Bic, bringing simplicity and joy to consumers in a responsible and sustainable way, Equity trading strategy

With more than 75 years of existence, Bic is an international leader in the fields of stationery, lighters and razors. It all started with writing and the first Bic ballpoint pen, which was created in 1950. Thanks to the success of the pen, the company expanded internationally, starting with Europe and then settling in all four corners of the world. The growth of the company continues and in the 70s, Bic launches its first pocket lighter as well as its first razor. These three products represent the group’s three divisions: Human Expression (writing), Flame for Life (lighters) and Blade Excellence (razors). Bic continues to expand its product portfolio through the acquisition of several companies such as Tipp-Ex, Djeep or even more recently InkBox.

Bic is a very committed company whose ambition is to improve the learning conditions of 250 million children around the world, in particular through the Bic Foundation. The company is also committed to taking action against global warming by making the transition to 100% renewable energy consumption by 2025. The commitment to sustainable development is longstanding, in 1993 the company created Bic Evolution, which is a range of pencils made from recycled materials. In 2022, the group received recognition for all the actions carried out within the CSR framework by being included in the Axylia truth 40 2022 (testifying to the company’s ability to honor its CO2 bill and to continue to create lasting value). Bic has reached the “Prime” level defined by ISS ESG Corporate in terms of sustainable development.

At the beginning of August, Bic published its results for the second quarter as well as the first half of 2022. The company’s turnover is up 15.5% at constant exchange rates. There was strong growth momentum in all divisions thanks to a good strategy of increasing prices and increasing volumes. The Human Expression division was driven by back-to-school deliveries, the volume of which increased by 20%. The Flame for Life division works very well in the United States, the region represents 51% of growth. The pocket lighter market is down 11.6% but Bic is outperforming and continuing to gain market share. Blade Excellence is a division which is developing its B2B activity and which has expanded this professional clientele with three new clients in the first half of 2022. E-commerce turnover is up 14% in the first half thanks to market performance developing as in India and Brazil.

The group’s gross margin for the first half of 2022 decreased by 2 points following the impact of the increase in raw material prices and unfavorable currency effects. Bic nevertheless shows good resilience in the face of headwinds thanks to a good pricing policy and operational leverage.

Bic is a beautiful French company that aims to offer quality products for everyone. Over the past few years, the company has diversified and established itself all over the world. It is a company with good fundamentals and strong human and societal values.

The Bic value broke its long-term downward trend line by crossing, in April 2021, the upper limit of the long-term downward channel active since August 2015 at 51.65, followed by a necessary throw back before starting a stronger recovery.

A reverse head and shoulders shoulder has potentially been forming since May 2021. We would recommend placing a buy on the pullback at 52.45, which represents the low point of the first shoulder formed from May to July 2021, and strengthen the position in case of overflow of the neck line located at 60.5.

The target is at 79 euros, which is 50% up from the bottom of the shoulder and 30% up from the neck line. We set our protective stop at 47.98, or 8% maximum loss. The risk/reward ratio is then 1:5 and 1:3 respectively.

Promotional recommendation.

Play this strategy with:

Leave a Comment