Monday, April 13, 2099

Valuation of all stocks listed in Holland AEX All Share AAX: Benjamin Graham Defensive Investor method

Warren Buffett: "Well, start with the A’s."  Click on the companies below for Graham Evaluation:
Beter Bed Holding AEX:BBED, NL0000339703
Bever Holding: Small real estate fund, bleeder, selling under 5 Euro book value.
Boskalis Westminster Koninklijke AEX:BOKA, NL0000852580
Boussard & Gavaudan Holding Ltd. An expensive hedge fund.
Brunel International AEX: BRNL, NL0010776944
Corbion AEX:CRBN, NL0010583399
Core Laboratories AEX:CLB, NL0000200384
Ctac buy under €2,50
Curetis loss making biotech company = too difficult pile
Docdata: Cocoondd telt 0,35 euro in contanten neer per aandeel.
Delta Lloyd numbers expected August 17th 2016 with 220 million new shares.
DPA Groep N.V. buy at  €1,1
Esperite: Stem Cell Bank losing money hand over fist.
Eurocastle NPL Non Performing Loans in Italy... Results August 3rd
Eurocommercial Properties: Buy at €35 
Euronext buy at €30
Fagron EPS -6,3 and negative Book Value per share -€2, not for the defensive investor...
ForFarmers a Graham Defensive Pick up to €6,50
Flow Traders outside my circle of competence, seems like a buy under €30 
Fugro's Graham Value has decreased, buy at €10? 
Gemalto buy under €45
Galapagos is a clinical-stage biotechnology company, not profitable (yet?).
Hydratec buy now, sell at €60
Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com

Saturday, September 17, 2016

Fugro buy recommendation 2014 turned out to be mistake

The Benjamin Graham graph looked like this: 

Fugro passed all the criteria, except debt: current ratio and long term debt. The oil tide has since gone out and business has been very slow, forcing Fugro to sell assets to pay down debt, because banks link debt to earnings not assets. At a certain point there was a Fugro panic and the stock fell to €9 and insider buying and buying by Boskalis drove the stock above €20, but now it has fallen together with the Graham value. If (when?) the oil market picks up, results should improve at Fugro, but damage has been done.  


 SECTOR: [PASS]  Fugro is neither a technology nor financial Company, and therefore this methodology is applicable. 

SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. Fugro's sales of €2,379 million, based on 2015 sales, pass this test.

CURRENT RATIO: [FAIL] The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. Fugro's current ratio €1,172m/€705m of 1.7 fails the test.

LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: [FAIL] For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that do not meet this criterion lack the financial stability that this methodology likes to see. The long-term debt for Fugro is €825 million, while the net current assets are €467 million. Fugro fails this test.

LONG-TERM EPS GROWTH: [FAIL]  Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. Companies with this type of growth tend to be financially secure and have proven themselves over time. Fugro's EPS have been negative over the past years, Fugro fails this test.

Earnings Yield: [FAIL] The Earnings/Price (inverse P/E) %, based on the lesser of the current Earnings Yield or the Yield using average earnings over the last 3 fiscal years, must be "acceptable", which this methodology states is greater than 6,5%. Stocks with higher earnings yields are more defensive by nature. Fugro's E/P of 4% (using the average of last 3 years earnings) fails this test.

Graham Number value: [FAIL] The Price/Book ratio must also be reasonable. That is the Graham number value must be greater than the market price. Fugro has a Graham number of (22,5 x €0,6 EPS x €14 Book Value) = €12,7 and fails this test.

Conclusion: I was wrong. 

See: www.beterinbeleggen.nl for more in depth, qualitative analysis of "good" companies.

Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com

Friday, September 16, 2016

ForFarmers seems like a good stock for the defensive Intelligent Investor. Graham intrinsic value.


ForFarmers is a company that used to be a co-op that recently went public.  http://www.forfarmers.nl/

SECTOR: [PASS]  ForFarmers is in the animal feed sector. Technology and financial stocks were considered too risky to invest in when this methodology was published. 

SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. ForFarmers' sales of €2 247 million, based on 2015 sales, passes this test.


CURRENT RATIO:  [PASS] The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. ForFarmers' current ratio €414m/€193m of 2.1 passes this test.

LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: [PASS] For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that do not meet this criterion lack the financial stability that this methodology likes to see. The long-term debt for ASM is €132 million, while the net current assets are €221 million. ForFarmers passes this test.

