Insights for March 2017

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Kingfisher Plc. is a compelling ‘Buy’ at the current price as the stock is pretty undervalued. The company announced its financial year 2016-17 full year financial results last week on 22nd March. However, it seems that the results failed to cheer the investors as the stock opened gap down the same day and continued to fall! The stock finished trading on the London Stock exchange at 324.4p on 28th March, down by 0.25% compared to the previous close. Currently, the stock has been trading below its 20 day moving average (DMA), 50 DMA and 100 DMA of 334p, 332p and 342p respectively. Clearly the stock has been in the bearish trend for quite some time. However, it seems that the stock is done with its correction and is ready to consolidate now at the current levels.  The stock is having a very crucial support at 321p, any breakdown below 321p would means further downside and would also indicate that there is still some more room for correction. Therefore, traders or investors shall not hold their long positions, if at all the stock goes below 320p. The moving averages would act as a strong resistance for the stock. However, we see short term upside up to 337p in a span of 15 days to 1 month. In case, the stock pierces 337p then next target would be 350p. Also, to confirm the bull trend the stock needs to cross 332p, so traders are advised to initiate fresh longs only if the stock goes above 332p. The long term view of the stock remains bullish only as the company has strong fundamentals and financial matrix.

Now let’s throw light on the latest financial results of the company. The company’s total adjusted sales in constant currencies are up by 1.7%. The company reported FY’17 underlying pretax profit at £787m, up by 14% mainly driven by UK and Poland LFL sales growth and favorable FX movements on the translation of non-sterling retail profits. The company has also returned £430m of cash to shareholders, £230m via ordinary dividend and £200m via share buyback. As previously announced, Kingfisher disposed of a controlling 70% stake in B&Q China on 30 April 2015. On 23 March 2016 Kingfisher exercised its option to dispose of the remaining 30% economic interest, with the agreement of Wumei Holdings Inc. (Read more)

Topics: Analysis
Other Insights on Related Shares: KGF.L
Related Shares: Kingfisher Share Price

Right move Plc. is a ‘Hold’ at the current price levels as the stock would be set for upside soon. The company announced its financial year 2016 results a month back on 24th February and it has come up with impressive numbers. The stock finished trading on the London Stock exchange at 3896p a share on 22nd March, down by 0.56% compared to the previous close. The stock has been in a correction mode for quite some time but it seems that soon it would start consolidating and would be ready to rise again. Currently, the stock has been trading below its 20 day moving average (DMA), 50 DMA and 100 DMA of 3991p, 4003p and 3933p respectively. The immediate support and resistance of the stock lies at 3845p and 4065p respectively. But, in case the stock goes below 3845 as well, then it may test lows up to 3600p as well. The stock is at a very crucial point and traders shall keep an eye at the respective levels and accordingly initiate fresh longs. In case the stock sustains the support at 3845p, then traders or investors can start building fresh long positions, otherwise they should wait for its consolidation and should accordingly build their positions because the medium term to long term view of the stock is bullish. As per the technical indicator, the stock formed a ‘doji’ candlestick pattern which indicates indecisiveness amongst the traders.

Now let’s throw light on the full year 2016 financial results of the company. The company reported FY’16 revenue at £220 million, up by 15% yoy and the growth is seen across all the business segments. The underlying operating profit and underlying earnings per share are up by 15% and 18% respectively. The company reported strong growth in operating profit mainly because of cost control and organic growth. (Read more)

Topics: Analysis
Other Insights on Related Shares: RMV.L
Related Shares: Rightmove Share Price

WM Morrisons Supermarkets Plc. is a compelling ‘Buy’ at the current levels as the stock promises huge upside at the current level. In terms of valuation or fundamental analysis, the stock seems slightly underpriced at the current level and has a potential to promise lucrative returns to the investors. The stock finished trading on the London Stock exchange at 239.6p a share on 15th March, up by 1.96% compared to previous close. The stock has been in uptrend since last 3 days and it seems that the stock shall continue rising on the coming days as well. Therefore, traders or investors can initiate fresh longs at the current level for the lucrative returns. Currently, the stock has been trading above its 100 day moving average (DMA) and below 20 DMA and 50 DMA of 232p, 241p and 243p respectively. In terms of charting techniques or technical analysis, we see the stock heading towards 250p very soon. The stock might face resistance at its 20 DMA and 50 DMA respectively and the support is at 232p. However, in case the stock breaches the moving averages resistance then it may go post 250p as well. Therefore, traders need to keep a close eye at the respective levels and accordingly should hedge their positions.

