueRank In Market
MCap$A121.1 billionIn Top 1%
Today's Trading Turnover$A175 millionIn Top 1%
Price/MAP2001.23In Top Quartile
Price/MAP501.09In Top Quartile
Volatility %1.7In Top Quartile

SECTION 2 CSL BEARISH SIGNALS

2.1 Overvaluation [compared with sector average]:
Dividend Yield
+ To quote Benjamin Graham: "A dividend yield of at least two-thirds the triple-A bond yield"; the stock's dividend yield is 0.8 times the triple-A bond yield of 1.3%.
+ The relative yield of CSL, defined by its yield of 1%, divided by average yield of dividend yielding stocks in the All Ordinaries Index of 4.9% is 20.4%. This suggests CSL stock is overvalued in dividend yield terms.
MCap/Total Assets
+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 6.7. Compared with the rest of the market the stock is overvalued and ranks in the bottom 9% of stocks by value of Q Ratio.

2.2 Overvaluation Indicators and rank of CSL in the Australian market:
DescriptionValueRank In Market
Dividend Yield %1.0In Bottom 5%
Price/Earnings43.2In Bottom 9%
Price/Earnings/Growth4In Bottom Quartile
Price to Sales9.7In Bottom Quartile

Overbought/Bearish Signals:
+ The Relative Strength Index (RSI) of 73.0 has penetrated the overbought line of 70, suggesting the price gain of 73.0% in the last 14 days is unusually high.
+ The Stochastic indicator of 89.7 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.

RECAP FROM PREVIOUS REPORTS (UPDATED AT THE LAST PRICE OF $A266.91):

SECTION 3 THE PAST WEEK

3.1 Snapshot: CSL stock was up $US8.41 or 3.3% in the past week. Volume in the week was 0.9 times average trading of 3.8 million shares. It outperformed the All Ordinaries index in 3 out of 5 days.
DayCSLClose price [AUD]Price change %Relative change %Comment
TuesdayLoses $A1.8 billion in MCap, steepest heavyweight fall in All Ordinaries Index266.51-1.5-1.2Steepest Fall
MondayAdds $A4.2 billion in MCap, top heavyweight rise in All Ordinaries Index270.563.52.9Top Rise
FridayIncreases strengthening above moving average price261.340.010.2Price rise on rising relative strength
ThursdayAdds $A1.3 billion in MCap, top heavyweight rise in Pharmaceuticals & biotechnology sector261.311.10.1Price rise on beating relative strength
WednesdayHits year-high 11th time in one month258.5-0.9-0.3Price rise on rising relative strength

3.2 Volatility:
+ CSL is at a discount of 1.5% to its 12-month high of $A270.98 on November 12. It is also at a premium of 56.2% to the 12-month low of $A170.89 on November 21, 2018.

SECTION 4 ONGOING BULLISH PARAMETERS

4.1 Performance:
+ Return on Equity 36.5% [17.2%].
+ Return on Assets 15.6% [8.2%].
+ Return on Capital Employed 23.1% [13.5%].
+ Net profit margin has averaged 21.8% in the last 3 years. This is considered superior and suggests a high margin of safety.

4.2 Low Debt Indicators:
+ Total Liabilities/EBITDA of 3 is comfortably below the Joseph Piotroski benchmark of 5.

4.3 High Performance Indicators and rank of CSL in the Australian market:
DescriptionValueRank In Market
Return on Equity [ROE] %36.5In Top 5%
Return on Assets [ROA] %15.6In Top Quartile


4.4 Past 5 years Annual EPS growth:
Annual ReportEPS ($US)Growth %
20194.2410.8
20183.8230.0
20172.949.3
20162.69-7.7
20152.918.3
Average Annual Compounded rate of growth in EPS for the 5 years was 9.5%. There have been four rises and one decline in the past 5 years.

4.5 Moving Annual Return (Past 5 years)
Based on a dynamic start date of 5 years ago, the real rate of return has averaged 31.7%. The Moving Annual Return has consistently exceeded 11%.
CSLClose (AUD)Dividends (AUD)Capital Gain %% YieldAnnual Return %
Nov 13266.912.6843.51.444.9
1 Yr ago1862.2832.41.634.0
2 Yrs ago140.531.7541.41.843.2
3 Yrs ago99.381.79.31.911.1
4 Yrs ago90.961.6423.12.225.3

Close 5 years ago $A73.90

4.6 Increased VWAP
Past five years, 12 months ended Nov 13 (AUD)
YearHigh PriceVWAPLow Price
2019270.98208.05170.89
2018228.47172.64135.57
2017142.63118.7888.2
2016115.69100.989.07
201595.9884.2672.42
In the past five years Volume Weighted Average Price (VWAP) has increased by 146.9% to $US208.05. Based on a dynamic start date of five years ago, there has been no decline in VWAP over the last 5 years.

