Background

Newell Rubbermaid is a company that operates in the consumer goods sector. The company works with Global Business Units, which develop world brands. Newell Rubbermaid has a wide range of products.
In Figure 1 we can see that the stock price has risen since 2011 from $12.00 to $44.00. The stock made a stable uptrend, but is currently in a correction. For mid-term traders this correction is a clear downtrend on the daily chart and this means we should get a good short opportunity right now. Especially while the overall market is still in a downtrend.
NWL_1
Management and risk description

On the daily chart (Figure 2) we can clearly see that a strong downward trend has formed, which is drawn in blue. This downtrend is supported by higher volume and currently the stock made a 80% correction with decreasing volume.
Mid-term traders could wait for a subordinate downtrend for the entry in the current correction. With increasing selling pressure the targets around $38.00, $36.50 and $34.50 could be very interesting.

Above $44,50 our short idea would be over.
NWL_2
Parameters

Entry: $43,50

Stop: $44,50

Target: $38,00, $36,50, $34,50

Time horizon: medium-term

Background and Analysis

Freescale Semiconductor, Ltd. is an American multinational Company which designs and produces Embedded-Processing solutions. In 2006 FSL agreed to a buyout by a consortium led by Blackstone Group. In 2011 FSL completed it´s IPO and is traded on the NYSE since then. In 2012 Freescale Semiconductor was bought by NXP Semiconductors (NXPI).

In the following technical analysis we will have a look on the downside-potential of FSL in a weak overall market. As you can see in figure 1, FSL is in a long-term uptrend since 2012, after the weakness in 2014, FSL made new highs in 2015 in a massive uptrend with only very small corrections. FSL developed a new all-time high on 06.01.2015 at $45.69.

Since the high in June Freescale temporarily lost around 30% of its value but in the last few weeks FSL bounced back from the low in August to $37.60 at the moment.

With the yearly high Freescale Semiconductor developed a clearly visible downtrend (figure1 red dotted line).

 

figure1

 

Trading

The actual down trend is in a correction which we want to use to enter a short trade. For entering a trade we could use a smaller down trend. The black arrows show one possible development of the stock price. Because of the high correction even our first target (figure2, target1) of $31.50 is quite lucrative, there you should consider a partial take profit. In front of our remaining position there are still interesting targets (figure2, target2) and in a weak total market even target3 might be possible with a small position still in the market after target 1 and 2.

If FSL breaks the blue line (figure2) clearly our short idea is over. If the stock price comes close to the blue line or breaks it only marginally and shows weakness we could still consider to enter a short trade with a really small stop loss.

 

figure2

 

Before any trade it is always necessary to look for news e.g. company earnings.

Parameters

Entry: $37.90-$39.50 or $40.90

Stop:  $41.00.

Targets: $31.50, $25.00 long-term $16.00.

Time-frame: medium-term

 

Disclaimer:
Disclosure according to § 34b WpHG due to potential conflicts of interest:
The author is not invested in the relevant securities or underlying securities at the time of publication of this analysis

 

 

 

Adidas AG

 

Adidas is a German sports equipment manufacturer and was founded in 1949. The company has it´s headquarter in Herzogenaurach and has currently about 53.700 employees.

Since 1995 Adidas is listed in the DAX on the Frankfurt Stock Exchange and currently the corporation has a market capitalization of 14,7 billion euros. With a weight of just 1,58% the company is one of the smaller companies that are listed in the DAX. Right now Adidas is behind Nike the world largest sportswear manufacturer.

In this fundamental analysis we will first look at the key financial ratios and will analyze how the company has developed over the last years. Then we will compare Adidas with Nike and we will also look at the different regions where Adidas is generating most of it´s revenue.

Finally we will summarize the main points of this analysis with the help of a SWOT-Analysis and we are also going to give a medium- and long-term outlook for the stock.

 

 

 

Key Financial Ratios

 

Over the last 8 years Adidas improved it´s revenue from 10.3 billion euro up to 14.5 billion euro, which represents a growth of 40%. But over the last 3 years the sales clearly stagnated and the company generated last year 2% less revenue than in 2012.

 

Adidas_figure1_englisch

 

 

In the picture above we can see that the revenue of Adidas not only stagnated over the last 3 years but also during the years 2007-2009.

 

 

Adidas_figure2_englisch

 

 

The net profit is stagnating over the last 8 years and only in 2013, Adidas was able to convince with a significant higher profit of almost 800 million euro. During the presentation of the latest earnings, the CEO of Adidas, Herbert Hainer, said that revenues are stagnating due to currency fluctuation in key international markets such as Russia and Argentina. At the same time the Golf division and the US sales are showing some weakness. In 2014 the sales in the US decreased by 7%.

