The growth of the EPS is critical in understanding the current valuation of Novartis AG. It is typically displayed as a percentage and called the EPS growth rate, which is 7.14%. EPS growth is a vital measure of execution of the strategy for Novartis AG since it indicates how well the business is allocating resources to benefit shareholders.



Novartis AG is part of the drug manufacturers industry and trades as part of the healthcare sector. The company CEO is Joseph Jimenez. Novartis AG is a part of the healthcare industry. Its main activity is to research and develop healthcare products and pharmaceuticals such as oncology medicines, generic and biosimilar medicines and eye care devices.

Previous Intraday Performance:

The NVS shares had a previous change of -0.81% which opened at 86.16 and closed at 84.39. It moved to an intraday high of 86.20 and a low of 84.29.

SeekingAlpha:  Novartis’ crizanlizumab showed effect on vaso-occlusive crises in mid-stage sickle cell study

Historical Performance:

Over the last five trading days, NVS shares returned -1.70% and in the past 30 trading days it returned 0.86%. Over three months, it changed 9.19%. In one year it has changed 1.98% and within that year its 52-week high was 94.19 and its 52-week low was 72.30. NVS stock is 16.72% above its 52 Week Low.

Our calculations result in a 200 day moving average of 80.97 and a 50 day moving average of 84.15. Right now, NVS stock is trading 4.23% above its 200 day moving average and may be a good opportunity to buy.

SeekingAlpha:  Novartis’ crizanlizumab showed effect on vaso-occlusive crises in mid-stage sickle cell study

Liquidity:

The company has a market cap of $195.9b with 2.3b shares outstanding and a float of 2.3b shares. Trading volume was 2,824,210 shares and has experienced an average volume of 1,737,919 shares. Our calculation, using the current average volume and close price, leads me to believe that the liquidity is good.

Earnings:

The last annual reported EPS for Novartis AG was 3.25 which ended on 31st of December 2017, which according to the previous close, that is a PE of 25.97. Based on 2 analyst estimates, the consensus EPS for the next quarter is 1.34. The trailing twelve month EPS is 5.03, which comes to a trailing twelve month PE of 16.78. Historically, the PE high was 29.00 and the PE low was 9.20. If the stock reached its PE low, that would represent a price of 46.27, which is a decrease of -45.17%.

Below was the last reported quarterly earnings per share:
06-30-2018:  1.26
03-31-2018:  1.28
12-31-2017:  1.20
09-30-2017:  1.29



The dividend per share is currently 2.94, which is a dividend yield of 3.48%. Also, the payout ratio is 58.38%, therefore the dividend is safe according to our calculations.

Base on our calculations, the intrinsic value per share is 110.43, which means it might be undervalued and has a margin of safety of 23.58%

Indicators Also to Watch:

Based on the latest filings, there is 10.70% of institutional ownership. Short-interest was 2,018,105, which was 0.09% of shares outstanding. The short-interest ratio or days-to-cover ratio was 1.24. This stock has some short interest, but it might be normal and no need to worry if long the position.

I calculated the beta to be 0.83

Business Wire:  INVESTOR ALERT: Kirby McInerney LLP Reminds Investors That a Class Action Lawsuit Has Been Filed Against Pinduoduo, Inc. and Encourages Investors to Contact the Firm Before October 22

Fundamental Numbers:

Based on last reported financials, the company’s return on equity is 19.17%, return on assets is 10.20%, profit margin is 30.45%, price-to-sales is 5.17 and price-to-book is 2.57.

Company Score Card:

Results are out of six:
 0  : Growth Expectations Result
 3  : Financial Safety Result
 4  : Past Performance Result
 4  : Valuation Result
 5  : Dividend Safety Result
 3  : Overall Result

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Jake McWilliams
I am an independent trader, analyst and algorithmic trading expert, having worked both for the sell side (brokerage) and the buy side (fund administration). I have been trading professionally for about 20 years. I trade stocks and forex and I play both long and short positions in underlying asset or through options. I have experience with discretionary and fully automated systems (Metatrader and Quantshare).

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