Buy Tata Metaliks; target of Rs 360: Centrum Research

Centrum Research's research report on Tata Metaliks

Tata Metaliks (TML) delivered steady performance in Q1 despite few unscheduled shutdowns and EBITDA stood at ~Rs660mn, up 33% YoY but lower than our expectations by ~8% with the miss being completely driven by shutdown impact (~Rs70mn). We continue to maintain our positive view on TML as its DI pipe business boasts of an industry leading cost structure, solid demand drivers and strong entry barriers. With expected recovery in spreads in FY19E and commissioning of PCI project by Q4FY19E coupled with several other productivity improvement initiatives,

Outlook

TML is expected to continue delivering steady earnings growth over FY19-20E. We see valuations attractive with reasonable scope for a re-rating and maintain Buy with a TP of Rs1050.

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Read More First Published on Aug 3, 2018 03:45 pm

FGL (FG) and AEGON (AEG) Critical Analysis

FGL (NYSE: FG) and AEGON (NYSE:AEG) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, valuation, risk, dividends, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

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68.3% of FGL shares are held by institutional investors. Comparatively, 9.1% of AEGON shares are held by institutional investors. 21.5% of FGL shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations for FGL and AEGON, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FGL	0	2	3	0	2.60
AEGON	2	2	1	0	1.80

FGL presently has a consensus target price of $11.00, suggesting a potential upside of 22.22%. AEGON has a consensus target price of $4.60, suggesting a potential downside of 29.56%. Given FGL’s stronger consensus rating and higher probable upside, equities analysts plainly believe FGL is more favorable than AEGON.

Profitability

This table compares FGL and AEGON’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FGL	N/A	9.54%	0.56%
AEGON	7.24%	6.59%	0.40%

Dividends

AEGON pays an annual dividend of $0.28 per share and has a dividend yield of 4.3%. FGL does not pay a dividend. AEGON pays out 33.3% of its earnings in the form of a dividend. AEGON has raised its dividend for 2 consecutive years.

Valuation & Earnings

This table compares FGL and AEGON’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FGL	$1.72 billion	1.12	$41.00 million	N/A	N/A
AEGON	$37.24 billion	0.36	$2.79 billion	$0.84	7.77

AEGON has higher revenue and earnings than FGL.

Summary

FGL beats AEGON on 9 of the 14 factors compared between the two stocks.

FGL Company Profile

FGL Holdings, through its subsidiaries, sells individual life insurance products and annuities in the United States. The company offers deferred annuities, including fixed indexed annuity contracts and fixed rate annuity contracts; immediate annuities; and life insurance products. It also provides life and annuity reinsurance services, such as reinsurance on asset intensive, long duration life, and annuity liabilities. The company sells its products through independent agents, managing general agents, and specialty brokerage firms, as well as various institutional markets. FGL Holdings is headquartered in Hamilton, Bermuda.

AEGON Company Profile

Aegon N.V. provides life insurance, pensions, and asset management services. It offers life and protection products, such as traditional and universal life insurance products, as well as employer, endowment, term, and whole life insurance products; and supplemental health, accidental death and dismemberment insurance, critical illness, cancer treatment, credit/disability, income protection, travel, and long-term care insurance products. The company also provides variable and fixed annuities, retirement plans, mutual funds, and stable value solutions; individual and group pensions sponsored by or obtained through an employer; and mortgages, as well as banking products, including saving deposits. In addition, it offers general insurance products consisting of automotive, liability, disability, household insurance, and fire protection, as well as financing and reinsurance services. The company markets its products through brokerage, partner, institutional/worksite, and wholesale distribution channels. It has operations in the United States, Mexico, Brazil, the Netherlands, the United Kingdom, Central and Eastern Europe, Spain, Portugal, and Asia. The company was founded in 1983 and is headquartered in The Hague, the Netherlands.

Omnicom Group Inc. (OMC) Director Sells $33,259.50 in Stock

Omnicom Group Inc. (NYSE:OMC) Director Linda Johnson Rice sold 475 shares of Omnicom Group stock in a transaction on Thursday, July 19th. The shares were sold at an average price of $70.02, for a total transaction of $33,259.50. Following the completion of the transaction, the director now directly owns 7,966 shares of the company’s stock, valued at approximately $557,779.32. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this link.