Currently Adidas has a price-earnings-ratio of 24, which is quit high, because the average price-earnings-ratio of all DAX companies is currently 16.

When it comes to work out how profitable a company is, investors are always looking at the return on equity, because at the end all investors want to invest only in profitable companies. In 2014 Adidas had a return on equity of 8.7% and this ratio is also not very convincing, because the average return on equity of all DAX companies was over 10% in 2014. At the same time the ROE of Adidas decreased 30% over the last 5 years.

 

Adidas_figure3_englisch

 

 

Even more badly is the developing over the last 8 years because in 2007 Adidas was able to generate a very strong ROE of 18%.

If you look at the ROE you should also look at the equity ratio to find out how stable the financial situation of the company is and how large the leverage is. Right now Adidas has an equity ratio of 45% which is quit high, because the average equity ratio of all DAX companies is just 29%. The corporation was able to maintain this high equity ratio between 43%-47% over the last 5 years.

The equity ratio is a very important key figure, but investors have usually different opinions on it. One the one hand a company needs a very solid equity ratio to maintain a good financial stability during a recession, but one the other hand the equity ratio should not be to high, because it ́s not so easy for a company to generate a good return on equity with a high equity ratio.

Currently shareholders of Adidas are looking forward to get a dividend yield of 2,1% which is exactly the average of all DAX companies. It is positive that the corporation increased the dividend from 0.5 € to 1.5 € per share over the last 8 years, but it is very doubtful whether this trend is going to continue because we have already seen that both sales and profits are stagnating.

The Adidas stock has improved by 80% over the last 5 years, which is a little bit weaker than the DAX, which increased over 90% during that time. However the development of the stock during this time should be a clear alert signal, because until summer 2014 Adidas was a outperformer in the DAX and increased twice as high as the DAX from the year 2010.

Investors had very high expectations on the stock because of the soccer World Cup in 2014, but Adidas was not able to met those expectations and was sold off by the market during the second half of 2014.

 

The key financial figures of Adidas are showing some weakness. On the one hand the sales and profits are stagnating at the moment and on the other hand the company also has a higher price-earnings-ratio (24) than the market (16).

Adidas has a very high equity ratio, which gives the company a good financial stability but at the same time the return on equity has been in a down-trend over recent years. The dividend yield is only average and due to stagnating profits the company will not be able to increase the dividend.

 

 

Adidas vs. Nike

 

Adidas is the second largest sports-equipment manufacturer in the world behind Nike, but we have already seen, that Adidas is right now not able to grow. At the same time Nike was able to increase it´s revenue from $18.3 billion up to $27.8 billion over the last 5 years, which represents a growth of 52%.

 

Adidas_figure4_engisch

 

The net profit of Nike also increased by 42% during this period, which makes the view on the financial ratios of Adidas even more worse.

Thereby it was Adidas, which had very ambitious goals, because over 5 years ago, the company announced the “Route 2015” where Adidas wanted to increased it´s net profit by 15% every year and wanted to generate revenue of 17 billion euro in 2015. The company missed these goals, instead it´s Nike, which is constantly growing year by year.

A significant different between those two companies is the sponsoring: Since many years Nike is able to get the top athletes under contract and is willing to spent a lot of money. Currently Nike has for example athletes like Michael Jordan (Nike Air Jordan), Lebron James, Roger Federer, Rafael Nadal, Tiger Woods and Cristiano Ronaldo under contract.

Roger Federer is getting e.g. $130 million for 10 years from Nike.

These sponsoring contracts pay off for Nike, due to those very special and famous personalities people are willing to buy the products from Nike. Only with the shoes of Michael Jordan (Nike Air Jordan) Nike generated between $2 and $2.5 billion every year over the last 5 years.

When Nike presented a new pair of shoes from Air Jordan last year, the company sold over 480,000 units in just 3 hours and generated $80 million in such a short time.

 

 

Global economy

 

 

Adidas_figure5_englisch

 

 

The picture above shows that Europe and the US are the most important markets for Adidas in which the company is generating 50% of it´s revenue.

In Europe the company made 29% of it ́s revenue last year. Right now the Eurozone has a lot of problems and the economy has still not recovered from the last recession and the unemployment rate is over 10% At the same time Greece is also a large uncertainty.

