Dangerous stocks? How do these companies look in an AnRep3D-graph?

For a couple of weeks we have been working with the free demo-generator, to show that it offers real added value, although less than the full version of course. Now let’s go back to the real generator, to show it’s power again. In an earlier post I provided a link to a site with a warning about dangerous stocks.
https://investorplace.com/2016/12/10-dangerous-high-yield-dividend-stocks-to-avoid/view-all/#.WdoLijtpFdg They have their own reasons to avoid those companies, but we are interested in their generic health, to be judged by their profit (absolute and relative) and their gearing. From the list I picked a couple we know rather well in Europe: BP, GSK, AstraZeneca, Ericsson and Telefónica Then I took their 2016 annual reports and extracted the relevant values (for AnRep3D, that is) for both 2016 and 2015. The links used to get the Annual Reports are shown below:
– BP  https://www.bp.com/content/dam/bp/en/corporate/pdf/investors/bp-annual-report-and-form-20f-2016.pdf (remember a significant event with a huge impact: the Gulf of Mexico oil spill) Values are in USD, so I converted them using an average value of  USD 1 -> EUR 0.91 with the help of   http://www.xe.com/currencycharts/?from=USD&to=EUR&view=2Y#– GSK  https://www.gsk.com/media/3609/annual-report-2016.pdf These values are in GBP and the average exhange rate used was GBP 1 -> EUR 1.21, based on: http://www.xe.com/currencycharts/?from=GBP&to=EUR&view=2Y#– AstraZeneca https://www.astrazeneca.com/investor-relations/annual-reports/annual-report-2016.html Again USD 1 -> EUR 0.91 using the same link as with BP.
– Ericsson  https://www.ericsson.com/assets/local/investors/documents/2016/ericsson-annual-report-2016-en.pdf This company is Swedish and reports in Swedish crowns. SEK 1-> EUR 0.105 (average): http://www.xe.com/currencycharts/?from=SEK&to=EUR&view=2Y#–  Telefónica  https://www.telefonica.com/documents/153952/13347920/Consolidated_Annual_Accounts_2016.pdf/dc4fed73-51c2-433a-95d0-ef16910abbe9  is a Spanish company and reports in EUR, so no conversion.

Taking revenue (sales), net profit after tax, equity and total assets in EUR, I got an input-file as shown below. Remember, the first line is the parameter-line with the number of companies, years for every company, scaling factor (divide by 2000), extra space 20% and font-size 4.Input BP GSK AstraZeneca Ericsson Telefónica

All the other lines hold the (converted to EUR) values from the annual reports. Generating the spatial (3D) graph, what do we see? Below is a screenshot – click it to view the real html-graph in your browser. This graph was generated in a couple of seconds from the input-file shown above!

3D graph front viewFirst a warning: the volume is not showing the relative size of the companies. Every dimension is on its own, although the ratios do have a meaning for every company. Having said so, we still can see that the “pharma giants” look more like dwarfs in comparison to British Petroleum (BP). The energy-company shows a revenue which is at least five times higer. Yet BP’s profit – the green roof – is litterally very thin! Hardly any profit at all and the year before BP suffered a massive loss (red roof). The impact of the oil spill was important of course. Zooming in (click on the screenshot to open the real 3D graph in your bowser – WebGL and Java should be active), the smaller blocks can be inspected more closely.

Remember: clicking the right mouse-button, moving the mouse up and down will zoom the graph in and out. Clicking left and moving the mouse will tilt the graph in different directions (or move the observer’s viewpoint around a fixed graph – it’s relative of course). Double clicking in the graph translates it and moves the centre at the same time. As a result the way the graph tilts will change. Just try it. If you don’t know how to get the normal position back, just refresh the graph.

