Inditex (BME:ITX)

Bunyamin Bardak

Company Background• Spanish multinational clothing company headquartered in the Galicia, Spain.

• Biggest fashion retailer in the world by sales. It has 8 brands including flagship store Zara, Massimo Dutti, Pull&Bear, and Oysho.

• More than 7,000 stores across 90 countries, and a strong online presence across 40 countries.

• Operations based in Spain, allowing quick distribution to Europe - it’s biggest market.

• Competitive advantage in supply chain management - it can take as little as 15 days for new garments to go from the design stage onto store shelves.

Share Price Performance• Steady rising

performance of the share price

• Inditex shares gained 15.5% in 2015. This is compared with a fall of 9.1% of the Euro Stoxx 50 and a fall of 15.3% of the Ibex 35, during the same period.

Key Technical Data & Statistics

Key Technical Data & Statistics – 3 Largest Apparel Retailers

Inditex H&M Fast RetailingMarket Cap ($ US billions) 102.22 40.07 37

P/E (ttm) 32.01 22.74 79.93

EBITDA Margin 23% 18.43% 10.99%

Net Income Margin 13.53% 9.69% 3.03%

Debt/Capital Ratio 1.93% 6.44% 32.42%

Revenue Growth (yoy) 15.37% 19.44% 6.23%

Dividend Yield (5-year average) 1.91% 3.22% 0.99%

R.O.E (ttm) 28.61% 34.37% 7.25%

Major Events & Recent News

Technical Indicators

RSI below 30 means that the stock is oversold, and when it moves above 30 it is a bullish indicator. Here we see RSI go below 20 and then on the rise, therefore could be a good time to buy.

The closer the price moves to the lower band, the more oversold the stock is. Here we are seeing the price touch the lower band and starting to move away. This supports the RSI indicator that the stock may be oversold, and hence it could be a good time to buy

The MACD line is below the signal line which indicates a bearish market, and individuals are selling the stock. However, in combination with the RSI and the Bollinger Bands we could conclude that the stock is oversold and could soon pick up.

Analyst Expectations (Brokers etc)

3 Main Reasons To Invest1. Consistent revenue growth, strong profit margins, and sound capital

structure – superior to rivals H&M and Fast Retailing Group.

2. Share price remained resilient despite times of uncertainty (FX swings).

3. Competitive advantage in supply chain management, and experienced management taking the right steps by expanding online space.

Any Questions?