Therefore and because of the risk of deflation the European Central Bank decided to start with a large quantitative easing program whereby the EZB will buy private and public bonds for more than 1.000 billion euro to bring the European economy back on track. But this is no guarantee that the European economy will get stronger.

Currently the economic situation in the US is quit good and can convince in contrast to Europe or Asia. Right now the US economy is growing very strong due to the very good labor market conditions. The US is depending very much on the labor market because it ́s primarily a consumer society and because of that it is very important that a lot of Americans have a constant income.

However the US might see the very first rate hike by the Federal Reserve in 7 years and there is legitimate concern that the economy could grow more slowly over the next years.

Although China is not the most important market for Adidas, however, still need to get mentioned in a global analysis, as the Chinese economy is probably the most important factor for the global economy. China is growing as slow as over the last 25 years and a lot of investors expect that the Chinese Central Bank will cut interest rates over the next months.

Currently the situation on the stock market is not so easy to evaluate, because although there are some question mark in the global economy, a lot of indices are at their all time high and a correction is more than ever likely to happen.

However this correction might get happen a little later at some point in the future due to the ECB QE-Program. If the stock market would do a correction, almost every stock would also decrease. That ́s why it is important to find out how much a stock is depending on the market movements.

A good financial ratio to find out this is the beta-factor, which indicates the systematic risk of a stock. This ratio shows how volatile a certain stock behaves in comparison to the overall market. If the market makes a movement of 20% and one certain stock also moves 20%, this stock has a beta-factor of 1. If this stock would have made a 30% movement, the beta-factor would be 1,5.

Over the last 5 years Adidas had a beta of 1,24, which is quit high and even if we look at a shorter time horizon we still get the same result, because over the last 6 months the company had a beta of 1,25.

This means that the Adidas stock is reacting quit high on market movements and that means the stock is more risky than other stocks.

 

 

Conclusion:

 

Adidas_figure6_enlgisch

 

 

Our analysis is not showing a good picture of Adidas. The stagnation in sales and net profit is already an alert sign for many investors because investors want to invest their money in companies that are able to grow in the future. Besides that Adidas also has a very high price-earnings-ratio (24) which shows that the stock might be a little overbought at the moment.

We also saw that the main rival Nike is showing some strong growth over the recent years and at the same time Nike as managed to take all top athletes under contract, which is one important difference between Adidas and Nike.

The high beta of 1.25 also shows that the stock is more risky for investors because in the case of a stock market correction the Adidas stock could fall even stronger.

 

 

Mid- and long-term outlook:

 

Due to the current monetary policy of the ECB the European stock market could continue to rise and that means Adidas shares might also continue to go up. However if this happens it is hard to think about a fair stock valuation, as Adidas is already a little overpriced and that means right now Adidas is not a good investment for long-term investors.

Of course some corporate news, like quarterly earnings can change the picture again, but right now Adidas is not a lucrative investment.

 

 

 

 

 

Timeframe: short- mid-term

 

 

Overview:

 

Google is one of the most famous brands in the world and one of the leading global technology company. Beside the well-known search website, the corporation also offers other products or services such as the email service Gmail, the social networking platform Google+ and the Google Chrome web browser. In addition, the company als offers the geographical products Google Earth and Google Maps, and also hardware and software for smartphones and tablet computers. Google is also selling it´s own smarthphone (Nexus).

 

Since the beginning of 2015 the stock has established an uptrend, which is now in a correction (figure a).

 

figure a

figure a

 

 

We will now look at different scenarios, that might happen in the near future.

 

Scenario 1, figure b/c:

 

In figure b we see that the price has exactly arrived at the support zone. This consists of the 200 SMA and the recent high of the supporting trend line.

The first possibilty would be that the stock would bounce back from this support area and would go up to the last high (figure b).

 

figure b

figure b

 

 

A second possibility would be that the stock would make a larger correction before it goes up again (figure c).

 

figure c

figure c

 

 

Scenario 2, figure d:

 

An alternative scenario would be that the stock could also make a short scenario whereby the price would break through the current support zone. In this scenario the volume could rise again and the uptrend would come to an end.

We could perhaps see this new downtrend because right now the MACD is overbought.

 

figure d

figure d

 

 

Conclusion:

 

Right now we see an uptrend so we are looking for long trades. As long as the mentioned support zone is not broken, the bulls are in control.

It is also very important for a trader to look at the fundamental datas, as the company might release some very important press releases like quarterly earnings.

Especially since Google is well-know, the stock is not only traded by professional, but also by non professional traders. That means some news or rumors can have an impact on the stock price.

