Feature Recommendation | WSBS 521

Orange S.A. (ORAN) – The Telecom Leader in Rural France

Orange is a telecom company that boasts the leading fiber platform in rural France with 4.5 million awarded FTTH (fiber to the home) lines spread across 23 Public Initiative Networks. Headquartered in Paris, Orange was founded in 1990, and changed its name from France Telecom in 2013.

Its products include a variety of fixed telephony and mobile telecommunications, data transmission, and other value-added services to customers, businesses, and other telecommunications operators in France and internationally.

Its offerings include mobile services, such as voice, SMS, and data; fixed broadband and narrowband services, as well as fixed network business solutions, including voice and data; and convergence packages. Additionally, the company sells mobile handsets, broadband equipment, and connected devices and accessories.

Orange also provides IT and integration services comprising unified communication and collaboration services, such as LAN and telephony, consultancy, integration, and project management; hosting and infrastructure services, including cloud computing; customer relations management and other applications services; security services; and video conferencing, as well as sells related equipment.

Orange operates in France; Spain and Other European Countries; The Africa and Middle East; Enterprise; International Carriers & Shared Services; and Mobile Financial Services segments. But, as you can see in the following map, the heartbeat of Orange’s business is in rural France.

Orange Leading Fiber Platform in France

Orange recently sold a 50% co-controlling stake to a consortium of high-profile financial partners with an extensive track-record in infrastructure management and highly involved in local development in France. Its partners include Banque des Territoiries (Part of Groupe Caisse des Dépôts, founded in 1816); CNP Assurances, which has 390 billion euros in assets under management; and eDF Investment, which has 7 billion euros in assets under management.

The company saw its revenues rise by 0.5% in its first quarter, to 10,315 million euros, on strong growth in Africa and the Middle East (up 7.1% – the best performance in a decade) and Europe (up 2.2%).

Orange also set a new record for first-quarter FTTH net adds. Additionally, the company announced that 5G packages are now available in five countries, and it has 239 municipalities in France with 5G. During the quarter, Orange gained 2.8% convergent customers, now numbering 11.13 million. And mobile financial services added nearly 300,000 business customers, for a total of 1.5 million.

The shares of Orange are trading at a price-earnings ratio of just 6.13 and appear to be heavily discounted.

With a firm foundation of aggressive growth and the substantial assets of its new partners, we look for significant appreciation as the future looks very bright for Orange.

Please note: Orange is an ADR, American Depository Receipt, which is a negotiable certificate issued by a U.S. depositary bank representing a specified number of shares—often one share—of a foreign company’s stock. The ADR trades on U.S. stock markets as any domestic shares would.

As it’s often difficult for U.S. investors to buy shares on a foreign exchange, ADRs offer U.S. investors a way to purchase stock in overseas companies that would not be available otherwise.

Orange S.A. (ORAN)

52-Week Low/High: $ 10.15 – 13.03

Shares Outstanding: 2.66 billion

Institutionally Owned: .81%

Market Capitalization: $33.451 billion

Dividend yield: 5.60%, paid semi-annually

Website: orange.com

Why Orange:

Rural expansion accelerating

5G offers more opportunities for growth

New partnerships deliver financial strength

Healthy dividend

Undervalued

 

 

 

Technical Analysis
by Kate Stalter

You’ve heard the phrase, “nowhere to go but up.” While it’s dangerous to say that about any single stock, Orange’s chart sure does bring that saying to mind.

The stock was already in a downtrend prior to the great 2020 meltdown last February and March, having begun its southward migration in late 2019. It posted an almost incomprehensible 10 months in a row of declines.

The stock is up 6.83 % year-to-date and 2.10% in April.

Orange is currently forming a flat base, meaning it’s corrected less than 15% from peak to trough. It’s taking its time etching this formation, which began in early December.

It’s repeatedly hit resistance at $13. That’s the price you want to see it clear, preferably on heavier-than-average volume.

One good sign for the stock is the up/down volume ratio of 1.3. That means upside volume was 30% higher than downside in the past 50 sessions.

The stock is trending along its 10-day moving average, a sign that institutional investors are supporting the stock at a good price level, rather than selling.

oran 043021

Price Target: $17.50

Stop Loss: $10.10

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