Looking from below we can see the “gearing”, because it is the ratio of total assets (depth) minus equity (width) to the equity (again: width). Of course we could replace the “total assets” with the “total liabilities” in the input-file to see the gearing even more directly. That’s a choice AnRep3D allows. GSK has a higher gearing than AstraZeneca and in 2016 (front) it’s even higher than in 2015 (rear). Ericsson, on the other hand, has a very low gearing as its bottom is, although not completely, close to a square.

3D graph bottom and oblique view

From the side, the Asset Turnover can be observed, as it is the ratio of height and depth of the “building”. Finally, the green area in the front-view (to the top), shows the return on equity. It’s quite impressive for AstraZeneca! Other observations can be made if the input is chosen differently as well. We already mentioned total liabilities instead of total assets and instead of profit, we could also take gross margin or EDITDA. It depends on what will be the most informative set for a special occasion.

This time we used the full version of the AnRep3D generator again. It’s neither expensive, nor free. If you want to try and work with the software, just go to https://anrep3d.com and download the free demo package (menu: demo). If you are already convinced, just contact us using info@anrep3d.com to obtain a full license.

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Using the free AnRep3D demo-generator: more steel!

Let’s get to the point very quickly this week. Last week I put a step aside and presented Kobe Steel. Two weeks ago I provided some links to sites talking about specific companies. One of those links was https://investorplace.com/2016/12/the-7-worst-stocks-to-buy-for-2017/  I realised two of the seven companies discussed there were steel-companies, just like Kobe-steel. So a good chance to move to the promised set and create graphs for two companies, allowing us to compare three as they are all about steel. The Annual Reports (2016) I found at:

http://ir.aksteel.com/getattachment/3f28dd55-5556-4125-b2fa-600782ff34c6/2016-Annual-Report and https://www.ussteel.com/sites/default/files/annual_reports/USS%20Form%2010-K%20-%202016.pdf

For US-Steel  the values I took I used their own overview at page 59: Revenue: $ 10261 MM Loss $ – 440 MM Equity $ 2274 MM Assets  $ 9160 MM

For AK-Steel  I had to sum numbers as their presentation is a little bit different from US-Steel, so I added their non-operational income to the operational part (please check because – as stated before – I’m merely demonstrating the power of AnRep3D, not analysing companies. I am certainly not providing advice, except that in my opinion it would be good to purchase an AnRep3D full license): Revenue  $ 6010 MM Profit  $  115.9 MM Equity $  90.7  Assets  $ 4036 MM

Putting the numbers into two different input-files (remember, the free demo-generator will only process one company a time) and feeding them to the generator we get two 3D graphs. The first graph for AK-Steel looked tiny because I took the same scaling as used for Kobe and US-Steel. With the second attempt the scaling (“shrink factor” reducing the large amounts) was set to 250 instead of 500 keeping the numbers twice as high this time. The two input-files looked like this:

Input-files AK and US Steel

The two graphs with Kobe-Steel next to them provide a nice series!AK-SteelUS-Steel   Kobe Steel

Clicking on the image will start the real 3D graph in your default browser (both Javascript and WebGL should be enabled – if you donn’t trust the connection, download the .htm file first, using right-click. Have a look at the file and start it locally by double clicking it in Windows Explorer). The 3D-graph can be manipulated in real-time: clicking left and moving the mouse will tilt the graph in different directions. Double clicking in the graph translates it and moves the centre at the same time. Just try it. If you don’t know how to get the normal position back, just refresh the browser window.

It is clear that US-Steel (USA) and Kobe-Steel (Japan) are rather similar, although US-steel shows a larger (relative) loss and low equity compared to the total assets (so the gearing is high) AK_Steel (USA) however,  looks very different in two ways: its equity is very low compared to the total assets (high gearing – this is why the graph looks like a sheet of steel) and it shows a profit instead of a loss. No conclusions, just visualisation!

I hope this is another valid demonstration of the power of AnRep3D. And this is only about the free demo-generator, not the full version coming with a license. This version is able to compare a series of companies over a range of years. Of coure a picture will say more than a thousand words, so I provide you wit a screenshot (no 3D graph available this time) of such a complex graph. Visit https://AnRep3D.com for more information.

