Trending Stocks Under Radar: BP, CYBG, FRES, JD, and AML

Trending Stocks Under Radar: BP, CYBG, FRES, JD, and AML

BP PLC (BP) is a London, the United Kingdom-based British integrated oil and gas company. It is a vertically integrated company, engaged in activities such as exploration and production of oil and natural gas to generating solar energy and marketing chemicals. The company’s operations are divided into three reportable segments being Upstream, Downstream and Rosneft.

Financial Highlights (Q2, H1 FY2019, US$ million)

(Source: Quarterly Report, Company Website)

In the first half of the financial year 2019, the company’s total revenue and other income declined by 3.35 per cent to $141,154 million as compared to $146,050 million in the H1 FY18. The underlying replacement cost (RC) profit stood at $3,870 million, against $4,178 million in H1 2018. The group’s profit for the first half in the Financial Year 2019 was $4,756 million, against $5,268 million in H1 FY18. The quarterly dividend per share of 10.25 cents was declared by the company. The net debt at the end of the H1 FY19 period stood at $46.5 billion, against $38.7 billion in H1 FY18.

Outlook

In Q3 FY19, the company’s production is likely to be lower than Q2 FY19 in the upstream segment, due to the continued maintenance activities and seasonal turnaround, including in the US Gulf of Mexico, the North Sea, and Angolo. There was also an impact of Hurricane Barry on operations in the US Gulf of Mexico. The company expects lower industry refining margins and lower level of turnaround activity in the downstream segment. In Other businesses and corporate segment, average quarterly charges (excluding non-operating items) are projected to be approximately $350 million in FY19.

Share Price Performance

Daily Chart as at 31st July 2019, after the market closed (Source: Thomson Reuters)

On 31st July 2019, BP PLC shares closed at GBX 545.70 and increased by 0.46 per cent as compared with the previous day’s closing price. Stock's 52 weeks High is GBX 603.60, and 52-weeks Low is GBX 481.35. The group’s stock beta stood at 1.39, reflecting higher volatility than the benchmark index.

CYBG PLC

CYBG PLC (CYBG) is a provider of personal and commercial banking and related financial solutions. It operates through Clydesdale Bank, Virgin Money, Yorkshire Bank, and B brands. The company offers a variety of accounts and deposits services; credit and debit cards; loans and mortgages; life and non-life insurance; corporate financing; treasury solutions; foreign exchange services; and digital banking solutions. It provides investment and pension products, wealth management, and private banking solutions.

Q3 FY19 Trading Update (as on 30th July 2019)

In Q3 FY19, mortgage book decreased by 0.2 per cent to £60.4 billion as compared to same quarter previous year, driven by the decrease in new business volumes and an increase in redemptions in the current quarter. Business lending increased by 0.5 per cent to £7.7 billion, due to a lower new business in a subdued market. Personal lending surged by 5.7 per cent to £4.8 billion, driven by an increase in the outstanding on the credit cards. Customer deposit increased by 1.8 per cent to £62.8 million. The company’s CET1 ratio surged to 14.6 per cent on 30th June 2019, due to lower asset growth in Q3 FY19.

Outlook

The company’s full-year 2019 NIM (net interest margin) is estimated at the lower end of its previously guided range of 165-170 bps. The company blamed refinancing of a large volume of mortgages. It has flagged slower mortgage growth and will tighten lending criteria. In Q4 FY19, the company is expected to recognise an estimated gain on sale of around £35 million from the disposal of 50 per cent of its interest in Virgin Money. If all the mortgages are ultimately priced lower than NIM would decline further.

Share Price Performance

Daily Chart as at 31st July 2019, after the market closed (Source: Thomson Reuters)

On 31st July 2019, CYBG PLC shares closed at GBX 172.05 and decreased by 4.364 per cent as compared with the previous day closing price. Stock' 52-week High is GBX 367, and 52-week Low is GBX 170.25. The group’s stock beta stood at 1.11, reflecting higher volatility from the benchmark index.

Fresnillo PLC

Fresnillo PLC (FRES) is a Mexico-based precious metal group, which provides mining and exploration services. The group has seven operating mines - all of them in Mexico - along with other development and exploration projects it is the world's largest primary silver producer and Mexico's largest gold producer. It develops high potential silver and gold projects into low-cost, world-class mines, with business model spanning the full mining value chain from exploration, construction and development, to mining operations.

Financial Highlights (H1 FY2019, US$ million)

(Source: Interim Report, Company Website)

In H1 FY19, the company’s adjusted revenue declined by 10.2 per cent to $1,069 million as compared with the corresponding period of the last year, due to lower volumes and lower prices. Gross profit was down by 59.1 per cent to $205.5 million against the same period in 2018. EBITDA declined by 45.7 per cent to $307.9 million from the same period in the prior year. Profit for the period 2019 stood at $70.9 million, a decrease of 69.1 per cent from the same period in 2018. From continuing operations, basic and diluted earnings per share was $9.5 cents, while adjusted EPS was $8.4 cents. Cash generated from operations (before changes in working capital) stood at $316.1 million, a decrease of 45.1 per cent against the same period in 2018. Interim dividend per share decreased by 75.7 per cent to $2.6 cents, while the interim dividend was $19.2 million.

