16 September, 2019 (16:00:00 AEST)
CSL drops to one-month low on firm volume
CSL Limited (ASX:CSL), Australia's largest Pharmaceuticals & biotechnology company by market cap, traded at its 28-day low of $A227.34. CSL's stock price has decreased 31.0c (0.1%) from its previous trading session to close at $A230.38. Compared with the All Ordinaries Index which rose 4.9 points (0.07%) in the day, the relative price change was -0.2%. The fall was exacerbated by firm volume of 1.1 times the average daily volume of 771,054 shares. There were 884,777 shares worth $A203.8 million traded today.
The shares decreased 1.1% in the 4 trading sessions since the ex-dividend date of September 10. The company paid a dividend of $A1.48 per share. Based on dividends of $A2.68 per share for the trailing twelve months and the last price of $A230.38 the dividend yield is 1.2%.
Highlights in today's Report:
SECTION 1 TODAY'S BEARISH SIGNALS
SECTION 4 ONGOING BULLISH PARAMETERS
SECTION 6 SUMMARY FINANCIALS
|Description||Value||Rank In Market|
|Dividend Yield %||1.2||In Bottom 7%|
|Price/Earnings||37.3||In Bottom Quartile|
|Price/Earnings/Growth||3.4||In Bottom Quartile|
|Price to Sales||8.4||In Bottom Quartile|
+ CSL drops on high volatility: Since the start of trading its volatility (highest price minus lowest price/lowest price) of 1.7% was 0.9 times the average daily volatility of 1.8%, up from 1.6% on Friday and 1.4% on Thursday.
+ CSL Limited is placed 1007/1315 in BuySellSignals' ranking of Australian performers in the past week, a percentile ranking of 24.
+ In the past week, volume was 1.1 times average and the shares were down 3.2%. Monday's close price is at a 0.5% discount to its 5-day Volume Weighted Average Price (VWAP) of $A231.57.
+ The price decreased 0.9% in the past month. The fall was on volume of 1.1 times average for month.
+ The present value of $US1,000 (PV1000) invested one month ago in CSL is $A997, comprising a capital loss of $A9 and dividend reinvested of $A6.
Slipping Relative Strength (1mo, 3 mo):
+ In the Australian market of 1,433 stocks and 26 units traded today, the stock has a 6-month relative strength of 68 which means it has outperformed 68% of the market.
+ Also, the relative strength percentile is slipping at 60 for 3 months and 39 for 1 month.
SECTION 2 CSL BULLISH SIGNALS2.1 Undervaluation [compared with sector average]:
+ Earnings yield of 2.7% is 2.2 times the 10-year bond yield of 1.23%.
Price/Moving Average Price and MACD:
+ The Price/MAP of 1.13 for CSL is higher than the Price/MAP for the All Ordinaries Index of 1.08.
+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 233.36 minus the 26-day EMA of 231.95 is positive suggesting a bullish signal.
+ The price to 50-day EMAP ratio is 1.0, a bullish indicator. In the past 50 days this ratio has exceeded 1.0, 45 times suggesting further upside. The 50-day EMAP has increased to $A227.60. An increase is another bullish indicator.
+ The price to 200-day MAP ratio is 1.13, a bullish indicator. In the past 200 days this ratio has exceeded 1.13 44 times suggesting further upside. The stock is trading above both its MAPs and the 50-day MAP of $A227.88 is higher than the 200-day MAP of $A203.29, a bullish indicator. The 200-day MAP has increased to $A203.29. An increase is another bullish indicator.
2.3 High Price Performance Indicators and rank of CSL in the Australian market:
|Description||CSL Value||Rank In Market|
|MCap||$A104.4 billion||In Top 1%|
|Today's Trading Turnover||$A203.8 million||In Top 1%|
|Volatility %||1.7||In Top Quartile|
|Price/MAP200||1.13||In Top Quartile|
RECAP FROM PREVIOUS REPORTS (UPDATED AT THE LAST PRICE OF $A230.38):
SECTION 3 THE PAST WEEK3.1 Snapshot: CSL stock was down $US7.69 or 3.2% in the past week. Volume in the week was 1.1 times average trading of 3.9 million shares. It underperformed the All Ordinaries index in 5 out of 5 days.
|Day||CSL||Close price [AUD]||Price change %||Relative change %||Comment|
|Friday||In its biggest weekly loss in 1 month||230.69||-0.4||-0.6|
|Thursday||Increases strengthening above moving average price||231.6||0.1||-0.1||Top Rise|
|Wednesday||Drops to 22-day low on firm volume||231.44||-0.7||-1.0||VI*=1.2|
|Tuesday||Down 3.7% in 2 days||233.0||-2.1||-1.7||Steepest Fall|
|Monday||Loses $A1.1 billion in MCap||238.07||-1.0||-1.2|
+ CSL is at a discount of 4.2% to its 12-month high of $A240.61 on September 06. It is also at a premium of 34.8% to the 12-month low of $A170.89 on November 21, 2018.