4.7 Increased Average Daily Turnover
Past five years, 12 months ended Nov 13 (AUD million)
YearAverage Daily Turnover
2019157.6
2018125.3
2017108.2
2016101.0
201588.1
In the past five years, average daily share turnover has increased 78.8% to $US157.6 million. This suggests increased liquidity.

4.8 Increase in Insider Buying
In the past 5 years a total of 87,528 CSL shares worth $US11.1 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 31,374 shares, an increase of 488.3% from the previous year.

4.9 Turnover Rate & Turnover Period:
+ The turnover rate in the 12 months to date was 33.3% (or a turnover period of 3 years ). 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 5 ONGOING BEARISH PARAMETERS

5.1 High Debt Indicators:
+ 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.
DescriptionValueRank In Market
Debt to Equity0.9In Bottom Quartile


5.2 Declining ADVT past five years
Avg. Daily Volume Traded 12 months ended Nov 13, thousand shares
YearADVT
2019757.5
2018717.4
2017900.5
2016993.1
20151029.5
In the past five years, Average Daily Volume of Trading (ADVT) has decreased 26.4% to 757,493 shares.

SECTION 6 CSL SUMMARY FINANCIALS

6.1 Dividend History
Trailing 12 months dividend for the 12 months ended November 13 has improved from $US1.64 in 2015 to $US2.68 in 2019; there were no declines in the past 5 years. Dividends were up 17.4% for the 12 months ended November 13 from $US2.28 in 2018 to $US2.68 in 2019.

6.2 Financials Summary
Year endedJun 2019Jun 2018Jun 2017
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
+ Net profit was up 9.3% from US$1.7 billion in 2018 to US$1.8 billion in 2019.
+ Earnings Per Share (EPS) was up 10.8% from $US3.82 to $US4.24.

6.3 Annual Report: Key Parameters
FY2019 Annual Report: CSL EPS Growth slows to 10.8%

Release Date: September 06, 2019
CSL (ASX:CSL), announced EPS of $US4.24 for the year-ended 30 June 2019, up 10.8% from $US3.82 in the previous year-ended 30 June 2018. EPS growth from the year-ended 30 June 2017 to the year-ended 30 June 2018 was 30%.

Period-endedEPS in $USEPS growth %
30 June 20194.2410.8
30 June 20183.8230


Major changes compared with previous year:
Favourable Changes:
- Net profit up 9.3% from $US1.7b to $US1.8b
- Total revenue up 7.9% from $US7.9b to $US8.5b
- EPS up 11% from $US3.82 to $US4.24
- Debt to Equity down 17.6% from 1.1 to 0.9
- Total non-current assets to Total Assets up from 53.7% to 55%
- Fixed Assets to Total Assets up from 33% to 36.4%
- Total Liabilities to EBITDA of 3.0 compares favourably with the Joseph Piotroski benchmark of <5. However, it has deteriorated by 3.1% from the previous year's ratio of 2.9.
- Total Liabilities to Operating Cash Flow of 4.3 compares favourably with the Joseph Piotroski benchmark of <4. However, it has deteriorated by 22.2% from the previous year's ratio of 3.5.
Unfavourable Changes:
- EBIT Margin down from 30.1% to 28.5%
- EBIT to total assets down from 21.2% to 19.0%
- Profit before tax to Sales down from 30.1% to 28.5%
- Sales and marketing expenses to Sales up from 10.4% to 10.6%
- Administration expenses to Sales up from 6.8% to 7%
- Current ratio down 3.1% from 2.6 to 2.5
- Working capital to total assets down from 28.6% to 27.2%
- Total current assets to Total Assets down from 46.3% to 45%
Note:
- Total revenue to total assets steady at 0.7
- Cost of Goods Sold to Sales down from 46.5% to 45.8%
- Total liabilities to Total assets steady at 0.6
- Retained earnings to total assets steady at 78.1%
- Current Inventory to Total Assets down from 25% to 24.7%
- Intangibles to Total Assets down from 16.7% to 15.3%

Annual Report [Year-on-year comparison: 2019 vs 2018]
Company Name : CSL Limited (CSL)   
June 3020192018Change
Description$US m$US m(%)
Sales Revenue8,205.47,587.9Up 8.1
Total Revenue8,538.67,915.3Up 7.9
EBITDA2,341.12,281.2Up 2.6
EBIT2,341.12,281.2Up 2.6
Pre-Tax Profit/(Loss)2,341.12,281.2Up 2.6
Profit/(Loss) after Tax1,816.81,661.6Up 9.3
Working Capital3,351.93,079Up 8.9
Current Assets5,540.14,993.7Up 10.9
Current Liabilities2,188.21,914.7Up 14.3
Shareholders' Funds5,251.34,079.9Up 28.7
Total Liabilities7,063.16,694.6Up 5.5
Total Assets12,314.410,774.5Up 14.3
Current Debt420.6225.7Up 86.4
Non-Current Debt4,242.24,160.6Up 2
Total Debt4,662.84,386.3Up 6.3
Operating Cash Flow1,644.41,902.1Down 13.5
Net Assets5,251.34,079.9Up 28.7
Net Tangible Assets3,3732,277.4Up 48.1
AuditorErnst & young  