Now let’s throw some light on the latest financial results of the company. However, despite the store closures, the FY’17 topline was up by 1.2% to £16.3 billion compared to £16.0 billion in FY’16. The underlying EPS was also up by 39% to 10.86p versus 7.77p last year. Also reported profit before tax was also up by 49.8% to £325 m compared to £217 million in 2016. However, the free cash flow came down to £670 million compared to £854 million last year. Good news for the investors is that the net debt also came down to almost half by £552 million versus £1194 million last year. Therefore, the retail giant came up with impressive set of numbers which further strengthen the confidence of the investors in the stock. Also, the company continued working on improving its cost efficiency which is reflected by the cost savings of up to £1.0 billion. As per the management, the company has identified further cost savings opportunities beyond £1.0 billion as well. The company’s medium term targets of £1bn improvement in working capital and at least £1.1bn of disposal proceeds also remain unchanged. The company also expects its net debt to fall to less than £1bn by the end of 2017/18. (Read more)

Topics: Analysis
Other Insights on Related Shares: MRW.L

 

The health of the housing market is a matter of contention in Britain: there are arguments among the punditry on whether the property sector is a sound investment at the moment or is at the tip of a housing bubble ready to burst. Late last year, several commercial property funds ran into trouble following brexit, having to suspend redemptions out of their funds as they bought time in which to offload their assets. The signs coming from the annual earnings of Berkeley Group (BKG.LN), one of Britain's largest publicly traded home-builders, are a tad more positive. (Read more)

Other Insights on Related Shares: BKG.L

A British advertising technology company, Ve Interactive, once taunted as an example of a rare breed of British 'Unicorns' - i.e. start-up companies with prospective values of a billion dollars or more - was revealed last week to have run into financial difficulties. Once described as worth (Read more)

Rolls Royce shall be a ‘hold’ at the current levels as the recent rally and consolidation of the stock confirms the fact that the stock has overcome the negative impact of the change in accounting standards. We stated in our last article that the fresh positions can be built in Rolls Royce, in case the stock breaches the 687p and it did pierce 687p and continued to rally. However, lately the stock has been going through a consolidation and correction mode. Therefore, once the stock is done with its correction and consolidation, fresh longs can be initiated again.

The stock finished trading on the London stock exchange at 759p a share on 6th March, down by 0.07% compared to the previous close. Currently, the stock has been trading above its 20 day moving average (DMA), 50 DMA and 100 DMA of 740p, 701p and 703p respectively. The immediate support and resistance for the stock is at 740p and 788p respectively.  In case the stock goes below 740p, then it may test the levels of 720p as well and in case of breakout above 787p, the next target for the stock could be 800p. Therefore, the traders need to keep a close eye on the respective levels and accordingly hedge or initiate fresh positions. In terms of technical analysis, the stock has been trading on an upward trend line which confirms bullishness of the stock in the short term. (Read more)

Topics: Analysis
Other Insights on Related Shares: RR..L

The value in stocks of both Deutsche Boerse and the London Stock Exchange have spiralled downwards after news broke of the likely collapse of the long planned merger between the two exchanges. The share prices of both German and British exchanges started to lose ground right from the start of the session after the LSE leadership announced that it would be “highly unlikely” that it would be able to respect the conditions imposed by the European Commission for implementing the merger with Deutsche Boerse. In particular, London has rejected a request from Brussels to split up from MTS, the Italian platform for trading in government bonds. "Given the conditions that have been placed, we will not have the go ahead from the Commission for the operation," the LSE stressed in a statement. (Read more)

Topics: brexit, LSE, Merger, Stock

Centrica Plc. is a compelling buy at the current levels. Although the stock has been in a correction mode for quite some time, but any dip in Centrica PLC is an opportunity to buy for long term. The stock finished trading on the London stock exchange at 224.5 p a share on Wednesday, 1st March, down by over 1% compared to previous close. Currently, the stock has been trading below its 20 Day moving average (DMA), 50 DMA and above 100 DMA of 230p, 229p and 220p respectively. Clearly, the stock is having a very strong support at 220p and it would be less likely that the stock would go below 220p. The immediate resistance for the stock is at 230p. In case the stock pierces 230p then it would confirm the breakout in Centrica Plc. and stock would be back to the upward trend and shall continue to rise. The company announced its financial year 2016 results on 23rd February. And the company had given a gap down opening the same day. This clearly indicates that the results failed to cheers the sentiment of the investors. However, it seems that the stock is done with the correction and is ready to bounce back.

Now let’s throw some light on the FY’16 results of the company. As per the management, the year 2016 was a year of robust growth and the company did deliver its key objectives including improved customer services and more innovative offerings and solutions. The management also stated that Centrica enters the year 2017 as a strong company and is positioned to deliver longer term returns and growth. The FY’16 adjusted profits and adjusted earnings, both were up by 4%. Also, adjusted operating cash flow is also up by 19% to £2,686m, including £357m working capital inflow in UK Business. Another good news for the investors is that the company’s net debt also came down by 27%, under £3.5bn. (Read more)