Two Stocks With Significant Movement – Fresnillo And Unilever

  • Mar 12, 2019 GMT
  • Team Kalkine
Two Stocks With Significant Movement – Fresnillo And Unilever

Fresnillo (FRES)

Holding company Fresnillo Plc, along with its subsidiaries engaged in the business of mining, beneficiation and distribution of non-ferrous metals. It has six operating mines. Its subsidiaries are Mineral Fresnillo S.A. de C.V, Miner Penmont, Minera Saucito and Fresbal investments Ltd. The Company is headquartered in Mexico, and its shares are listed on the London Stock Exchange.

On 26th February 2018, the company reported its full-year final results for the period ended December 31, 2018, total revenue surged to $2,103.8 million, an increase of 0.5% against the FY17 revenue. On January 23, 2019, the company reported its Q4 FY18 report for the three months ended December 31, 2018. In FY18, Gold and Silver production was increased by 1.3% and 5.3% respectively. On January 09, 2019, Company appointed Andre Sorgarret Larroquete as new Chief Operating Officer.

Financial Highlights– FY18

For FY18, adjusted revenue stood at US$2,243.4 million, reported an increase of 0.5% compared with the revenue of US$2,233.2 million in FY17, mainly on account of lower prices of Silver, Gold and Zinc. But volume growth reached to the record level during FY18. Higher stripping ratio at Herradura, increased costs and marginal cost associated with higher volume manufactured has increased production cost during FY18 by 23.8%,

In the financial year 2018, Profits from continuing operations stood at $506.7 million, decreased by 28.6 per cent on account of lower gross profit and surge in administrative and exploration expenses. Total profits for the year stood at $350 million, dipped by 37.6% against last year FY17 data.

During the financial year 2018, exploration expenses stood at US$172.8 million, increased by 22.5% against the FY17.

For FY18 basic and diluted earnings per share from continuing operation stood at US$0.475 and adjusted earnings per share stood at US$0.461, both were declined by 37.6% and 29.4% respectively.

The board has recommended a final dividend of US$16.7 cents per share for FY18.

At ratios standpoint, Fresnillo EBITDA margin for H1 FY19 stood at 50.6% significantly above the industry median of 40.0% and Net Margin for H1 FY19 stood at 20.6% compared with the industry median of 12.7%. Return on equity (ROE) was broadly in line with industry median at 7.6% for H1 FY19. At leverage standpoint in terms of Debt/Equity ratio, Fresnillo debt/equity ratio for H1 FY19 stood at 0.26 as compared with the industry median of 0.52.

Conclusion

Fresnillo Plc has a strong business model, and this with strong liquidity position makes it attractive among the minerals and mining sector. Improvement in the global commodities prices will have a positive impact on the top-line and bottom line of the company. The market should keep a watch on the Fresnillo share going ahead.

Stock Price Performance

Shares of Fresnillo Plc were quoting at GBp 808.2 (as on 12-March-2019, at 12.11PM GMT), added 7 points or 0.87% against its previous day close. During the last one-year shares have registered a 52w high of GBp 1,364.50 and a 52w low of GBp 737.60. At the closing price of previous day, the stock was trading 41.22% below its 52w high price and 8.73% above its 52w low price, which indicates a downtrend in the share price. In last one-year stock has delivered a negative 35.24% return and in last one-month stock is declined by 15.285 respectively (as at Mar-11-19). At the volume standpoint, 5day average daily volume traded was 23.19% higher against the 30day average daily volume. Stock's beta of 1.77 indicates that the share is highly volatile against the benchmark index. The outstanding market capitalisation was around £5.91 billion, and a dividend yield stood at 2.61%.

Unilever Plc (ULVR)

Unilever is a giant fast-moving consumer goods company headquartered in London, the UK. Its areas of operation divided into four segments like Personal Care, Food, Home Care and refreshment. The company operates in 100 countries across the world.

On March 11, 2019, Company reported its full-year financial result for the year ended 31st December 2018.

Financial Highlights – FY18

Underlying sales grew by 3.1 per cent excluding spreads, on account of decent growth in all of its business segments like Beauty and Personal care segment increased by 3.1 per cent, Food & restaurants business grew by 2.3 per cent, and Homecare vertical grew by 4.2 per cent respectively. Company’s operating margin grew by 90 basis points to 18.4 per cent and gross margin during the year improved by 50 basis points. During FY18, total underlying sales were impacted by an adverse currency impact of 6.7 per cent and the disposal of spreads.

Free cash flow stood at €5.0 billion in FY18 was mainly affected due to currency devaluation and increased working capital including a €0.4 billion increase relating to the disposal of spreads. Net Debt stood at €20.8 billion compared with the €20.3 billion in FY17.

At ratio standpoint, EBITDA margin for FY18 stood at 21.8% relatively higher compared with the industry EBITDA margin of 17.7%, reflects operating efficiency of the company compared to its peers dealing within the same line of business. Operating margin for the same period stood at 24.6% compared with industry margin of 15.4%.

At the leverage standpoint, the company is highly financially leveraged compared with its peers in terms of Asset/Equity ratio, for FY18 Asset/Equity ratio stood at 5.14 compared with the industry median of 2.31.

Stock Performance

Shares of Unilever Plc were quoting at GBp 4,109 (as on 12-Mar-2019, at 0133PM GMT), down by 0.5 points or 0.012% lower against its previous close. During the last one-year shares have reached a 52w high of 4,503.66 and a 52w low of GBp 3,695.0. At the previous day closing price, the stock was trading 8.69% lower against its 52w high and 11.30% above its 52w low. At the simple moving average standpoint, the stock was trading below its 30day, 60day and 200day simple moving average by 0.60%, 0.28% and 1.91% respectively.

Conclusion

Unilever Plc has reported strong performance in FY18 compared to its benchmark, but because of the hyperinflationary condition in Argentina, performance got bit impacted. Going forward the company has higher potential to increase market share in Asia.

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