GOLD IS READY TO REBOUND

After  continous fall in the last of 30 days,the faith on the precious metal it seems will back,at least for the next period.Today I'll make a technical analysis for the next period(23-27 november 2015).

The gold price closed at 1077.100 $ per ounce,at this price we can think to initiate buy orders,starting when price will pass level 1080.00 which represent the rezistance line.First profit target will be somewhere near 1100$  which is coresponding fibonacci 32,8%,I can go further and say the next profit target to 1130$/ounce and stop loss outside 1070 it's safe place.

The importance event for the next week will be US Preliminary GDP on tuesday 24 november which is forecast 2% growth.

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REASONS FOR WHY I AM STILL CONFIDENT IN VOLSKWAGEN AUTO BUSINES

The shares of german car manufacturer droped in the last couple of months.As probably some of you know on september 2015 The Environmental Protection Agency issued o notice of violation of the clean air act by Volkswagen Group.

Despite the dramatic fall,I consider Wolkswagen Group is still a good business which deserve to invest now.

                                                               BALANCE SHEET

                                                 2014                           2013                   2012                      2011

CURRENT ASSETS             :     131,102              122,192         113,061               105,640

Inventory                            :         31,466                 28,653          28,674                27,551

Receivables                         :         21,096                 19,621         18,460                 17,630

TOTAL ASSETS                   :     351,209              324,333         309,518             253,769

LIABILITIES AND EQUITY

Accounts payables          :                  17 838                   16,583            15,662               15,244

TOTAL CURRENT LIABILITIES  :  130,706          118,625          105,526             101,237

Long term debt                          :            10,643         15,913            15,096                7,661

TOTAL LIABILITIES                     :   261,020          234,296         227,523             190,415

TOTAL EQUITY                            :     90,189           90,037           81,995                63,354

                                                                        INCOME STATEMENT

                                                    2014                               2013                     2012                      2011

TOTAL REVENUE                    : 202,458           197,007             192,676              159,337

Less: COST OF GOODS SOLD:(145,934)       (144,135)         (141,949)         (117,117)

GROSS PROFIT                          : 34,394           33,690                 33,379              27,106

OPERATING PROFIT                :  11,921           11,187                11,824              11,1000

Less:  Finance Cost                 :       (1870)             (1614)                  (1,786)           (1,325)

NET INCOME                              :   10,985         9,093                  21 ,712              15,409

                                                                     PERFORMANCE MEASURES

1 PROFITABILITY

                                                                      2014           2013           2012

ROCE                                                       :5,40%       5,43%        5,79%

GROSS PROFIT MARGIN                 :16,98%       17,1%     17,32%

PROFIT FOR THE PERIOD MARGIN:5,88%      5,67%       6,13%

ASSET TURNOVER                               :0,9              0,95          1,04

Despite an increase in revenue of 24,6% in 2014, the gross profit margin has fallen over 0,7% to 16,98%.Although revenue has shown an increase the falling gross profit margin may indicate that the company is unable to achieva the same level of sales price that it was in 2013,or is not efficient at controling all its costs.

The ROCE has actually fallen slightly from 5,43 in 2013 to 5,40 in 2014,this mean that the company is not good at generating profit from its capital employed.The decrease in the ROCE is due to the fall in the profit margin.

2  LIQUIDITY

                                                                    2014                  2013               2012                     2011

CURRENT RATIO                           :       1                           1,03                    1,07                 1,04

INVENTORY HOLDING PERIOD:    78,7 days             72,5 days       73,7 days          85,8 days

RECEIVABLES PERIOD                  :     38 days                36,3 days        35 days           40,3 days

PAYABLES PERIOD                       :        45 days               42 days           40 days           48 days

A slightly decrease in the current ratio in 2014 with 0,29% and 0,65% comparative with 2013 and 2012 that could indicate that the company has some liquidity problems,that its happen because the company is strungled to pay is debt.Payable period was 45 days in 2014 comparative with with 42 days in 2013.

Company inventory increased with 8,5%  in 2014 comparative with 2013 could indicate that the company is having problems selling its products..The company should take steps to increase inventory turnover by removing unpopular items of inventory.

3 MEASURING RISK
                             
                                        2014                 2013                  2012                 2011
GEARING                 :    10,55%        15,01%           15,52%             10,78%
INTEREST COVER  :   6,37                   6,93                6,62                    8,37

The company present a low level of debt more than that the level of gearing decreased in 2014 at 10,55% comparative with 2013.

                                                           BASIC VALUATION OF BUSINES

NET INCOME                        :10 985  

MARKET  PRICE                   :34,953,410

(Outstanding shares*share/price)

EQUITY                                     : 90 189

SHARE/PRICE                          :  118,45EURO/SHARE

P/E RATIO                                :     9,44

EPS                                              : 12,35

DIVIDEND                                 :4,80

PRICE BOOK RATIO               : 0,6

EXPECTED RETURN AFTER 1 YEAR   :   10%

The actual value of P/E Ratio and Book Value I could say that the company value is undervalued and is a good opportunity to invest.