 

Disclaimer: Disclosure according to § 34b WpHG due to potential conflicts of interest:
The author is invested in the relevant securities or underlying securities at the time of publication of this Analysis

 

 

 

 

Timeframe: short-, mid-term

 

Overview:

Zions Bancorp. is a US corporation that operates in the banking business. The activities of the financial group includes the traditional banking services for private and corporate clients e.g. loans for companies, real estate morgages and investment products.

Since march 2014 the daily chart shows us a long-term downtrend which takes place in a trend channel.

 

figure a

figure a

 

 

In picture b we can also see some more points that support the short scenario:

1. The price is under the 200 SMA.

2. The volume is higher when the price goes down.

3. MACD is oversold.

 

figure b

figure b

 

Scenario 1, picture c:

 

In picture c we see a massive resistance zone, which includes the trend channel, the 200 SMA, the red trend line and the last highs around the area at $28,70 and $29,00.

 

figure c

figure c

 

 

The arrows show the possible processes of the stock. The main target is between $23,00 and $24,00. In this area we can see a strong support zone. Here the price could turn again to continue it´s run inside the trend channel or the stock could also break through this zone. Accordingly, a trader should be prepared for both situations.

 

Scenario 2, picture d:

Alternatively, the stock can also be traded long when it would leave the trend channel upward. Then the previous resistance zone would act as a support zone and we would also have some very attractive targets.

The picture d shows the possible direction of the stock.

 

figure d

figure d

 

 

Conclusion:

 

As long as the price does not leave the trend channel upward, the stock is a clear short candidate. The indicators we dicussed support this short scenario.

The trader should also pay attention to corporate reports and other news that may impact the stock price.

 

 

Disclaimer: Disclosure according to § 34b WpHG due to potential conflicts of interest:
The author is invested in the relevant securities or underlying securities at the time of publication of this Analysis

 

Timeframe:

short-term: hours

1-hour-chart (figure 1)

 

mid-term: days

daily-chart (figure 2)

 

long-term: weeks

daily-chart (figure 3)

 

Tendency:

short-term: down

down until the first target at $123,00

up above $130,00 until the first target at $132,00

 

mid-term: down

down under $124,00 until the first target at $108,00

up above $132,00 until the first target at $160,00

 

long-term: up

down under $108 until the first target at $90,00

up above $160,00 until the first target at $170,00

 

 

Current situation and outlook:

 

Keurig Green Mountain Inc. is one of the biggest companies in the coffee industry worldwide. The main business of the company is trading with coffee and tea, and also the production of coffee machines. In addition to that the corporation has made some innovative and award winning technology in the coffee and tea industry.

We we look at the stock on a short-term horizon, we can cleary see an upward trend (figure 1, green trend). This trend is still intact right now, but we can also see a counter signal on the same trend size (figure 1, red trend). And because of that we expect falling prices to the first target at $124,00. But the current down-trend would only be broken above the area around $130,00 and that means the correction can continue a little bit.

 

figure 1

figure 1

 

 

If the price would go under the price level around $124,00 the short uptrend would be over and the mid-term target would be at $108,00. This target is the last low point of the downtrend on the daily-chart (figure 2, red trend). This down-movement made a 80% correction right now. The stock has now arrived at the SMA 200 and is already showing some weakness. When we talk about trend following, we always have to look at the volume and right here we can see higher volume when the stock is going down.

This short scenario would be over if the price would go above $132,00.

 

figure 2

figure 2

 

 

The long-term picture of GMCR shows a major uptrend (figure 3, green trend), which is now in a correction. But the stock has just bounced right on the blue trend line (figure 3) and is showing some strenght, and because of that the stock is still up, but it would be a major counter signal if the price would go under the $108,00.

 

figure 3

figure 3

 

 

pro short:

– short- and mid-term downtrend

– higher volume with falling prices

– weakness at 200 SMA

– long-term downtrend at coffee

 

contra short:

– long-term uptrend

– large correction

 

Right now is seems like the stock would continue it´s short- and mid-term downtrend. If this is going to happen we might see also falling prices at the long-term horizon. Nevertheless we also always have to look at the overall market. The company is very much depending on the coffee price and right now coffee has made a major downtrend and this trend might continue if the US-dollar is getting stronger.

 

Disclaimer: Disclosure according to § 34b WpHG due to potential conflicts of interest:
The author is invested in the relevant securities or underlying securities at the time of publication of this Analysis.

