Source: Google Finance
So as the above chart shows from a share price perspective they are both being marked down by a similar amount. Interesting to note that they both had bigger falls the day after they released their results.
Friday, October 30, 2015
ANZ matches NAB's falls
After chewing over the ANZ results for a day it appears everyone has a bit of indigestion with the share price sliding over 3% today. Yesterday I jumped the gun by declaring that the ANZ results were being a little better received than NAB due to the more modest share price fall.
Source: Google Finance
So as the above chart shows from a share price perspective they are both being marked down by a similar amount. Interesting to note that they both had bigger falls the day after they released their results.
Source: Google Finance
So as the above chart shows from a share price perspective they are both being marked down by a similar amount. Interesting to note that they both had bigger falls the day after they released their results.
Woolworths - the day after
Plenty of doom and gloom being written up about Woolworths today. Their shares are down another 2% after yesterdays 10% slide. Plenty of analysts with "underperform" ratings.
Few points to note:
Elizabeth Knight writing for Fairfax sums it all up by saying "It is rare to see a blue-chip company – especially one with such quality assets – in such a continuous muddle.
But it is hard to see how sanity can prevail until a new chief executive is appointed, and he or she gets to place fresh eyes on the strategy, its execution and its timing."
From a charting perspective, mycharttrades has pencilled in a support line of $23. Should $23 be broken then they feel that prices will be making "lower lows."
Few points to note:
- The share price has fallen through $24 reaching an intra-day low of $23.95. This is its new 52 week low.
- Dividend yield ticking up to 5.8%.
- PE ratio around 14. Could this be a bit high considering the chaotic state of affairs?
Elizabeth Knight writing for Fairfax sums it all up by saying "It is rare to see a blue-chip company – especially one with such quality assets – in such a continuous muddle.
But it is hard to see how sanity can prevail until a new chief executive is appointed, and he or she gets to place fresh eyes on the strategy, its execution and its timing."
From a charting perspective, mycharttrades has pencilled in a support line of $23. Should $23 be broken then they feel that prices will be making "lower lows."
Thursday, October 29, 2015
Snippets of Woolworths first quarter sales
Hmmm.....how did it come to this.
Woolworths first quarter sales were pretty bleak. Or maybe "pretty bleak" is a bit too kind. As I type these words its share price is down over 9% and sliding fast. Its most recent share price low was $24.11 on September 21st. A solid rally in the last four to five weeks has all been erased.
Snippet one
Woolworths same store sales (food and liquor) down 1%
Coles same store sales (food and liquor) up 3.6%
Snippet two
Big W same store sales down 8.1%
Kmart same store sales up 8.6%
Target same store sales up 3.2%
James Thomson writing for the Financial Review summed it all up pretty well by saying "Forget restoring Woolies to its former glory for a while - the new boss's big job is just going to be restoring some positive momentum."
Coles and Aldi are also unlikely to be easing up any competitive pressure. As the quarterly sales from Wesfarmers showed all their retail brands including Target have positive sales growth and a little bit of the momentum Woolworths is missing.
Woolworths first quarter sales were pretty bleak. Or maybe "pretty bleak" is a bit too kind. As I type these words its share price is down over 9% and sliding fast. Its most recent share price low was $24.11 on September 21st. A solid rally in the last four to five weeks has all been erased.
Snippet one
Woolworths same store sales (food and liquor) down 1%
Coles same store sales (food and liquor) up 3.6%
Snippet two
Big W same store sales down 8.1%
Kmart same store sales up 8.6%
Target same store sales up 3.2%
James Thomson writing for the Financial Review summed it all up pretty well by saying "Forget restoring Woolies to its former glory for a while - the new boss's big job is just going to be restoring some positive momentum."
Coles and Aldi are also unlikely to be easing up any competitive pressure. As the quarterly sales from Wesfarmers showed all their retail brands including Target have positive sales growth and a little bit of the momentum Woolworths is missing.
ANZ full year result
Judging by the share price movements one can assume that ANZ's full year result is being received better than the NAB full year result from Wednesday. NAB is down 6% in the space of two days where as ANZ is down 2% upon the release of their results today.
Source: Google Finance
ANZ 2015 full year results at a glance:
Source: Google Finance
ANZ 2015 full year results at a glance:
- Cash earnings up 1%
- Final dividend 95c fully franked
- Return on equity 14%
Wednesday, October 28, 2015
Bank dividend yields
Yesterday we looked at the PE ratios of CBA, WBC, NAB and ANZ and noted that ANZ is lagging behind the other three. Whether it is a sign of good value or trouble ahead for ANZ is the question.