OMC stock opened at $68.18 on Friday. The stock has a market cap of $15.30 billion, a PE ratio of 12.58, a P/E/G ratio of 2.18 and a beta of 1.15. The company has a debt-to-equity ratio of 1.70, a current ratio of 0.89 and a quick ratio of 0.81. Omnicom Group Inc. has a 52 week low of $65.32 and a 52 week high of $83.34.

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Omnicom Group (NYSE:OMC) last released its earnings results on Tuesday, July 17th. The business services provider reported $1.60 EPS for the quarter, topping analysts’ consensus estimates of $1.54 by $0.06. The business had revenue of $3.86 billion during the quarter, compared to analysts’ expectations of $3.88 billion. Omnicom Group had a net margin of 7.45% and a return on equity of 40.82%. The company’s quarterly revenue was up 1.8% on a year-over-year basis. During the same quarter in the previous year, the company earned $1.40 earnings per share. equities analysts anticipate that Omnicom Group Inc. will post 5.58 EPS for the current fiscal year.

The firm also recently declared a quarterly dividend, which will be paid on Wednesday, October 10th. Investors of record on Friday, September 21st will be given a dividend of $0.60 per share. The ex-dividend date is Thursday, September 20th. This represents a $2.40 dividend on an annualized basis and a yield of 3.52%. Omnicom Group’s payout ratio is presently 47.06%.

A number of research firms have weighed in on OMC. Zacks Investment Research raised shares of Omnicom Group from a “sell” rating to a “hold” rating in a report on Friday, July 6th. BMO Capital Markets reaffirmed a “buy” rating and issued a $85.00 price objective on shares of Omnicom Group in a report on Thursday. Wells Fargo & Co reaffirmed a “market perform” rating and issued a $75.00 price objective (down previously from $80.00) on shares of Omnicom Group in a report on Tuesday, July 17th. ValuEngine raised shares of Omnicom Group from a “sell” rating to a “hold” rating in a research note on Thursday, July 12th. Finally, Morgan Stanley cut their target price on shares of Omnicom Group from $76.00 to $73.00 and set an “underweight” rating for the company in a research note on Wednesday, May 23rd. Five analysts have rated the stock with a sell rating, nine have issued a hold rating and three have assigned a buy rating to the company’s stock. The company presently has a consensus rating of “Hold” and a consensus target price of $78.08.

A number of institutional investors and hedge funds have recently bought and sold shares of OMC. Summit Trail Advisors LLC boosted its position in Omnicom Group by 6,646.4% during the first quarter. Summit Trail Advisors LLC now owns 1,862,479 shares of the business services provider’s stock worth $1,862,000 after acquiring an additional 1,834,872 shares during the last quarter. Ceredex Value Advisors LLC acquired a new position in Omnicom Group during the first quarter worth about $80,364,000. Schroder Investment Management Group boosted its position in Omnicom Group by 30.2% during the first quarter. Schroder Investment Management Group now owns 3,252,664 shares of the business services provider’s stock worth $236,371,000 after acquiring an additional 753,845 shares during the last quarter. Morningstar Investment Services LLC acquired a new position in Omnicom Group during the first quarter worth about $41,971,000. Finally, Kiltearn Partners LLP boosted its position in Omnicom Group by 38.6% during the first quarter. Kiltearn Partners LLP now owns 1,860,099 shares of the business services provider’s stock worth $135,118,000 after acquiring an additional 517,700 shares during the last quarter.

About Omnicom Group

Omnicom Group Inc, together with its subsidiaries, provides advertising, marketing, and corporate communications services. The company offers a range of services in the areas of advertising, customer relationship management, public relations, and healthcare. Its services comprises advertising, branding, content marketing, corporate social responsibility consulting, crisis communication, custom publishing, data analytics, database management, digital/direct marketing, digital transformation, financial/corporate business-to-business advertising, graphic arts/digital imaging, healthcare marketing and communications, and instore design services.

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