D&L Industries, Inc. (DNL) was incorporated in 1971 primarily as the holding firm for a group of companies engaged in the customization, development, and manufacturing of food ingredients, additives, colorants, aerosol products, resins, Oleochemicals, and powder coating.
The company has four product lines, namely: colorants and plastic additives, food ingredients, aerosols, and resins and powder coatings.
DNL Industries, Inc.
Market Cap: PHP 76.43 billion
Subsector: Food, Beverage & Tobacco
- Revenues in 2017 reached PHP 27.77 billion, higher by 24.95 percent versus the recorded PHP 22.23 billion in the same period in 2016.
- The company booked a net income attributable to parent of PHP 2.90 billion last 2017.
Double-Digit Growth Across Financial Indicators
D&L Industries, Inc. recorded a recurring income of PHP 1.53 billion for the first half of the year, which is 13 percent higher than last year. This figure translates to an Earnings Per Share (EPS) of PHP 0.21.
Furthermore, the earnings before interest and taxes (EBIT) grew by 13 percent at PHP 1.95 billion.
For the second quarter alone, net income reached PHP 784 million, higher by 14 percent versus the same period last year. The company’s High Margin Specialty Product (HMSP) volume increased by 14 percent year on year. It is twice the historical average of 7 percent.
Blended commodity margins grew further to 9.70 percent, from only 6.5 percent last quarter and only 4 percent for the full year in 2017. This figure contributed to the overall gross profit margin of 18 percent for the first half of 2018.
Due to the above average growth last year, export revenues normalized this year after dropping by 5 percent. However, exports as a percentage of total revenues are at 21 percent for the first half of the year.
Oleochemicals were slightly higher than food as the most significant share to export revenues, with a 35 percent participation rate. It was mainly attributable to the high demand for margin coconut-derived oleochemicals from developed countries.
On the other hand, food ingredients contributed 33 percent of total exports. The company is keen on reaching its target of having export sales provide 50 percent of total revenues.
Investors Enjoy Good Profitability Ratios
The company’s return ratio continues to provide satisfactory values. Return on Equity (ROE) stood at 20.40 percent while Return on Invested Capital (ROI) is at 20.90 percent.
These figures mean that if the company declared all its net income as dividends, investors would have enjoyed a 20 percent return on their investment.
The balance sheet is healthy; net gearing is only at 13 percent suggesting that the level of debt is low.
Interest coverage ratio is at 21x, which means that with the company’s EBIT, it can afford to pay 21 times its interest expense. The cost of debt is also low at 4.28 percent annually inclusive of DST.
DNL also showed a positive free cash flow of PHP 1.85 billion for the first half of the year.
DNL recently broke above the short and medium-term moving averages. The 15 EMA and 20 SMA had already made a bullish crossover with the 50 SMA.
Nonetheless, the 200 SMA is proving resistance. Volume is starting to favor the bulls. MACD is bullish.
Meanwhile, RSI is bullish as it forms higher highs and higher lows but is not yet at overbought levels. Support is estimated at 10.40 while resistance is expected at 11.00 followed by 11.30.
As of August 10, 2018, at 03:30 PM, the volume of DNL is 110.61% of the previous trading day.
Remember the correlation between price and volume.
- bullish price + high volume = high sustainability (price)
- bullish price + low volume = low sustainability (price)
- bearish price + high volume = high sustainability (price)
- bearish price + low volume = low sustainability (price)
DNL has a LOW-RISK level due to its risk percentage of 25.02%.
Foreign Fund Flow
DNL registered a Net Foreign Selling worth P2,725,512.00 as of August 10, 2018.
On a 30-day trading period, DNL is on a Net Foreign Selling worth PHP35,405,966.00.
Top 10 Players’ Sentiment
Trading participants of DNL with a 100% Buying and Selling Activity as of Aug-10-2018 at 03:30 PM:
12 out of 28 participants or 42.86% of all participants registered a 100% BUYING activity
8 out of 28 participants or 28.57% of all participants registered a 100% SELLING activity
Top 10 Players’ Buying Average: 10.6795
Top 10 Players’ Selling Average: 10.7110
The psychological average price of the top 10 players as of Aug-10-2018 is from 10.6795 to 10.7110.
What Is the Importance of Knowing the Top 10 Players’ Sentiment?
You need to know the psychological average price of the top 10 brokers who have traded a specific stock within a specific time period.
You need to know the buying average of the top 10 brokers who have traded a specific stock within a specific time period.
You need to know the selling average of the top 10 brokers who have traded a specific stock within a specific time period.
You need to know how many brokers, out of all the brokers who have traded a specific stock within a specific time period, registered a 100% buying activity.
You need to know how many brokers, out of all the brokers who have traded a specific stock within a specific time period, registered a 100% selling activity.
The buying and selling averages of the top 10 brokers are a sneak preview of the range of their collective average price.
If you know the psychological average price of the top 10 brokers who have traded a stock, you can calculate in your mind how much more can they probably afford to hold, relative to their collective risk tolerance, should the stock’s price go south.
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Not only do we tell them which stocks to buy and when to sell, but we also update them every day about what happened to each stock that we recommend.
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We show them our data-driven basis so they know what we know.
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They will not answer, “Because I was told to buy it.”
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