 

18929-logo-bilfinger-se

 

Timeframe:

short-, medium-term

 

Tendency:

short-term: up

medium-term: up

resistance zones: around 55,50 € – 55,00 €

support zones: around 52,90 € – 53,50 €

 

 

Bilfinger (GBF)

 

Bilfinger SE is an international corporation, which is involved in all areas of construction. The company provides services related to maintenance of industrial plants and power plants and also industrial bulding construction and activities in infrastructure. Bilfinger also develops complete solutions for building and infrastructure projects. The clients come from both the puplic and private sector. The company is also one of the leading tunnel specialist in their home country and abroad. Bilfinger has numerous subsidaries in Germany and in many other countries.

 

 

Current situation and outlook:

 

The construction company Bilfinger was able to find it´s bottom last year in december and since then we can cleary see raising prices. Currently the bulls seem to have taken over the command because we can see a uptrend with higher highs and higher lows. The raising price is also accompanied by rising moving averages.

 

Figure 1

Figure 1

 

Possible scenario:

 

If the price continues to go up this new uptrend is likely to continue. In the area of 54,50 € – 55,00 € the stock could take a short consolidation back into the current area, which could be a good possiblity to enter a long position (figure 2). If the price would directly break through the zone around 55,00 € we need to find a possible entry in this area.

 

Figure 2

Figure 2

 

Alternative scenario:

 

If the price would bounce off the resistance zone at 55,00 € – 56,00 € and the 200 SMA, the long scenario would be over at the moment.

In this case if would be a good idea to stay flat and observe what the stock will be doing.

 

Figure 3

Figure 3

 

 

Conclusion:

 

The Bilfinger stock could convice over the last month with raising prices. The bulls used each pullback this year to buy the stock. Righ now we are in such a pullback phase which could be used by investors again. The next target would be the area around 57,50 € – 58,00 € and we also have some more targets above.

 

Disclaimer: Disclosure according to § 34b WpHG due to potential conflicts of interest:
The author is invested in the relevant securities or underlying securities at the time of publication of this Analysis.

 

Apple Inc.

 

Apple Inc. is an American technology company with headquarters in Cupertino, California, and was founded in 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne. The company manufactures computers, smartphones, tablets and consumer electronics, while providing operating systems and application software. The corporation currently has approximately 93,000 employees and sells products in more than 115 countries worldwide. Currently Apple has a market capitalization of $ 751 billion and is the largest company in the world. Apple is currently listed in the   S+P 500 and Nasdaq.

The corporation has presented the best quarterly result in the history of the company on January 27 this year and posted a net profit of $18 billion, which is also the best quarterly result in economic history at the same time. The record here was previously held the by the russian energy company Gazprom, which generated a quarterly earnings of $16.24 billion 4 years ago. This record and the never-ending hype surrounding the Apple Corporation is a reason to consider the company with a fundamental analysis more accurate and to work out how the stock is currently valued or how much potential the company still has in the future.

In this fundamental analysis, we will first take a look at the key financial ratios and work out how the company has developed in recent years. Furthermore, we will look at the industries in which Apple has been operating and at the same time we will consider the regions where the company generates most of its revenue. Finally, we will summarize with the help of a SWOT analysis the key points of this work and will give an outlook for the Apple stock.

 

 

Financial ratios:

 

Apple increased its revenue by 180% over the past 5 years and generated $182 billion dollars in 2014 . Even more impressive is the sales trend for the last 10 years, because in 2004 Apple just generated $13.9 billion. This represents a sales growth of 1200% over the last 10 years.

 

Figure1_englisch

 

However, over the last 2 years the net profit of Apple stagnated and the company recorded $39.5 billion profit in 2014 which is 5% less profit than 2012. The profit margin in recent years was a little lower because the company had a lot of cost with the production of new product updates and at the same time Apple brought out the iPad Mini which has a significant lower profit margin than any other Apple product.
The stagnation in net profit went to an end over the last quarter, because Apple could not only increase its sales by 30% compared to the previous year, but at the same time the company also increased it´s net profit from $13.07 billion to $18.02 billion, which represents an increase of 38%, respectively. This record result over the last quarter was mainly due to 2 reasons: firstly, sales in China increased by 70% and right now 21% of the total revenue is generated in China.

 

Figure2_englisch
The second reason for the best quarter in the company’s history is the iPhone, from which Apple was able to sell over 74,4 million units over the last 3 months. This means Apple was able to sell around 574 iPhones per minute over the last quarter. Overall, Apple was able to increase it´s sales of the iPhone by 57% compared to the same quarter last year.

