Unilever, an international giant operating in the spheres of consumer goods, food, beverages and more, has made its way to the IQ Option trading platform. The company can be found in the CFD section of the trading room. Don’t trade Unilever until you read these 4 facts:
1) Unilever is huge! Just imagine that the company currently operates in 190 and has an annual revenue of €53 billion (as of 2017). 13 brands in its portfolio can boast annual sales of €1 billion or more. It is currently the world’s largest consumer goods company by revenue and also Europe’s seventh most valuable company. The company is organized into four main divisions that include Foods, Refreshment, Home Care and Personal Care. But not only this company is huge, it is growing daily.
2) Q1 2018 results of the company look good, if not impressive. In its earnings report the company mentioned that the market value has appreciated 3% and the market volume has surged 1% over the course of three month. Global GDP growth of 3.2% (higher than in 2016 and 2017) is expected to stimulate the growth even further. Underlying sales growth is estimated to be at 3.7%. Cost-cutting initiatives, introduced by the company, drive margin — Unilever has over €1 billion in supply chain savings, out of which 2/3 are later being reinvested in growth. All in all, positive dynamics hint at the long-term growth potential.
3) But Zacks.com experts actually believe it is time to sell Unilever shares. Why? According to them, there is only one major metric to be taken into account when considering an investment in a particular company — and it is Earnings Per Share (EPS). When earnings per share goes down, the stock price is expected to plunge, as well. And vice versa, when earnings per share grows, the share price will go up. Both statements seem to be logical. The main purpose of every company is to generate profit. When the enterprise fails to do so, it should be traded at a discount. Not being able to demonstrate sufficient EPS growth rate Unilever will, according to Zacks, grow slower than the industry in general.
4) Unilever has outlined the following priorities for the current year in its Q1 2018 earnings report. Integration of Foods & Refreshment is supposed to bring two related divisions even closer. Innovation plays an important role in the business model of the company. After all, cost-cutting initiatives can be as profitable as new means of production and revolutionary new R&D projects. The company plans to focus on non-value-added cost, as Unilever aims to eliminate costs that do not create any additional value for the customer. The company also plans to buy back shares worth €6 billion until the end of the current year. Suchlike initiatives bring the stock price up by simultaneously increasing the demand and decreasing the number of outstanding shares.
Whether Unilever shares will go up or down, you’ve got a chance to trade the company successfully. Choose ‘BUY’ if, according to your, ULVR stock can be expected to go up and ‘SELL’ if, on the contrary, it is about to plunge.
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