So what about their dividend yields.
Ex-dividend dates are approaching for ANZ, NAB and WBC. The traditional run-up of share price leading up to the ex-dividend date seems rather lack lustre this year. One wonders whether yields of ANZ and NAB could soon be approaching 7%.
CBA still appears to be in a class of its own. Its return on equity is still well ahead of NAB, WBC and ANZ.
So what about their dividend yields.
- ANZ 6.3%
- NAB 6.2%
- WBC 5.8%
- CBA 5.4%
Ex-dividend dates are approaching for ANZ, NAB and WBC. The traditional run-up of share price leading up to the ex-dividend date seems rather lack lustre this year. One wonders whether yields of ANZ and NAB could soon be approaching 7%.
CBA still appears to be in a class of its own. Its return on equity is still well ahead of NAB, WBC and ANZ.
NAB share snippets
NAB 2015 Full Year Results:
- Cash earnings up 2.4% adjusted for one-off items
- Net interest margins decline by 4 basis points.
- Final dividend 99c fully franked
- 80% of life insurance business sold off
- De-merger of UK banks now February 2016
NAB already has a NIM below CBA, WBC and ANZ
A fall in NIM is also expected in ANZ and WBC results.
Tuesday, October 27, 2015
What will NAB reveal tomorrow?
Full year results for NAB tomorrow (Wednesday 28th October 2015).
Should be no surprises with the dividend with it already being confirmed that it will remain at 99c fully franked.
Net interest margins and levels of bad debts will no doubt be closely scrutinised.
More interesting will be the "material transaction" to be unveiled. Various media outlets seem convinced that it will be the sale of a large part of the life insurance business which drags down the results by being too capital intensive.
And there will be more details on the spin off of Clydesdale and Yorkshire banks in the UK. With the UK economy improving one can imagine that they will be quietly confident.
Clydesdale and Yorkshire have always been blamed for NAB's chronic underperformance. As the chart below going back 15 years of CBA, NAB and S&P/ASX200 shows.
Source: Google Finance
There has been high optimism for NAB this year with Andrew Thorburn bringing about change at a rapid rate. So has this optimism been reflected in the share price? Let's look at the same chart going back only six months to April of this year. This is where the index peaked in 2015 so we are really looking at who minimised their losses the most.
Source: Google Finance
As can be seen NAB and CBA have both performed in a similar fashion losing roughly 15% since April.
The PE ratios of the big four banks also tells an interesting story. CBA, WBC and NAB all have a PE ratio of 13 to 14 where as ANZ has a PE ratio of 10.
With NAB about to say goodbye to its UK operations its PE has joined CBA and WBC.
ANZ with its vast Asian operations is trading at a discount to CBA, WBC and NAB.
Will the problems NAB has endured be ANZ's problems of tomorrow?
Should be no surprises with the dividend with it already being confirmed that it will remain at 99c fully franked.
Net interest margins and levels of bad debts will no doubt be closely scrutinised.
More interesting will be the "material transaction" to be unveiled. Various media outlets seem convinced that it will be the sale of a large part of the life insurance business which drags down the results by being too capital intensive.
And there will be more details on the spin off of Clydesdale and Yorkshire banks in the UK. With the UK economy improving one can imagine that they will be quietly confident.
Clydesdale and Yorkshire have always been blamed for NAB's chronic underperformance. As the chart below going back 15 years of CBA, NAB and S&P/ASX200 shows.
Source: Google Finance
There has been high optimism for NAB this year with Andrew Thorburn bringing about change at a rapid rate. So has this optimism been reflected in the share price? Let's look at the same chart going back only six months to April of this year. This is where the index peaked in 2015 so we are really looking at who minimised their losses the most.
Source: Google Finance
As can be seen NAB and CBA have both performed in a similar fashion losing roughly 15% since April.
The PE ratios of the big four banks also tells an interesting story. CBA, WBC and NAB all have a PE ratio of 13 to 14 where as ANZ has a PE ratio of 10.
With NAB about to say goodbye to its UK operations its PE has joined CBA and WBC.
ANZ with its vast Asian operations is trading at a discount to CBA, WBC and NAB.
Will the problems NAB has endured be ANZ's problems of tomorrow?
Monday, October 26, 2015
ANZ share snippets
The year so far...
