William Hill plc : Bet on bullish trend
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07/19/2012 | 04:01am
Opinion : Bullish above 276 GBp
Target price : 350 GBp
Stop loss: 274.8 GBp
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LONDON STOCK EXCHANGE
Casinos / Gaming |
William Hill plc provides bookmaking services in the United Kingdom. The Group, which operates licensed betting offices, telephone based-betting operations, and online betting, offers odds and takes bets on an assortment of sporting and other events. William Hill's betting offices provide access to real-time sports information via television and audio satellite links.
The economic and financial situation of the company is still strong. Estimated sales from Thomson Reuters consensus are encouraging. Debt is decreasing rapidly and the leverage is reducing at 1.37x. The share is trading 10 times its earnings estimates for this financial year, which seems low valuation.
Technically, the security is in an uptrend on all time scales and it is supported by moving averages. The bullish trend will not be stopped until prices are above the GBp 276 short term support.
According to both technical and fundamental elements, it seems opportune to take a long position at the current price with a long-term strategy. The bullish trend should allow the security to come back toward the GBp 350 resistance. A stop loss will be placed under the GBp 276 short term support to avoid a downtrend.
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Valuation |
2013e |
2014e |
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PER (Price / EPS)
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16,8x |
14,7x |
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Capitalization / Revenue
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2,64x |
2,46x |
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EV / Revenue
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3,07x |
2,77x |
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EV / EBITDA
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11,7x |
10,4x |
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Yield (DPS / Price)
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2,55% |
2,86% |
| Profitability |
2013e |
2014e |
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Operating Margin (EBIT / Sales)
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22,8% |
23,6% |
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operating laverage (Delta EBIT / Delta Sales)
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0,13x |
1,50x |
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Net Margin (Net Profit / Revenue)
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14,9% |
16,4% |
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ROA (Net Profit / Asset)
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10,8% |
11,6% |
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ROE (Net Profit / Equities)
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16,9% |
16,3% |
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Rate of Dividend
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42,8% |
42,0% |
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