LONG-TERM EPS GROWTH: [PASS] Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. Companies with this type of growth tend to be financially secure and have proven themselves over time. ForFarmers' earnings have increased 70% since 2013.


Earnings Yield:  [PASS] The Earnings/Price (inverse P/E) %, based on the lesser of the current Earnings Yield or the Yield using average earnings over the last 3 fiscal years, must be "acceptable", which this methodology states is greater than 6,5%. Stocks with higher earnings yields are more defensive by nature. ForFarmers' E/P of 7% (using the average of the last 3 years Earnings) passes this test.


Graham Number value: [PASS] The Price/Book ratio must also be reasonable. That is the Graham number value must be greater than the market price. ForFarmers has a Graham number of (15 x €0,5 EPS x 1,5 x €3,8 Book Value) = €6,5 


Dividend: €0.24/€6,08= 4% 

Conclusion: ForFarmers has a strong balance sheet, an easy to understand business and seems like a good pick for the Defensive Investor at a price of €6,08 in September 2016. 


Recall Warren Buffett's rules: Rule Number 1: Don't lose money. Rule Number 2: Don't forget rule Number 1. ForFarmers isn't going to make you rich overnight, but you probably won't lose all your money. 

See: www.beterinbeleggen.nl for more in depth, qualitative analysis of "good" companies.


Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com

Tuesday, September 06, 2016

Flow Trader's and Mr. Market's mood swings. Intrinsic Value estimate using Graham Defensive method


SECTOR: [???] Flow Traders provides liquidity for ETP Exchange Traded Products. It went public in 2015 at a price of around €35, the price climbed to €50 and now has dropped below the IPO level. I  am not an expert and don't know how much of an "arms race' in technology is involved.


SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. Flow Traders' sales of €400 million, based on 2015 sales, passes this test.

CURRENT RATIO: [FAIL] The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. Flow Trader's current ratio €1 180m/€2 197m of 0,5 is quite low and fails this test.

LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: [FAIL] For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that do not meet this criterion lack the financial stability that this methodology likes to see. The long-term debt for Flow Trader's is €2 155 million, while the net current assets are - €1 017 million. Flow Traders fails this test.

LONG-TERM EPS GROWTH: [PASS]  Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. Companies with this type of growth tend to be financially secure and have proven themselves over time. Flow Trader's earnings are growing quickly, but the long term results are difficult to determine because of its corporate history and recent IPO. 

Earnings Yield:  [PASS]  The Earnings/Price (inverse P/E) %, based on the lesser of the current Earnings Yield or the Yield using average earnings over the last 3 fiscal years, must be "acceptable", which this methodology states is greater than 6,5%. Stocks with higher earnings yields are more defensive by nature. Flow Trader's E/P of 8% (using last year's Earnings and taking growth into account) passes this test.

Graham Number value: [FAIL]  The Price/Book ratio must also be reasonable. That is the Graham number value must be greater than the market price. Flow Trader's has a Graham number of (15 x €2,2 EPS x 1,5 x €5,5 Book Value) = €16 

Dividend: €1.5/€28 = 5%  (Flow Trader's dividend varies. It pays out 50% of profit as dividend).

Conclusion: Flow Traders seems to be creating value and is a better buy under €30 than at €50, but is not a stock for the Defensive Investor. One issue that may be risky is the amount of debt on the balance sheet. 

For more value investing stock analysis see: www.beterinbeleggen.nl

Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com

Monday, September 05, 2016

Hydratec Graham value intrinsic valuation. In the long run the market is a weighing machine.


SECTOR: [PASS]  Hydratec is a small conglomerate of industrial systems and components companies. 


SALES: [FAIL] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. Hydratec's sales of €160 million, based on 2016 sales estimates, fails this test.

CURRENT RATIO: [FAIL] The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. Hydratec's current ratio €58m/€55m of 1,1 is too low.

LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: [FAIL] For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that do not meet this criterion lack the financial stability that this methodology likes to see. The long-term debt for Hydratec is €18 million, while the net current assets are €3 million. Hydratec fails this test.

LONG-TERM EPS GROWTH: [PASS] Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. Companies with this type of growth tend to be financially secure and have proven themselves over time. Hydratec's earnings per share have increased 140% since 2006. 