 

Figure3_englisch

 

But sales of all other Apple products are stagnating at the moment e.g. the revenue of the iPad decreased 17% last quarter.

Apple currently has a price-earnings-ratio of 17.5 and this is below the average price-earnings ratio of Nasdaq 100 companies ( 22.5 ) and also from the S+P 500 ( 18.9 ), where Apple is listed in each case.
This shows that Apple is currently not overrated. Normally technology companies have anyway a slightly higher price-earnings-ratio than the market, which can be seen very clear at the Nasdaq 100. Even if Apple had a PER between 20-25, it would be in the normal range.

One of the most important financial key figures for long-term shareholders is the return on equity of a company, because it gives a clear indication of how profitable a company is. Finally, all investors will only invest if the company is consistently profitable.

Apple was able to generate a constant return on equity between 30-35% over the last 5 years, which is a really strong result, while the average return on equity in the S+P 500 was between 14-18 over the last 3 years. So right no Apple is able to earn a return on equity which is twice as high as the return on equity from the market. When an investor looks at the return on equity, at the same time he will also look at the equity ratio, to find out how the company leveraged it´s earnings. Apple currently has an equity ratio of 47%, which is extremely high for a company, which has a three digit total assets.

In the years before Apple could even displayed an equity ratio between 60% -67%. The reason for the reduction in this rate, is that Apple has issued a bond for the first time in 2013 and was making some long-term debt. Steve Jobs, who died at the end of 2011, was never a fan of making debt.

Currently, Apple has cash reserves of $178 billion with which the company could theoretically buy 480 out of 500 S+P 500 companies. The equity ratio and the current cash reserves give the company an extremely high financial stability. At the same time Apple is able to generate the double amount of return of equity in comparison to the market which is almost unique and because of this the Apple stock is one of the most traded stock worldwide.

Right now Apple has a dividend yield of 1.47%, which is below the average of the S+ P 500 which is 2%. The corporation just started to pay a dividend in 2012 and since then the company increased the dividend per quarter from $0,38 to $0,47.

This means that Apple pays an annual dividend of $1,88. If you consider that Apple this year is expected to generate earnings per share of about $9, that sounds like a very low payout ratio. However, Apple also started in 2013 a very large share buyback program and last year the company bought for $45 billion of its own shares . Such a buyback program is always very much appreciated by investors, as this leads to higher demand .

At the same time it decreases the number of shares that are in circulation, so that the earnings per share will increase if the company should generate the same net profit. This could also be observe very nice at Apple, since the earnings per share increased last year up to $6,49 (2013 : $ 5.72; 2012: $ 6.38 ), although we have already noted that the profits stagnated in recent years. The purchase of own shares also means that the company can distribute less dividend while the dividend per share will stay the same, because there are less shares outstanding. All those points will have a positive affect on the stock price.

Due to the current very high cash reserves the CEO , Tim Cook, said that the company does not want to unnecessarily hoard cash. And because of that statement a lot of analysts exspect a very large program for the shareholders. Currently there is the speculation in the market that Apple will announce a possible $150 billion program for the next 3 years in the near future. This is also realistic because Apple
has already bought for $45 billion it´s own shares over the last year and also paid about $ 11 billion of dividents.

 

Figure4_deutsch_englisch

 

Because of the very strong return on equity ratio it is not a surprise, that the Apple stock was able to clearly outperform the S+P 500 over the last 5 years. During that time Apple share rose about 300% while the S+P 500 only moved up about 80%. The Nasdaq 100 rose about 130% during this time period. After the dead of Steve Jobs at the end of 2011, a lot of people already announced the end of Apple and the stock totally overreacted and made a very strong correction in 2012.

All together the financial ratios are looking very strong. The development of the revenue is really impressive and over the last quarter the company could end the short stagnation in net profits. Apple can stand up with a very high financial stability due to a strong equity ratio and very high cash reserves. During the year 2014 Apple generated a return of equity of 35% which is the double amount as the average ROE of the S+P 500.

Right now the dividend yield of 1,47% seems to be quit low, but at the same time Apple is doing a very large buy-back program.

But we have also noticed a weakness, because Apple is very much depending on the iPhone, because the sales of all other products are stagnating right now.

 

 

Industry analysis:

 

When we analyze the industries Apple is operating in, we have to take a special look at the smartphone industry, because we already saw that Apple is making most of it´s profit with the iPhone.

