Insights for March 2016

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We reiterate ‘Hold’ on Right move PLC and revise the target price from 4239 p to 4200p. In our last insight on Rightmove PLC , last month, we had given the target price of 4239 p. Post our insight, the stock had made the lows of 3400 p and after consolidating at 3400 pence, it had risen back to 4139 pence. The stock finished trading on the London stock exchange at 3931 pence on 15th March 2016.  Based on earnings estimates for the company's fiscal year ending in December 2017, the stock has a price-to-earnings ratio of 26.71 which is quite high compared to FTSE100 12 month forward P/E of 13.37. The stock has a trailing price to earnings of 37.4. Based on the analysis of forward P/E compared to FTSE 100 the stock seems slightly overpriced.  Based on the technical analysis, the stock is trading above 20 days, 50 days and 100 days moving average of 3846p, 3833p and 3883p respectively. Technically, we see the stock hovering in the range of 3734 p to 4130 pence. Any breakout above 4130 pence indicates new highs and any breakdown below 3734p indicates another lows. Therefore, the traders and investors shall watch these levels carefully.

2015 Fiscal results highlights: (Read more)

Other Insights on Related Shares: RMV.L
Posted by MaxMarioni on 20 March 2016, 7:00 PM

A budget for Investors

A raft of measures unveiled in the 2016 budget is set to benefit investors in UK equities and have the potential to shift investing patterns on the LSE in the coming weeks. The main measure will concern changes to the way capital gains will be calculated, which is the tax investors pay on gains made by selling shares as a proportion of the value increase accumulated since buying shares. The basic rate of capital gains tax will fall from 18% to 10% from April this year, while the higher rate will fall from 28% to 20%. Translating with a practical example, for a £10,000 gain (above the £11,100 tax-free allowance) a basic-rate taxpayer would with the current system be left with £8,200 after tax, and a higher-rate or additional-rate taxpayer with £7,200. Under the new rules, the basic-rate taxpayer would be left with £9,000 and the higher (or additional) rate taxpayer with £8,000. (Read more)

Posted by ShrutiAggarwal on 19 March 2016, 6:37 AM

Rolls Royce, A Value Buy

We reiterate ‘Buy’ on Rolls Royce and revise the target price from 851 p to 875p. In our last insight on Rolls Royce in December 2015, we had given the target price of 851 pence. The stock surged by 40% to the high of 725 pence, post December 2015. Currently the stock is trading above its 20 days, 50 days and 100 days moving average of 656p, 590p and 602 p respectively. The stock finished trading on London Stock exchange on 8th March 2016 at 706p. Based on earnings estimates for the company's fiscal year ending in December 2017, the stock has a price-to-earnings ratio of 9.7 which is slightly low compared to FTSE100 12 month forward P/E of 13.37. After a spectacular rally of 20%, the stock might head for a small correction. However, the stock is clearly a ‘Buy on dips’ and any small correction makes its valuations even more attractive. In the terms of technical analysis, the stock might come down to 653 pence, which is also a potential support for the stock in the short term. The traders would need to get cautious, if the stock breaks the level of 653 pence. The stock is facing resistance at 725 p, any breakdown above 725 p ensures new highs for the stock.  Therefore, the stock shall be range bound between 650 pence to 750 pence in the coming months.

2015 Fiscal results highlight: (Read more)

Topics: Analysis
Other Insights on Related Shares: RR..L
Related Shares: Rolls-royce Share Price
Posted by MaxMarioni on 14 March 2016, 7:41 AM

Not Going Home: HSBC and its Pivot to Asia

Investors were expecting more, in the week after the Hong Kong and Shanghai Banking Corporation – HSBC - made its final decision known regarding whether to stay in the UK or return to Hong Kong, the city where it was based until 1990. The announcement that it would continue to have its legal headquarters in the UK, with the regulatory and fiscal repercussions this would entail, was saluted by the markets, which didn't make them less inclined to forgive what have been widely interpreted to be disappointing earnings. (Read more)

Other Insights on Related Shares: HMUS.L, HSBA.L
Posted by ShrutiAggarwal on 4 March 2016, 7:33 AM

A sell with a downside of upto 10%

BP PLC is a ‘Sell’ at the current price levels considering the company’s performance in the fiscal year 2015 as lately the company has reported weak full year 2015 results. The stock prices have tumbled a lot post November 2015, falling from 411 pence to making a low of 309 pence on Thursday 11th February 2016. Based on the technical analysis also we see the stock clearly trading on ‘downward trend line’ which clearly indicates the bearish pattern of the stock and says that currently ‘Bears’ are in charge, outweighing the ‘Bulls’. On the announcement of fiscal 2015 results the stock prices crashed by nearly 23% in 5 to 6 trading sessions. Clearly investors’ sentiments got dampened witnessing the weak fiscal 2015 results.

The company reported a topline of $222.894bn in FY15 (FY14: $353.568 bn), a year on year fall of 37%. Also, the company reported operating loss of $7.918 bn compared to the operating profit of $6.412 bn in FY14. However, the company’s underlying replacement cost profit was also 51% lower compared to fiscal 2014, on account of weaker upstream environment. The main reason behind the weak results was falling crude oil prices. We mentioned in our last article as well that the turbulent oil prices has been a challenge for the oil and gas giant and the same gets validated by the weak 2015 results. Also, in the near future we don’t see any stability in the oil prices as volatility in the oil prices is expected to continue in the fiscal 2016 as well. Therefore, the investors should wind up or liquidate their positions in BP PLC and stay away from the stock, at least for the time being. Though stock prices have tumbled a lot in the last 4 months, still we don’t see any consolidation at the current price levels and expect the ‘free-fall’ to continue in the near future as well. (Read more)

Topics: Analysis

Centrica PLC is a compelling buy with an upside of upto 30% from the current levels. The stock finished trading on London Stock exchange on Wednesday 2nd March at 218 p a share. The stock has been trading in a range of 182p-290p in the last one year. In terms of technical outlook, the stock has been trading above 20 days, 50 days and 100 days moving average of 201p, 205p and 212 p respectively. If the stock manages to break 218 levels, it may start trading in the range of 218p-240p. Therefore, the traders need to watch the prices of Centrica PLC, as the stock might be set to breakout at the current levels. Based on earnings estimates for the company's fiscal year ending in December 2017, the stock has a price-to-earnings ratio of 11.20 which is slightly low compared to FTSE100 12 month forward P/E of 13.37. The analysis of company’s forward price to earnings compared to the index FTSE100 clearly indicates that the stock is undervalued at the current price.

2015 fiscal results highlight: (Read more)

Topics: Analysis
Other Insights on Related Shares: CNA.L
Related Shares: Centrica Plc Share Price