Year-on-year comparison of Per Share figures
June 3020192018Change (%)
Description$US $US  
Sales18.116.8Up 8
EBIT5.25Up 2.5
EBITDA5.25Up 2.5
Cash145c179.9 cDown 19.4
Working Capital7.46.8Up 8.7
Shareholders' Funds11.69Up 28.6
Total Liabilities15.614.8Up 5.4
Total Assets27.223.8Up 14.1
Non-Current Debt9.49.2Up 1.8
Total Debt10.39.7Up 6.2
EPS Final4.23.8Up 11
    EPS Growth Factor*1.18  
* EPS Growth Factor = EPS growth / Net Profit growth

Year-on-year comparison of Performance Ratios
June 3020192018Change (%)
Return on Equity (%)36.542.4Down 13.9
Return on Assets (%)15.616Down 2.5
Total debt to net tangible assets (%)138.2192.6Down 28.2
Total Liabilities to Operating Cash Flow4.33.5Up 22.2
Debt/Equity0.91.1Down 17.6
Total Liabilities/Total Assets (Down 8.1% from 0.62 to 0.57)0.60.6Down 8.1
Current Ratio2.52.6Down 3.1
Common Size Ratios by Assets %   
Total non-current assets to Total Assets 55.0 53.7 Up 2.5
Total current assets to Total Assets 45.0 46.3 Down 2.9
Fixed Assets to Total Assets 36.4 33.0 Up 10.4
Current Inventory to Total Assets 24.7 25.0 Down 1.2
Intangibles to Total Assets 15.3 16.7 Down 8.5
Common Size Ratios by Sales %   
Cost of Goods Sold to Sales 45.8 46.5 Down 1.6
Profit before tax to Sales 28.5 30.1 Down 5.2
Sales and marketing expenses to Sales 10.6 10.4 Up 2.3
Administration expenses to Sales 7.0 6.8 Up 3.2
Tax expenses to Sales (5.1) (7.3) Up 29.9


Three-year record of growth and performance:
In the last 3 years Total Revenue averaged $US7.8B, EBITDA averaged $US2.1B and Net Profit averaged $US1.7B. Compound Annual Growth Rate (CAGR) averaged 10.3% for Total Revenue, 13.5% for Net Profit and 12.9% for EBITDA.
DescriptionAnnual ($US B)3-year Avg ($US B)3-year CAGR %
Total Revenue8.57.810.3
EBITDA2.32.112.9
Operating Profit2.32.112.9
Net Profit1.81.713.5

Three-year record of EBITDA, Operating Profit, Net Profit, ROE, ROA and ROCE
In 2019 Net Profit Margin of 23.4% was above its 3-year Avg of 21.8% (All Figures in %)
Description20193-year Avg
EBITDA Margin28.527.6
Operating Profit Margin28.527.6
Net Profit Margin23.421.8
Return on Equity36.540.4
Return on Assets15.615.4
Return on Capital Employed23.123.8

SECTION 7 CORPORATE PROFILE

7.1 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.

7.2 Top Management
The chief executive officer is Paul Perreault and the chief financial officer is David Lamont.

7.3 Issued Capital and MCap
Based on 453,868,398 issued shares the market capitalisation is $A121.1 billion.

7.4 Vanguard Total World Stock ETF 7627:
The stock was one of 7627 global stocks selected by Vanguard Total World Stock ETF (VT) who sold 5,940 shares in the period Jul 31, 2019 to Aug 31, 2019 worth $US-1,367,456 at an estimated Volume Weighted Average Price (VWAP) of $US230.2114. As at Aug 31, 2019, the Vanguard Total World Stock ETF held 143,846 shares worth $US22,230,191 or 0.14% by value of the ETF's portfolio [Ranked 109 out of 7627 by value and 3 out of 235 for Australia].

COMPANY IDENTIFIERS
Contact: (03) 9389 1911
Physical Address: 45 Poplar Road, PARKVILLE, VIC, AUSTRALIA, 3052
State/Province/Country: Australia
Exchange: Australian Securities Exchange

Business Sector: Pharmaceuticals & Medical Research
Industry Group: Pharmaceuticals
Industry: Pharmaceuticals
Economic Sector: Healthcare

ISIN: AU000000CSL8
AU:CSL; ASX:CSL; AX:CSL; CSL.AX
PermID: 4295856855
RIC: CSL.AX

Csl Limited, Csl Ltd

For comprehensive research on CSL 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.

Source: www.BuySellSignals.com