Full license 3D graph

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Another step aside: Kobe Steel

This post should be about one of the companies from the list I presented last time. Yet I will pick another one for the second time. On the list (actually a collection of links presenting lists) two steel companies will be found, but not Kobe Steel. This companies has been in the news several times because of quality issues. We can only guess why employees tampered with the numbers but we can show the healthiness of Kobe Steel by presenting numbers from the annual report in a typical AnRep3D spatial graph. The annual report for 2017 is available at: http://www.kobelco.co.jp/english/ir/library/annualreport/2017annual/__icsFiles/metafile/2017/08/24/annualreport_2017.pdf It seems to be early to have an annual report for a year even not finished, but their book-year only holds the first quarter of 2017 as the other three are of 2016.

Total sales is $15,116 MM. It’s without extraordinary income being $72.575 MM so the total revenue would be $15,189 MM or about 15 billion dollars. The costs of sales are very high and then the other costs will nearly consume the remainder, leaving only a small amount of margin before taxes. And although there even is some net attribution from subsidiaries, the result after taxes is still a loss: $ -205.411 MM  The total assets are : $20,594 MM and Equity is $6,092 MM. Let’s put those values into an input-file for the free AnRep3D demo-generator:

Kobe Steel input

 

Remember (or read in the manual) that the first line is the parameter-line. It starts with the number of companies and the number of years (we can enter any value in the demo, e.g. 10,10 but as it only reads one single line of data the effect will be 1,1 so that’s what is shown here. The licensed full version will accept a large number of companies and years). After those first values the scaling-factor is provided. Here we divided all values by 500 to get values roughly between 1 and 100 which will provide a normal graph. Then the extra space between the buildings is mentioned but this is useless for the demo-generator as it only offers one single “building”. Finally the value for the font-size is entered. The second line holds the name of Kobe Steel and the year of the annual report, followed by revenue, profit,  equity and total assets.

The result looks like this (the 3D-graph was turned around before taking a screenshot to have a better view):

Kobe SteelA rather normal company with a small loss. Maybe the forged quality-numbers increased the sales a little bit or lowered the costs but the scandal it caused will cost much, much more! Manufacturing is difficult and a lot of capital is needed to get the factories going.

Clicking the image will start the real 3D graph in your default browser (both Javascript and WebGL should be enabled). If you don’t trust the connection, download the .htm file first, using right-click. Have a look at the file and start it locally by double clicking it in Windows Explorer. The 3D-graphs can be manipulated in real-time: clicking left and moving the mouse will tilt the graph in different directions (or move the observer’s viewpoint around a fixed graph – it’s relative of course). Double clicking in the graph translates it and moves the centre at the same time. As a result the way the graph tilts will change. Just try it. If you don’t know how to get the normal position back, just refresh the graph.

Philips 2016The same applies to Philips and it shows more or less the same ratios although there is a profit. Yet Kobe Steel doesn’t look like a company fighting for its life, seeing no other way out than selling a lower quality of steel and other metals!

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Using the demo-generator: shares with advice (+ or -) and BP

For the next posts and graphs, to be presented during the upcoming weeks, we will go with some positive and negative advices to be found on the Internet. I prepared a couple and will present the most relevant financial values from their annual reports in AnRep3D graphs.

https://investorplace.com/2016/12/10-dangerous-high-yield-dividend-stocks-to-avoid/view-all/#.WdoLijtpFdg mentions some high yield stocks to avoid and among them are: BP, GSK, AstraZeneca, Ericsson and Telefónica. We will use their 2016 annual reports.

https://investorplace.com/2016/12/the-7-worst-stocks-to-buy-for-2017/ presents the worst stocks to invest for 2017: US Steel, AK steel, Wells Fargo, Amazon and Facebook will be reviewed but Tesla Motors was already in one of the earlier blogposts. Of course we don’t know about 2017 yet, but we can go for 2016. The first half of 2017 would be an option, but with only half a year of profit it’s not a fair comparison.

http://www.iii.co.uk/articles/426614/15-top-stocks-first-half-2017 Talks about shares being the best for the first half of 2017. Too late to be bought now, but let’s have a look at their AnRep3D properties: G4S  and Rolls Royce are two examples. Easyjet was, like Tesla, covered for in an earlier presentation.