SECTION 4 ONGOING BULLISH PARAMETERS4.1 Performance:
+ Return on Equity 36.5% [19.0%].
+ Return on Assets 15.6% [9.2%].
+ Return on Capital Employed 23.1% [14.6%].
+ Net profit margin has averaged 21.8% in the last 3 years. This is considered superior and suggests a high margin of safety.
+ Year-on-Year Earnings Growth of 11% [2.3%].
4.3 Low Debt Indicators:
+ Total Liabilities/EBITDA of 3 is comfortably below the Joseph Piotroski benchmark of 5.
4.4 High Performance Indicators and rank of CSL in the Australian market:
|Description||Value||Rank In Market|
|Return on Equity [ROE] %||36.5||In Top 4%|
|Return on Assets [ROA] %||15.6||In Top Quartile|
4.5 Past 5 years Annual EPS growth:
|Annual Report||EPS ($US)||Growth %|
4.6 Moving Annual Return (Past 5 years)
Based on a dynamic start date of 5 years ago, the real rate of return has averaged 30.8%. The Moving Annual Return has consistently exceeded 11%.
|CSL||Close (AUD)||Dividends (AUD)||Capital Gain %||% Yield||Annual Return %|
|1 Yr ago||208.41||2.28||61.4||1.8||63.2|
|2 Yrs ago||129.1||2.64||34.2||2.7||36.9|
|3 Yrs ago||96.21||1.7||14.3||2||16.3|
|4 Yrs ago||84.17||1.64||23.5||2.4||25.9|
Close 5 years ago $A68.18
4.7 Increased VWAP
Past five years, 12 months ended Sep 16 (AUD)
|Year||High Price||VWAP||Low Price|
4.8 Increased Average Daily Turnover
Past five years, 12 months ended Sep 16 (AUD million)
|Year||Average Daily Turnover|
4.9 Increase in Insider Buying
In the past 4 years a total of 87,528 CSL shares worth $US11.1 million were bought by insiders. Based on a dynamic start date of 4 years ago, insider buying has averaged 21,882 shares per year. In the past year, insiders bought 31,005 shares, an increase of 470.6% from the previous year.
4.10 Turnover Rate & Turnover Period:
+ The turnover rate in the 12 months to date was 37.1% (or a turnover period of 2 years 8 months). The average length of ownership of the stock is 1.6 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 PARAMETERS5.1 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.
|Description||Value||Rank In Market|
|Debt to Equity||0.9||In Bottom Quartile|
5.2 Declining ADVT past five years
Avg. Daily Volume Traded 12 months ended Sep 16, thousand shares
SECTION 6 CSL SUMMARY FINANCIALS6.1 Dividend History
Trailing 12 months dividend for the 12 months ended September 16 has improved from $US1.64 in 2015 to $US2.68 in 2019; there were 1 decline in the past 5 years. Dividends were up 17.4% for the 12 months ended September 16 from $US2.28 in 2018 to $US2.68 in 2019.
6.2 Financials Summary
|Year ended||Jun 2019||Jun 2018||Jun 2017|
|Sales (USD B)||8.5||7.9||6.9|
|Pretax (USD B)||2.3||2.3||1.7|
|Net (USD B)||1.8||1.7||1.5|
+ Earnings Per Share (EPS) was up 11% from $US3.82 to $US4.24.
6.3 Annual Report: Key Parameters
FY2019 Annual Report: CSL EPS Growth slows to 11%
CSL (ASX:CSL), announced EPS of $US4.24 for the year-ended 30 June 2019, up 11% 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 29.9%.
|Period-ended||EPS in $US||EPS growth %|
|30 June 2019||4.24||11|
|30 June 2018||3.82||29.9|
Major changes compared with previous year:
- 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 $US4.24
- Debt to Equity down 17.6% from 1.1 to 0.9
- Total non-current assets to Total Assets up from 53.7% to 55%
- Fixed Assets to Total Assets up from 33% to 36.4%
- Total Liabilities to EBITDA of 3.0 compares favourably with the Joseph Piotroski benchmark of <5. However, it has deteriorated by 3.1% from the previous year's ratio of 2.9.
- Total Liabilities to Operating Cash Flow of 4.3 compares favourably with the Joseph Piotroski benchmark of <4. However, it has deteriorated by 22.2% from the previous year's ratio of 3.5.
