WM Morrisons Supermarkets is a Hold at the current level as after going through its share of correction, it seems that now the stock is ready to take off. The stock finished trading on the London Stock exchange at 235p a share on 26th September, up by 0.26% compared to the previous close. The stock confirmed the head and shoulders pattern, a few days back as it had broken the neckline at 242p and has come down up to the low of 228p respectively. However, it seems that the stock is done with its correction and has been consolidated as well. It has also breached the downward trend line and has been going up. The immediate support and resistance for the stock is at 231p and 240p respectively. In the last trading session, the stock has had made a spinning top doji candlestick pattern which indicates indecisiveness amongst the traders and investors.
Let’s throw light on the latest half yearly 2018 financial results of the company. The company announced its H1’18 results, a few days back on the September 14th. As per the results, the underlying PBT and EPS were up by 12.7% and 14.9% respectively. The company reported a free cash flow of £352m in H1’18 versus £558m in H1’17. The net debt also reduced by a further £262m to £932m since the end of 2016/17, which is within the target of the company. The management also continued maintaining its growth outlook for the company. (Read more)
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)
WM Morrison Supermarkets is a ‘Hold’ at the current levels as the stock has shown a spectacular rally in the last few trading sessions. The company announced its half yearly 2016 results a few days back on 15th September, and the investors cheered the results on the street as the stock rallied by over 4% the same day and is still rising.
The company’s chief executive, Mr. David potts commented on the results, ‘’ We are pleased with positive like-for-like sales and 11% underlying profit growth in the first half. Our priorities are unchanged. We have made improvements to the shopping trip for customers and we plan to do more. “I would like to thank the entire Morrisons team of food makers and shopkeepers who are working very hard to Fix, Rebuild and Grow Morrisons. This turnaround opportunity is in our own hands and I am confident we will succeed’’ (Read more)
Rolls Royce Plc
The technical chart of Rolls Royce suggests that the stock is all set for breakout and lately huge volumes have also been witnessed in the stock. A few trading sessions back, Rolls Royce was seen making lows at 600 pence, after a steep correction of up to 10%. However, the stock has bottomed out at 600 pence and thereafter start rising again. We expect the stock would continue to rise in the coming trading sessions and would be seen trading range bound between 630p-660p in the short term. The stock finished trading on London stock exchange at 635 p a share on 22nd June. The immediate support for the stock lies at 630p and resistance at 660p. If the stock manages to breach 660p, it may be seen heading towards 720p as well. However if the stock again goes below 630p, then it may breakdown up to 599p again. Therefore traders shall watch these levels and hedge their positions with stop loss. In the last trading session, the stock has form ‘doji’candlestick pattern which indicates slight indecisiveness amongst traders. (Read more)
Wm Morrison Supermarkets PLC is a United Kingdom-based supermarket group and has a market cap of £4.73 bn. The Company is a fresh food manufacturer in the United Kingdom. The Company owns, operates and controls its fresh food supply chain. The Company's Market Street stores include butchers, fishmongers, bakery, cake shops, greengrocers, delis, oven fresh products, fresh to Go products, flower shops and cafes. The Company also offers clothing for children, baby and adults. The Company offers lifestyle products, such as Let's Grow products, entertainment products, such as games, films and television shows, the Morrisons magazine, dry cleaning services, petrol filling stations, pharmacies, facilities for shoppers with disabilities, photo printing services and recycling services. The Company markets its products under the Morrisons brand. The Company operates around seven regional distribution centers and one national center servicing its supermarkets, and three convenience distribution centers.
The company is a ‘Hold’ at the current price levels as lately stock has rallied quite a lot , so it might head for a correction soon. The stock has been trading above its 20 day, 50 day and 100 day moving average of 200p, 189p and 100 p respectively. The stock finished trading on the London stock exchange on 7th April at 202 pence a share. Though in the last 6 to 7 trading sessions, the stock has been trading range bound between 197 p to 202 p. Therefore, the stock has started consolidating at these price levels and any breakout above 202 pence indicates new highs and any breakdown below 195pence may indicate new lows for the stock in the near term. However, based on the fundamental analysis and the valuation, we dont see any upside in the stock from the current price levels. It would be discussed in the later part of the article. Currently the stock has been trading 46% above 52 weeks low and 4% below its 52 weeks high. Out of 18 analysts, 4 analysts have rated ‘Buy’, 4 analysts have rated ‘Sell’ and 10 have rated ‘Hold’ on the company. The stock has a consensus rating of Hold and a consensus target price of 180pence. According to the data from morning star, the stock has a forward P/E of 17.9 compared to FTSE100 forward P/E of 13.37. The analysis of forward P/E of the company compared with FTSE 100 forward P/E clearly indicates that the stock is slightly overpriced. (Read more)
Supermarkets historically should have been a logical investment. Everyone needs food - supermarkets have got a lot smarter, and the general population is increasing, thereby increasing demand for food-stuffs and general groceries.
Tesco is still the largest UK grocery store, with around 28% of UK market share (as of July 2015), followed closely by ASDA (Wallmart group), and Sainsburys, each with around 16%. Morrisons follows behind with almost 11% market share. (Read more)