Some other option are the risky stocks: http://www.kiplinger.com/slideshow/investing/T052-S003-8-risky-stocks-that-are-worth-the-risk/index.html Alibaba, Bluebird Bio and Elbit Systems were presented in this article.

This time we will have a look at BP. The annual report 2016 says (but you should check yourself!): Total revenue $ 186,606 MM, Net profit $ 172 MM (before taxation a loss of  $ -2,295 MM), Equity $ 96,843 MM and Total assets $ 263,316 MM

In the parameter- and only input-line for the demo-generator I wrote:

1, 1, 5, 20, 4

BP, 2016, 186.6, 0.172, 96.8, 263.2

By the way: the fourth value in the parameter-line (first line) is meaningless. It says 20% extra space between the “buildings” should be added, but there is only one in the demo-generator. By keeping this position the structure of the input-file for the demo-version remains equal to the structure of the real generator and an input-file for the real generator can be used for the demo. But only the first data-line (second line) will be interpreted as the others are ignored in the demo-generator.

We can compare the graph with Shell – a company in the same (energy) business, but we cannot tell which company is larger and even not which of them earns more money as the two graphs are stand-alone so size of the “buildings” cannot be compared. Yet from the shape we can tell BP has a higher gearing as the equity is smaller in comparison to the total assets. We can also see that BP generates more revenue compared to its equity than Shell does, but then with BP the profit is rather thin (literally, in the graph).

BP 2016

Shell 2016 BP comp

 

 

 

 

 

Clicking on the image will start the real 3D graph in your default browser (both Javascript and WebGL should be enabled). If you don’t trust the connection, download the .htm file first, using right-click. Have a look at the file and start it locally by double clicking it in Windows Explorer.
The 3D-graphs can be manipulated in real-time: clicking left and moving the mouse will tilt the graph in different directions (or move the observer’s viewpoint around a fixed graph – it’s relative of course). Double clicking in the graph translates it and moves the centre at the same time. As a result the way the graph tilts will change. Just try it. If you don’t know how to get the normal position back, just refresh the graph.

Of course there is no obligation to choose the net profit (as we could replace other values as well). Taking the profit before taxation would show a very different graph for BP, but then we should create an alternative set of the other (reference-) graphs as well because we should not compare apples and oranges. If you like, try it yourself as it is easy.

This was only one company again, but the other links provide a lot of companies for us to look at in the near future. Of course you can have a look for those annual reports already and enter the relevant values (Revenue, Profit, Equity and Total Assets) in the free demo-generator. Then you will even see the graphs before we do. Good luck!

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Using the demo-generator: Toshiba

In the previous blogpost four very different types of companies were presented. Now it’s time to compare other companies to these “archetypical” shapes in AnRep3D. Remember, I promised to work with the free demo generator (so not the full version, for which a license has to be purchased) to show even this one can bring valuable insights. It can be downloaded from our site (free, even no registration) and I actually did so myself to be sure I use the same package as you will. Demo-graphs don’t offer absolute comparison but only relative as the graphs will hold just one company in one single year, so only one “building” instead of a complete Manhattan-like overview. Yet some ratios will still be visible in the graph and the shapes of the different graphs can be compared as well.