Peaked on April 7th at $37.25
Trough on September 29th at $26.38
Source: Google Finance
Where as the S&P/ASX 200 is roughly where it started the calendar year ANZ is still down 10%.
Source: Google Finance
The 52 week range $26.38 to $37.25 - representing $11 from peak to trough is the largest range since the GFC in 2009.
Ex dividend date in a couple of weeks. Dividend yield currently 6.3% (100% franking)
Peaked on April 7th at $37.25
Trough on September 29th at $26.38
Source: Google Finance
Where as the S&P/ASX 200 is roughly where it started the calendar year ANZ is still down 10%.
Source: Google Finance
The 52 week range $26.38 to $37.25 - representing $11 from peak to trough is the largest range since the GFC in 2009.
Ex dividend date in a couple of weeks. Dividend yield currently 6.3% (100% franking)
Friday, October 23, 2015
S&P/ASX 200 weekly chart
Source: Google Finance
Snippet one
With todays gains the index is almost back to where it started the calendar year.
Snippet two
Peaked in April at 5996.
Trough early October at 4918.
Snippet three
Not that far to go to reach the mid point of the 52 week range.
Snippet four
Looks like "sell in May and go away" will ring true this year.
Thursday, October 22, 2015
Snippets of WES first quarter sales
Coles same store sales growth (food and liquor) 3.6%.
This has maintained the same growth as the previous quarter.
Snippet two
Bunnings same store sales growth 8.2%
An increase from 7.7% on the previous quarter.
Snippet three
Kmart same store sales growth of 8.6%
Up from 8% the previous quarter
Snippet four
Target same store sales growth of 3.2%
First positive growth in over a year.
- Food and liquor sales growth at Coles is being maintained.
- Business as usual at Bunnings. No signs of a slow down.
- Kmart has increased same store sales growth for five consecutive quarters. From less than 1% this time last year to 8.6% in the previous quarter.
- Target has finally achieved some sales growth. Previous four quarters has been flat to negative.
Wednesday, October 21, 2015
15 year return on WES and WOW
Yesterday we had a look at the 10 year returns on the big four banks. Today we'll go back further say to 15 years and have a look at Wesfarmers (WES) and Woolworths (WOW).
It is not really a comparison of retailer vs retailer since WES bought Coles in 2007 so has only been a retail play for half of the time frame.
Source: Google Finance
From 2004 to 2007 WOW was in a sweet spot. Markets were rising, competition from Coles was poor and their margins were world class. The share price responded accordingly.
WES bought Coles in October 2007 shortly before the GFC. As can be seen on the graph WES was belted during the GFC needing to raise significant capital where as WOW held steady for a number of years.
With the GFC over WOW has headed sideways. Times were changing and WOW no longer had the grocery market to themselves. Coles were improving, Aldi and Costco were expanding. WOW was not adapting enough to the ever changing market.
And so we get to the far right of the graph and the WOW share price is declining where as WES is holding steady. The Masters hardware venture is a disaster for WOW and same store grocery sales are in decline.
For WES their stores have run in cycles. Coles and Kmart were in the doldrums in 2007 and now show promising growth. Target was doing well in 2007 before earning its "problem child" status. Bunnings is the exception and continues to show incredible growth.
Whether the problems at WOW are structural or cyclical is the key question. It's also worth remembering that over 15 years its share price is up 270% with a lot of dividends thrown in as well.
It is not really a comparison of retailer vs retailer since WES bought Coles in 2007 so has only been a retail play for half of the time frame.
Source: Google Finance
From 2004 to 2007 WOW was in a sweet spot. Markets were rising, competition from Coles was poor and their margins were world class. The share price responded accordingly.
WES bought Coles in October 2007 shortly before the GFC. As can be seen on the graph WES was belted during the GFC needing to raise significant capital where as WOW held steady for a number of years.
With the GFC over WOW has headed sideways. Times were changing and WOW no longer had the grocery market to themselves. Coles were improving, Aldi and Costco were expanding. WOW was not adapting enough to the ever changing market.
And so we get to the far right of the graph and the WOW share price is declining where as WES is holding steady. The Masters hardware venture is a disaster for WOW and same store grocery sales are in decline.
For WES their stores have run in cycles. Coles and Kmart were in the doldrums in 2007 and now show promising growth. Target was doing well in 2007 before earning its "problem child" status. Bunnings is the exception and continues to show incredible growth.
Whether the problems at WOW are structural or cyclical is the key question. It's also worth remembering that over 15 years its share price is up 270% with a lot of dividends thrown in as well.