- EBIT Margin down from 30.1% to 28.5%
- EBIT to total assets down from 21.2% to 19.0%
- Profit before tax to Sales down from 30.1% to 28.5%
- Sales and marketing expenses to Sales up from 10.4% to 10.6%
- Administration expenses to Sales up from 6.8% to 7%
- Current ratio down 3.1% from 2.6 to 2.5
- Working capital to total assets down from 28.6% to 27.2%
- Total current assets to Total Assets down from 46.3% to 45%
- Total revenue to total assets steady at 0.7
- Cost of Goods Sold to Sales down from 46.5% to 45.8%
- Total liabilities to Total assets steady at 0.6
- Retained earnings to total assets steady at 78.1%
- Current Inventory to Total Assets down from 25% to 24.7%
- Intangibles to Total Assets down from 16.7% to 15.3%
Annual Report [Year-on-year comparison: 2019 vs 2018]
|Company Name : CSL Limited (CSL)|
|Description||$US m||$US m||(%)|
|Sales Revenue||8,205.4||7,587.9||Up 8.1|
|Total Revenue||8,538.6||7,915.3||Up 7.9|
|Pre-Tax Profit/(Loss)||2,341.1||2,281.2||Up 2.6|
|Profit/(Loss) after Tax||1,816.8||1,661.6||Up 9.3|
|Working Capital||3,351.9||3,079||Up 8.9|
|Current Assets||5,540.1||4,993.7||Up 10.9|
|Current Liabilities||2,188.2||1,914.7||Up 14.3|
|Shareholders' Funds||5,251.3||4,079.9||Up 28.7|
|Total Liabilities||7,063.1||6,694.6||Up 5.5|
|Total Assets||12,314.4||10,774.5||Up 14.3|
|Current Debt||420.6||225.7||Up 86.4|
|Non-Current Debt||4,242.2||4,160.6||Up 2|
|Total Debt||4,662.8||4,386.3||Up 6.3|
|Operating Cash Flow||1,644.4||1,902.1||Down 13.5|
|Net Assets||5,251.3||4,079.9||Up 28.7|
|Net Tangible Assets||3,373||2,277.4||Up 48.1|
Year-on-year comparison of Per Share figures
|June 30||2019||2018||Change (%)|
|EPS Final||4.2||3.8||Up 11|
|EPS Growth Factor*||1.18|
Year-on-year comparison of Performance Ratios
|June 30||2019||2018||Change (%)|
|Return on Equity (%)||36.5||42.4||Down 13.9|
|Return on Assets (%)||15.6||16||Down 2.5|
|Total debt to net tangible assets (%)||138.2||192.6||Down 28.2|
|Total Liabilities to Operating Cash Flow||4.3||3.5||Up 22.2|
|Total Liabilities/Total Assets (Down 8.1% from 0.62 to 0.57)||0.6||0.6||Down 8.1|
|Current Ratio||2.5||2.6||Down 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 $US1.7B. Compound Annual Growth Rate (CAGR) averaged 10.3% for Total Revenue, 13.5% for Net Profit and 12.9% for EBITDA.
|Description||Annual ($US B)||3-year Avg ($US B)||3-year CAGR %|
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 %)
|Operating Profit Margin||28.5||27.6|
|Net Profit Margin||23.4||21.8|
|Return on Equity||36.5||40.4|
|Return on Assets||15.6||15.4|
|Return on Capital Employed||23.1||23.8|
6.4 Half-Yearly Report: Key Parameters
Interim Report (Half Year) Analysis H2 2018: CSL EPS Growth slows to 6.7%
CSL (ASX:CSL), announced EPS of $US2.56 for the half year-ended 31 December 2018, up 6.7% from $US2.4 in the previous half year-ended 31 December 2017. EPS growth from the half year-ended 31 December 2016 to the half year-ended 31 December 2017 was 35.6%.
Compared with the previous corresponding period [PCP; H/31 Dec 2017], year-over-year [y.o.y.] Revenue was up 8.6% and Net Profit was down 2.9%.
|Half year-ended||31 Dec 2018||31 Dec 2017|
|PCP growth in EPS %||6.67||35.59|
|PCP growth in Revenue %||8.64||12.79|
|PCP growth in Net Profit %||-2.94||36.67|
Major changes compared with previous corresponding period [Year-on-Year]:
- Total revenue up 8.6% from $US4.1b to $US4.5b
- Net profit down 2.9% from $US1.1b to $US1.1b
- EBIT to Sales down from 35.6% to 33.6%
- Profit before tax to Sales down from 35.6% to 33.6%
- Profit after tax to Sales down from 27.5% to 24.6%
SECTION 7 CORPORATE PROFILE7.1 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 453,256,343 issued shares the market capitalisation is $A104.4 billion.
7.4 Vanguard Total World Stock ETF 7636:
The stock was one of 7636 global stocks selected by Vanguard Total World Stock ETF (VT) who bought 386 shares in the period Jun 30, 2019 to Jul 31, 2019 worth $US86,301 at an estimated Volume Weighted Average Price (VWAP) of $US223.5787. As at Jul 31, 2019, the Vanguard Total World Stock ETF held 149,786 shares worth $US23,096,130 or 0.13% by value of the ETF's portfolio [Ranked 113 out of 7636 by value and 3 out of 243 for Australia].
Contact: (03) 9389 1911
Physical Address: 45 Poplar Road, PARKVILLE, VIC, AUSTRALIA, 3052
Exchange: Australian Securities Exchange
Business Sector: Pharmaceuticals & Medical Research
Industry Group: Pharmaceuticals
Economic Sector: Healthcare
AU:CSL; ASX:CSL; AX:CSL; CSL.AX
Csl Limited, Csl Ltd
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