Toshiba is a company with a lot of exposure during the last year. A good reason to have a look and we will do it now. Toshiba’s annual report is in Yen, but as we don’t have an absolute comparison, there is no need to change this. It’s only about the ratios in the graph compared to ratios in another graph (relative comparison). The annual report is called 2016, but three quarters are in 2015 as the Toshiba book-year is not from January to December. The numbers represent the complete Group Totals, including non-controlling interests: Revenue (all) is ¥ 5,903.4 Bln, Profit (actually a loss) is ¥ -460.0  Bln, Equity ¥ 672.2 Bln, Total Assets ¥ 5,433.3 Bln. and the graph visualising those numbers looks like this:

Toshiba

Clicking on the image will start the real 3D graph in your default browser (both Javascript and WebGL should be enabled). If you don’t trust the connection, download the .htm file first, using right-click. Have a look at the file and start it locally by double clicking it in Windows Explorer.
The 3D-graphs can be manipulated in real-time: clicking left and moving the mouse will tilt the graph in different directions (or move the observer’s viewpoint around a fixed graph – it’s relative of course). Double clicking in the graph translates it and moves the centre at the same time. As a result the way the graph tilts will change. Just try it. If you don’t know how to get the normal position back, just refresh the graph.

The height and depth of the graph are almost the same, as the revenue is about the same size as the total assets. More important however is the equity: it doesn’t differ a lot from the loss and the equity is already very small compared to the total assets, so the gearing is high (partially because of the loss)! Indeed Toshiba seems to be a candidate for a take-over as some analysts say unless it’s able to extract a lot of money from the market to boost the equity – or to return to a healthy profit of course. Toshiba is mainly an manufacturer, so we should compare it with Royal Philips or Royal Dutch Shell and not with a bank like ING and certainly not with a HR-services and temp agency like Randstad. The revenue is quite good but the gearing is high and therefore a loss will have more impact than for e.g. Takeway. Below the “archetypical graphs” from the previous posts are repeated: Bank (ING), Gas-oil-renewables (R.D. Shell), HR-temp (Randstad) and and innovative start-up (TakeAway. Let’s see what Toshiba comes up with next year!

ING 2016
Shell 2016
Randstad 2016
Takeaway 2016

 

Disclaimer: this blog is meant to demonstrate the power of AnRep3D only. It doesn’t offer any professional analysis or advice! For more information about our company and product (the AnRep3D graph-generator) please have a look at https://AnRep3D.com

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Using the free demo-generator – relative instead of absolute comparison.

Last time I promised the new series of blog-posts would be about graphs generated with the new, free demo-generator. Of course we like it if people purchase a full license, but who would do so without knowing whether the product offers added value? That’s why we offer the demo-generator for free. Even no registration, no cookies – it’s completely anonymous! Yet we think some people won’t stay anonymous, because the will share their experiences. It’s up to you of course, so get a free copy of the package, including a manual and examples of input- and output-files (the graphs in html-format). Just go to: https://anrep3d.com/free-demo to have a look.

Is the demo-generator free because it’s useless? Certainly not! The only limitation is the number of lines to be read and therefore the number of “buildings”. Only the first data-line will be processed and therefore only one building will appear in the graph.
That’s the only difference!

Below an example is shown of a graph generated with the free demo-generator (I didn’t pay for it but downloaded it for free from our own website): it’s about Royal Philips, a well-known Dutch manufacturer focusing on medical equipment now but still owning a part of their old lighting division. The picture below is a collage of screenshots. Philips 2016

 

 

Double click it to see the real dynamic 3D graph. Clicking left and moving the mouse will tilt the graph in different directions (or move the observer’s viewpoint around a fixed graph – it’s relative of course). Double clicking in the graph translates it and moves the centre at the same time. As a result the way the graph tilts will change. Just try it. If you don’t know how to get the normal position back, just refresh the graph.

Having only on “building” means an absolute comparison between companies or for different years is not possible. Yet comparing companies will be possible in a relative way.

What does this mean? Well, the AnRep3D graphs show four basic characteristics of a company in a certain year: revenue, profit, equity and total assets. The exact names will differ between annual reports and sometimes the income from operations is much lower than the actual sales, but that’s up to you.