ROCE(Return on capital employed)    Profit from operation/Capital employed*100
CAPITAL EMPLOYED=TOTAL ASSETS-CURRENT LIABILITIES
GROSS PROFIT MARGIN=GROSS PROFIT/REVENUE*100
PROFIT FOR THE PERIOD MARGIN=PROFIT FROM OPERATIONS/REVENUE*100
ASSET TURNOVER  =REVENUE/CAPITAL EMPLOYED
CURRENT RATIO=CURRENT ASSETS/CURRENT LIABILITIES
INVENTORY HOLDING PERIOD=INVENTORY/COST OF SALES*365
RECEIVABLES=RECEIVABLES/REVENUE*365
PAYABLES PERIOD=PAYABLES/PURCHASES*365
GEARING=DEBT/DEBT+EQUITY*100
INTEREST COVER=PROFIT BEFORE FINANCE CHARGE AND TAX/FINANCE COST

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IS AUSSIE DOLLAR GOING TO THE LOWEST LEVEL SINCE OCTOBER 2008?

The week finished in force with us dollar gaining against all major currency pairs.Friday the Us Bureau of Labour and Statiscs published jobs reports (NFP) that increased by 271 000 in October which is more than economists forecast,the unemployment rate remain unchanged at 5 %.

This results come to emphasize again that FED will hike the interest rate soon,maybe in december,important to see if the Janet Yallen will change his dovish tone in this market circumstance with strong evidence that the us labour market is improving.

What would be the market reaction when FED will hike the interest rate? How far can dollar goes? that are questions that nobody knows

Today I will try to make a short analysis in my view how a strong us dollar will afect aussie dollar.The australian currency lost important ground this week,australian private sector house approvals falls with 1,8 % in September 2015,balance on goods and services was a deficit of 2,596 m$ in september 2015,retail sales rose 0,4 % in september 2015 compared to september 2014 the trend estimate rose by 3,7%.

RBA left the cash rate on hold but surprising with their dovish tone,a new possible rate cut in the next period.

                                                       TECHNICAL ANALYSIS

The week is closed at 0,70472  which is close to support line  on weekly chart .If the price will broke the support line is very probably that the price will continue his  rallies with a possible target near to 0,600  which will be the lowest level since 2008.

If the price will be consolidate around 0,70472  and will not broke the weekly support line we can think to initiate buy orders only if the price broke resistance line 0,73600  .


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BULLISH VIEW ON ALUMIL INDUSTRY SA

Looking for companies listed on BVB(Bucharest Stock Exchange) one company that caught me attention is Alumil Rom Industry SA .First I 'd like to tell some words about the company.Is one of the most important player in Europe in aluminum extrusion and production of aluminum profiles ,but for more information about company profile you can find on company website (www.alumil.ro)

Now the company share price is trading to near 0.8200 ron/share which is good opportunity to buy but first to analysis some financials


                                                                   NET INCOME

2014 preliminary report- 1,706,411
2013 -559,578
2012-3,185,627
2011-4,002,368
2010-2,173,848

                                                                TOTAL REVENUE

2014 preliminary report-72,984,666

2013 -73,776,088

2012-73,986,146

2011-77,561,267

2010-69,599,187

                                                               TOTAL EXPENSES

2014 preliminary report-56,160,699

2013-73,016,128

2012-70,436,848

2011-72,759,533

2010-66,761,377

                                                                  PE/RATIO

2014  forward PE/Ratio -15.01

2013-46,35

2012-0

2011-0

2010-0

In 2010,2011,2012 the company 've chosen not to distributed dividends because uncertain aluminum market climate.At 43,35 PE in present consider that company has a good growth perspective.For those who don't knows the PE/Ration can be calculate as:

PE/RATIO=MARKET VALUE PER SHARE/EARNINGS PER SHARE

Important will be 20 of april 2015 when the company will release Annual report of 2014.According to preliminary report for 2014 the company reported net income of 1,706,411

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WILL ECB QE HELP TO BOOST DEUTCHE BANK AG SHARE PRICE?

Hi everybody today it's important day on financial markets ECB  News Conference. Mario Draghi  probably will announce size of assets purchase program.What that's mean? More exactly ECB is ready to inject liquidity on the EU areas.

About the QE in EU I've spoken in my last articles.It seems that QE has worked in US and UK   ,will see what's going to happen.Despite some criticism like Harvard proffesor Larry Summers which said in Davos " The ECB QE won't work"
\
In my view the QE will help to boost equity market in EU area,what company that I have in mind now is Deutche Bank.If somebody tell me is right time to buy AG share I say without hesitation yes.

                                            TEHNICAL ANALYSIS


Now Deutche Bank price shares trade near 30 $/share more exactly 29,82 $   I could say it's an important level a psihologic if the price of share 're going to consolidate at this level I  will see the price of shares going to 50 $/share even 70 $.  On the chart if you looking to MACD indicator will see that the price is on the oversold position.The 50 $/share coincide with 50 % Fibonacci retracement


                                                    FINANCIALS

                                                  NET INCOME

2013     -666 mil
2012     -263 mil
2011     -4132 mil
2010     -2310 mil

                                                  TOTAL ASSETS

2013     -1611400
2012     -2022275
2011     -2164103
2010     -1856811

                                               TOTAL LIABILITIES
2013     -1556681
2012      -1968274
2011      -2110713
2010      -1856811

                                                    TOTAL EQUITY

2013     -54719
2012      -54001
2011      -53390
2010       -48819

                                                  DIVIDENDS

2013       -1,025 USD
2012       -0,97   USD
2011      -0,92   usd
2010      -1,07  USDS
Important role will play Annual report of 2014 on 24 March

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