The smartphone industry was more or less created by the introduction of the iPhone in 2007. In 2014 more than 1,245 billion smartphones have been sold worldwide which is an increase of 28% in comparison to the previous year (2013: 970 million units). In 2014 Apple sold 169 million iPhones and during the last quarter the company was able to sell more smartphones than it´s main rival Samsung for the first time than 2011. Over the last 3 months Apple sold over 74,8 million iPhones while Samsung sold about 73 million smartphones.

 

Especially the market in China rose significantly and also has more potential. Over the last quarter Apple made 69% of it´s revenue with the iPhone and there is a great chance that Apple can also improve this number because of the growing market in China.

 

Figure5_englisch

 

The revenues of the iPad didn´t change at all over the last 3 years and the company was able to generate about $30 billion each year with the iPad over this time period. These numbers are quit weak, because the worldwide total sales of tablets increased about 60% over the last 3 years. Due to higher competition which are selling more and more cheaper tablets, Apple´s market share decreased from over 40% to just 29% in the tablet market over this time period.

Another important market is the computer market, which has been in a downtrend due to the tablet market. The worldwide computer sales decreased 14% over the last 3 years, but during the same time period Apple was able to hold it´s Mac´s sales constant. Right now the corporation has a market share of 6%.

If the computer market is going to continue it´s downtrend, it would be a quit good result for Apple if the company would hold it´s sales constant. We don´t expect any growth in the computer market over the next years.

When we look at the industries Apple is operating in, it is again clear to see that the iPhone is the biggest strength and weakness at the same time. The smartphone market is growing very strong and Apple is able to increase it´s sales each year and over the last 3 month the company was also able to sell more smartphones than it´s main rival Samsung. But Apple is very much depending on the iPhone, because the sales of all other products are stagnating. And in the long run it is always a problem for a company if it´s depending on just one product.

Apple has already noticed this weakness and is in the process of creating new products. On the 9th of March this year will be an event where Apple will introduce new products. We already now that Apple will come up with the Apple-Watch. Right now the smartwatch market is quit small and it will be very interesting to see how Apple fans will react to this new product.

Over the last weeks it was also confirmed that Apple is going to produce it´s own car until 2020 and will try to conquer a whole new industry. In recent years there were also a lot of speculation that Apple wants to sell it´s own television and this was also supposed to be the last project where Steve Jobs was working on.

The company will try to do anything to produce new products to offer a wide range of products, in order to reduce the dependence on the iPhone. And on the next Apple event all fans and investors will we looking forward to hear the legendary sentence:” And there is one more thing…”

 

 

Global economy:

 

The most important market for Apple is the USA, where the company was able to generate 36% of it´s revenue in 2014. Currently the economic situation in the US is quit good and can convince in contrast to Europe or Asia. Right now the US economy is growing very strong due to the very good labor market conditions. The US is depending very much on the labor market because it´s primarily a consumer society and because of that it is very important that a lot of Americans have a constant income.

This is also very important for Apple, because the company is producing luxury products and only in a growing economy a lot of people will be able to buy these products.

In Europe the company made 22% of it´s revenue last year. Right now the Eurozone has a lot of problems and the economy has still not recovered from the last recession and the unemployment rate is over 10% At the same time Greece is also a large uncertainty.

Therefore and because of the risk of deflation the European Central Bank decided to start with a large quantitative easing program whereby the EZB will buy private and public bonds for more than 1.000 billion euro to bring the European economy back on track. But this is no guarantee that the European economy will get stronger.

A big growth driver for Apple is currently China. As we already mentioned over the last quarter the revenue in China increased over 70% and there is still a lot of potential. In 2014 the company generated 16% of it´s total revenue in China. But a the same time the Chinese economy is growing as bad as over the last 25 years and China is not only an important market for Apple but also the most important factor for the worldwide economy.

The situation on the stock market is currently not so easy to analyze because on the one hand we have some worldwide economy problems but on the other hand a lot of stock indices are at their all time high and a correction is more likely.

However this correction might get push back at some point in the future due to the ECB QE-Program. If the stock market would do a correction, almost every stock would also decrease. That´s why it is important to find out how much a stock is depending on the market movements.

A good financial ratio to find out this is the beta-factor, which indicates the systematic risk of a stock. This ratio shows how volatile a certain stock behaves in comparison to the overall market. If the market makes a movement of 20% and one certain stock also moves 20%, this stock has a beta-factor of 1. If this stock would have made a 30% movement, the beta-factor would be 1,5.

Over the last 12 month Apple had an beta of 0,96 which is quit low for a technology company.