The main point is some companies have a very high equity to total assets ratio whilst others hardly have any equity (e.g. banks and insurance companies, mainly working with borrowed capital). Then some companies will make profit and others will report a loss (usually start-ups and very innovative companies like Tesla). The revenue can be very, very high when compared to the equity or total assets, but for others it’s very low (capital-intensive industries, with significant investments in e.g. production lines).

These industries will have very different shapes when presented in an AnRep3D graph. Your graphs could be compared with such basic examples and although the size won’t tell a lot (the graph for a huge company could look more or less the same as a very small one), the shapes will.

To facilitate such a relative comparison, I present four different examples of types of industries, to be recognised by their graphs. Five Dutch companies were selected. It’s about their characteristics so it doesn’t matter if you know them, as long as it’s clear what kind of business they are in.

The four are:

  • Royal Dutch Shell (Gas, Oil, Electricity and Renewables),
  • ING (a bank both retail and wholesale),
  • Randstad (mainly a temp and recruitment agency) and
  • Takeaway (a former start-up delivering meals from third parties).

For now, we will present some screenshot-collages. Clicking on the image will start the real 3D graph in your default browser (both Javascript and WebGL should be enabled). If you don’t trust the connection, download the .htm file first, using right-click. Have a look at the file and start it locally by double clicking it in Windows Explorer.

The real graphs can be manipulated in real-time: clicking left and moving the mouse will tilt the graph in different directions (or move the observer’s viewpoint around a fixed graph – it’s relative of course). Double clicking in the graph translates it and moves the centre at the same time. As a result the way the graph tilts will change. Just try it. If you don’t know how to get the normal position back, just refresh the graph.

ING 2016

Shell 2016

 

 

 

 

Randstad 2016

Takeaway 2016

 

 

 

Next week we will discuss the characteristics of the four companies, being a representative of very different types of industries. In between you can download your free demo-package and try it yourself: https://anrep3d.com/free-demo

Or have a look at our website: AnRep3D

 

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Starting a new series, using the demo-generator

After a long silent period it’s time to start another series of blog-posts. During the summer most potential  readers were at the beach, sailing or traveling through a foreign country, not thinking about business and work at all. So why bother?

Of course I discussed a lot of different annual reports, comparing  different companies or a  company through a series. Often it was a combination: several companies and a couple of years.  E.g: https://anrep3d.wordpress.com/2017/03/18/looking-at-the-3d-graph/ about banks in the Netherlands, https://anrep3d.wordpress.com/2017/03/26/oil-gas-companies-in-spatial-graphs/ about oil & gas companies, https://anrep3d.wordpress.com/2017/04/02/comparing-different-types-of-companies-in-a-spatial-graph/  about very different industries in comparison, https://anrep3d.wordpress.com/2017/06/17/visualising-a-mix-of-large-companies-in-a-spatial-graph-i/  again about  very different industries in comparison but this time really large ones, usually  well-known (or at least their products and services).

For all these examples a full licence was needed, but the demo-version of AnRep3D is free. Why not use our own free demo-package  for a change, to  generate graphs the way everybody could do with the free demo-generator? Well, next time I will present a couple of companies (only one company a time for just one specific year as the free demo will generate only one “building” in the graph). Don’t think a graph generator with the free demo-generator wouldn’t be interesting!

Because four values are combined in one single building (total assets, equity, revenue and profit) a lot of ratio’s can be deducted visually: revenue or profit compared to equity, revenue and profit, equity to total assets. All relative measure providing interesting insight.

Let’s try and work out a couple of companies next time. Hope you will like it and don’t forget: the demo-package can be downloaded for free. The generator comes with the manual and examples of input- and output-files (graphs, in html format, so basically webpages your browser can read and show). For now it’s available without any registration of name, email-address or phone number! No cookies either – completely anonymous, because we want everybody to have a look: https://anrep3d.com/free-demo

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