Tuesday, October 20, 2015
10 year return on CBA, WBC, ANZ, NAB
Most market commentary is based on the short term. Up one day, down the next or percentage returns for the year. Let's look further back... say 10 years for example.
10 years ago takes us to October 2005. GFC is still a few years off.
These are the percentage returns (excluding dividends and franking) over a 10 year period.
Source: Google Finance
Was interesting to see how they are currently nicely spaced apart.
10 years ago takes us to October 2005. GFC is still a few years off.
These are the percentage returns (excluding dividends and franking) over a 10 year period.
Source: Google Finance
Was interesting to see how they are currently nicely spaced apart.
- NAB has gone nowhere over 10 years
- ANZ is up about 25% over 10 years
- WBC is up about 50% over 10 years
- CBA is up about 100% over 10 years
Monday, October 19, 2015
BHP share price or dividend yield?
Fairfax columnist Michael Pascoe wrote an interesting piece a few weeks back with regard to the BHP dividend. As most are probably aware there is much debate surrounding their "progressive dividend policy"and the current state of commodity prices.
With the BHP share price trending down over the previous six months and management steadfastly saying that dividends will not be cut, then at some point something has to give... The share price or the dividend.
Or to quote Pascoe "Believe BHP and it is one of the great all-time buying opportunities. Believe Mr Market and that dividend is going to be reduced, meaning BHP shares might still be a reasonable buy but are not amazing."
Pascoe wrote the article on September 30 when the share price was around $22 and the dividend yield was 7.7% before franking credits. Any further falls in the share price and I think it would be a pretty safe bet to side with Mr Market.
But the passage of time has seen a small bounce (10%) in the share price up to $25 and the dividend yield consequently dropping down to 6.9%
Source: Google Finance
So maybe BHP can win over Mr Market? You be the judge and we'll take another look in a few months time.
With the BHP share price trending down over the previous six months and management steadfastly saying that dividends will not be cut, then at some point something has to give... The share price or the dividend.
Or to quote Pascoe "Believe BHP and it is one of the great all-time buying opportunities. Believe Mr Market and that dividend is going to be reduced, meaning BHP shares might still be a reasonable buy but are not amazing."
Pascoe wrote the article on September 30 when the share price was around $22 and the dividend yield was 7.7% before franking credits. Any further falls in the share price and I think it would be a pretty safe bet to side with Mr Market.
But the passage of time has seen a small bounce (10%) in the share price up to $25 and the dividend yield consequently dropping down to 6.9%
Source: Google Finance
So maybe BHP can win over Mr Market? You be the judge and we'll take another look in a few months time.
Friday, October 16, 2015
Medibank one year on.
One year anniversary of the Medibank (MPL) listing approaching. There were plenty of mumblings a year ago that the share price might struggle a bit. And it did from March through to August. Decent 25% jump in the last couple of months and a dividend as well.
Source: Google Finance
Think most people will be happy...for now.
Source: Google Finance
Think most people will be happy...for now.
Banks show steady gains after raisings.
And so Westpac (WBC) is the final of the big four to conduct their $3.5bn entitlement offer.
Surprised a few by sneaking it in before the annual results. Raising fairly small amount at offer price of $25.50 on a 1 for 23 basis.
So how are NAB, CBA and ANZ travelling after their raisings?
• NAB offer price $28.50 Currently up over 10%
• CBA offer price $71.50 Currently up over 7%
• ANZ offer price $26.50 Currently up over 8%
With sentiment in the market slowly improving one imagines demand for WBC will be fairly high.
Surprised a few by sneaking it in before the annual results. Raising fairly small amount at offer price of $25.50 on a 1 for 23 basis.
So how are NAB, CBA and ANZ travelling after their raisings?
• NAB offer price $28.50 Currently up over 10%
• CBA offer price $71.50 Currently up over 7%
• ANZ offer price $26.50 Currently up over 8%
With sentiment in the market slowly improving one imagines demand for WBC will be fairly high.
Down, down and up. Where to now for Woolworths?
Seems like sentiment with the Woolworths (WOW) share price follows the calendar months.
- Aug Down from $29 to $25
- Sept Down from $25 to $24
- Oct Up from $24 to $27
Source: Google Finance
Solid 10% gain in the last couple of weeks and dividend yield still over 5%. The troubles at Woolies are well known (Masters, BigW) but imagine Gordon Cairns is currently taking a big broom through the place. When will the new CEO be announced?
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