Buy Signal on Unilever

We had an Enter Long signal on August 13th 2020, triggered by our system on Unilever (UNIA-NL), the Dutch consumer staples company.

Unilever is a €72bn market cap and is one of the world leaders in food and cleaning products. Revenues are split between : 1/ hygiene and maintenance products (63%) including personal care products and household and laundry care products. 2/food products (37%) including culinary products, sauces, oils and margarines (Knorr, Hellmann's, Amora, Rama brands, etc.), ice creams and drinks (Magnum, Carte d'Or, Solero, Ben & Jerry's, Lipton, etc.). The geographic breakdown of sales is made of Europe (22%), Asia-Africa-Middle East-Turkey-Russia-Ukraine-Belarus (46%) and the Americas (32%).

Unilever was very resilient in H1-2020 as results were marked by a decrease of only -0.1% in underlying sales, with a drop in volumes of around -0.3%. In line with guidances, free cash flow increased by €1.3 bn, bringing it to €2.9 bn. In the last quarter alone, the dividend was maintained at €0.41. For the FY2020, Revenues and EBIT are expect to post a limited decline yoy.

Short term catalyst: Dividend yield, FCF generation.

This signal looks consistent with the bullish momentum on the European Personal Households sector.