Buy Signal on Signify NV

We had an Enter Long signal on August 12th 2020, triggered by our system on Signify (LIGHT-NL), the Dutch lighting company.

Signify is a €3.5bn market cap and the world leader in lighting for professionals and consumers, and lighting for the Internet of Things. Signify offer is based on Philips products as it is a spin-off of the later. The revenue breaks down between 1/ Business group for professionals (50% of sales) providing professional lighting to the public sector, offices and industry, as well as to the retail trade and the hotel industry; 2/ LED business group (36% of sales) including LED lamps and LED electronics companies; 3/Lamps business group (10%) including a wide range of conventional lamps and electronic products; and 4/ Home business group (4%), the offer includes functional household lighting and connected household lighting (Philips Hue).

Signify said its Q2-2020 operating profit was up 14% yoy as the company slashed expenses amid falling sales. Quarterly EBITA for Dutch lighting maker (formerly Philips Lighting) was € 119 m, up from € 104 m a year earlier. Comparable store sales fell by 22% in Q2-2020 to €1.46 bn but the results showed resilience in a difficult market environment.

Short term catalyst: M&A, deleveraging.

This signal looks consistent with the bullish momentum on european industrial stock.