Outlook

The guidance for total gold production was reduced by approximately 3 per cent to 880,000- 910,000 ounces, driven by the lower volumes of ore processed at the DLP and delayed in the construction of a leaching pad at Herradura. The guidance for total silver production was pruned around 5 per cent to 55 million-58 million ounces, driven by the lower ore grades. The company said that 2019 would be an overall challenging year.

Share Price Performance

Daily Chart as at 31st July 2019, after the market closed (Source: Thomson Reuters)

On 31st July 2019, Fresnillo PLC shares closed at GBX 601 and declined by 8.048 per cent as compared to the previous day’s closing price. Stock's 52 weeks High is GBX 1,037 and 52-weeks Low is GBX 599.20. The group’s stock beta stood at 1.58, reflecting higher volatility compared to the benchmark index.

JD Sports Fashion PLC

JD Sports Fashion PLC (JD) has a chain of retail stores which sell branded leisurewear. The group's business is divided into two segments: Sports Fashion and Outdoor. Its sports fashion segment features brands like Chausport, Getthelabel.com, Kukri Sports, Scotts, JD Gyms, Nicholas Deakins, Sprinter, Source Lab, Tessuti, Cloggs, and Kooga. Its outdoor segment comprises of brands like Tiso, Millets, Blacks, and Ultimate Outdoors.

Financial Highlights (FY2019, £ million)

(Source: Annual Report, Company Website)

The company’s total revenue increased by 50 per cent to £4,717.8 million in FY2019 as compared to the previous year data. Total gross margin decreased to 47.5 per cent against the 48.4 per cent in FY18, due to the lower margin in the sport zone businesses and lower margins of the acquired finish line. Operating profit, before exceptional items, rose by 17 per cent to £361.5 million compared to the prior year data. Group profit before tax climbed by 15.4 per cent to £339.9 million as compared to the prior year. The basic earnings per share surged by 13 per cent to 26.90 pence as compared to 23.83 pence in FY18.

Outlook

The forecast of UK sales is to hold steady, and an improvement in US margins is estimated as last year’s Finish Line acquisition begins to benefit from store conversions and better buying. The risks associated with the current uncertainty around international trade and the UK’s decision to leave the EU are included under political and economic factors. The market has underestimated its international expansion potential and the margin recovery opportunity for Finish Line business in the US, which is its calculated move.

 Share Price Performance

Daily Chart as at 31st July 2019, after the market closed (Source: Thomson Reuters)

On 31st July 2019, shares of JD Sports Fashion PLC closed at GBX 649.80 and increased by 0.216 per cent as compared with the previous day closing price. Stock's 52 week High is GBX 651.48, and 52-week Low is GBX 318.50. The group’s stock beta stood at 0.68, reflecting lower volatility than the benchmark index.

Aston Martin Lagonda Global Holdings PLC

Aston Martin Lagonda Global Holdings Plc (AML), headquartered in Gaydon/UK, is a leading luxury brand focused on the design, engineering and manufacturing of luxury sports cars. It was formed post-merger of Aston Martin and Lagonda. The company creates and exports cars in 53 countries around the world. The company is having four regional offices located in the Asia Pacific, China, Europe and the Americas.

Financial Highlights (H1 FY2019, £ million)

(Source: Interim Report, Company Website)

Total revenue declined by 4 per cent to £407.1 million in H1 2019 against £424.9 million in H1 FY18, due to fewer specials and Vantage drove a lower Average Selling Price (ASP). Adjusted EBITDA stood at £22 million, a decrease of 79 per cent from the same period in 2018, while adjusted EBITDA margin was 5 per cent. Loss before tax was £78.8 million, a decrease from the profit of £20.8 million in H1 FY18. Diluted loss per share stood at 28 pence against the 4.3 pence in H1 FY18. Net cash from operations stood at £21 million due to planned £71 million inventory build-up and substantial reversal of around £90 million receivable from December 2018. Net debt stood at £732 million.

The company operates in a challenging environment which requires continuous investment, sometimes at the cost of profitability, to stay ahead of competitors. The company’s operations are affected by the uncertainty created due to ongoing Brexit, which is expected to hamper the company’s supply chain.

Share Price Performance

Daily Chart as at 31st July 2019, after the market closed (Source: Thomson Reuters)

On 31st July 2019, shares of Aston Martin Lagonda Global Holdings PLC closed at GBX 498 and declined by 12.324 per cent as compared to the previous day’s closing price. Stock's 52 week High is GBX 1,920, and 52-week Low is GBX 440.50.

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