 

 

Conclusion:

 

At the end we will now summarize the most important facts of this analysis with the help of a SWOT-Analysis.

 

figure6_apple_swot_englisch

 

The analysis of Apple shows a very positive picture of Apple. In the case of financial ratios there is probably no company in the world that can compete with Apple. Last year Apple achieved a ROE of 35%, which is twice as high as the average return on equity of the market. The company also has a very high equity ratio and cash reserves, which gives the corporation a very strong financial stability. The high cash reserves ensure that the company can completely distribute it´s total net profit to their shareholders. And that is also the reason why the market is expecting a possible $150 billion program from Apple where the company will not only pay dividends but will also continue with it´s buy back program.

Our analysis clearly shows that the iPhone is currently the biggest strength and weakness of the company. This product is right now bringing the company more and more money each year. Especially China gave the iPhone sales a huge boost. But this means also a great dependency on one product. That´s why Apple is working on developing new products and it will be very interesting to see how good the new iWatch will do.

The high cash reserves also allow able to enter new industries like the automobile industry. Right now there are already some rumors about a possible cooperation between Apple and BMW and Tesla.

Bottom line is that Apple is currently well positioned and is about to open up new industries. And at the same time the market in China has a lot more potential in the future.

 

 

Medium- and long-term outlook:

 

The stock is currently near it´s all time high and this is not the best time to enter any stock. However an investor can already take advantage of some minor corrections to buy the stock. Should the market make a stronger corrections a long-term investor should definitely use this correction to take position in the Apple stock.

But it can also happen that the stock will not do any bigger correction since the current price-earnings ratio is quit low from Apple in contrast to the market (S+P 500; Nasdaq 100).

 

Chart Technical Analysis of Marsh & McLennan Comp. Share, based on the daily Chart.
Over the medium term, the shares of MMC are in an intact downtrend (figure 1, shown in red).The last downward movement has now almost fully corrected. The correction in the subordinate time frame, on a smaller trend size trend, has established a clear upward trend.

Since the value is showing the first signs of weakness we will wait for a trend reversal, or a clear counter signal in the short direction. This could then be traded. The medium-term target is at $ 53.50.
The drawn trend line in figure 1 that has been breached is now acting as support and should definitely be considered, since we can expect a smaller recovery there.

Alternatively, the short scenario would be broken if the price should rise above the $ 57.50 level and therefore establish an upward trend. Then we could be on the look out for long entrances.

 

figure 1

figure 1

 

 

 

 

Disclaimer: Disclosure according to § 34b WpHG due to potential conflicts of interest:
The author is invested in the relevant securities or underlying securities at the time of publication of this Analysis.

Time frame: the short to medium term

big picture view:

Albemarle Corporation is a US company that in the sectors of plastics and special chemestry.
Since July 2014, a clear downward trend has been established. Note the very strong downward movements compared to the upward movements or in this case corrections. The price is trading under the 200 SMA and the RSI is overbought.
These are two additional features that speak for short setups. The down-trend line emphasizes once again the clear trend (figure a).

 

figure a

figure a

 

Listed are various scenarios and targets. Scenario 1, figure b / c: a triangle can be seen in figure b that was breached to the down side. The correction of the last movement is slowly approaching from the bottom of the trend line. This as where the main trend line is running from the top down.
The green square indicates a point where the two lines meet and the price could possibly bounce off of. Above this point, the upper triangle line and the 200 SMA line, could act as additional resistance. Looking at the RSI, the plotted points are at the same height as when the price has turned in the past.

 

figure b

figure b

 

In figure c, the arrows indicate the possible course of the price action. The main target is in the range of 48 to 46 USD. The trader has several options to choose from to enter the market. Two possibilities, for example trading the rebound or to wait for on a candle formation to enter short.

 

figure c

figure c

 

Scenario 2, figure d:

An alternative scenario would be if the value breaks out above this resistance. Then we could trade the stock long. The green squares indicate the important areas that need to be breached. Long targets are in the range of 65, 70 and 76 Dollars.

 

figure d

figure d

 

Conclusion:

ALB is a stock which is definitely considered short at the moment from a chart technical stand point. You can see the strength in the downward movements that would bring a trade into profit quickly. The trader can go short to an approximate 15% target. For more safety, partial sales are recommended. The trader should also pay attention to various company earnings and reports that could move the price considerably.

 

 

 

 

Disclaimer: Disclosure according to § 34b WpHG due to potential conflicts of interest:
The author is not invested in the relevant securities or underlying securities at the time of publication of this Analysis.