Earnings Yield: [PASS] The Earnings/Price (inverse P/E) %, based on the lesser of the current Earnings Yield or the Yield using average earnings over the last 3 fiscal years, must be "acceptable", which this methodology states is greater than 6,5%. Stocks with higher earnings yields are more defensive by nature. Hydratec's E/P of 8% (using this years estimated Earnings) passes this test.

Graham Number value: [PASS] The Price/Book ratio must also be reasonable. That is the Graham number value must be greater than the market price. Hydratec has a Graham number of (15 x €4,3 EPS x 1,5 x €37 Book Value) = €58 

Dividend: €1,37/€46 = 3% ?  


Conclusion: Hydratec is steadily increasing in value and the stock is not expensive, but the margin of safety (korting) is getting smaller. There have been a number of take-overs and sales of companies recently, so the underlying cash flow of the current companies should be looked at closely. In 2015 profit per share was €8,82, so you may think the PE is $46/$8,82 = 5 but €6,30 of last year's EPS was attributable to one off transactions. This year's (2016) earnings should be around €4 per share. 

See www.beterinbeleggen.nl for valuation of great companies.

Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com

Friday, September 02, 2016

"Look through earnings" to the max.

For a value investment fund why stop at "Look through earnings" (see below). 


Why not make a summary of Revenue (Top Line) of all your stocks? 

If you own 10% of the stock of a company that has $100 in sales, your fund has "Look through revenue of $10" 

You can do the whole Income Statement, Balance Sheet and Cash Flow. Investors that way can see if you are buying into leveraged businesses with a lot of risk, etc. 

When the stock prices go down, you see you can buy shares of the whole 'Look through "Company" ie. invest in the fund for less.  

'Look-Through Earnings'

Look-through earnings include the profits that a company pays to its shareholders in the form of dividends and the retained earnings that the company uses to expand its operations. This concept was popularized by Warren Buffet to analyze the overall earnings-generating capabilities of the firm. The idea is that all of these profits have value to investors - the dividends provide an immediate benefit, while the retained earnings should increase the stock's value in the future.


Read more: Look-Through Earnings Definition | Investopedia http://www.investopedia.com/terms/l/look-through-earnings.asp#ixzz4J5yCZSOn
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Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com

Wednesday, August 31, 2016

The intrinsic value of Euronext itself. The house always wins? Benjamin Graham Valuation.



SECTOR: [PASS] Euronext  runs stock exchanges. It went public in 2013-14.


SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. Euronext's sales of €518 million, based on 2015 sales, passes this test.

CURRENT RATIO: [FAIL] The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. Euronext's current ratio €158m/€156m of 1,0 fails this test.

LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: [FAIL] For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that do not meet this criterion lack the financial stability that this methodology likes to see. The long-term debt for Euronext is €117 million, while the net current assets are  €2 million. Euronext fails this test.

LONG-TERM EPS GROWTH: [FAIL] Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. Companies with this type of growth tend to be financially secure and have proven themselves over time. Euronext's earnings are growing, but the long term results are difficult to determine because of its corporate history and recent IPO. 

Earnings Yield:  [PASS]  The Earnings/Price (inverse P/E) %, based on the lesser of the current Earnings Yield or the Yield using average earnings over the last 3 fiscal years, must be "acceptable", which this methodology states is greater than 6,5%. Stocks with higher earnings yields are more defensive by nature. Euronext's E/P of 7% (using last year's Earnings and taking growth into account) passes this test.

Graham Number value: [FAIL]  The Price/Book ratio must also be reasonable. That is the Graham number value must be greater than the market price. Euronext has a Graham number of (15 x €2,5 EPS x 1,5 x €7 Book Value) = €20 

Dividend: €1.24/€38 = 3% 

Conclusion: Euronext is creating value and was a good buy at €30 recently, but is not a stock for the Defensive Investor. 

For more value investing stock analysis see: www.beterinbeleggen.nl

Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com

Monday, August 29, 2016

Francisco Parames Spanish Superinvestor quantifies intrinsic value and Margin of Safety

Spanish self taught value investor achieved a 2786% return between 1993 and 2015 compared to the index of 632% (Spanish and European stock markets).

Param├ęs is known in the financial world by the strong belief he keeps in his "Margin of Safety" investment philosophy, which prevented him from investing in technology stocks in 2000 or in companies in the banking and overheated Spanish real estate sector in 2007. Wikipedia link.

When many people were in a panic during the financial crisis, Parames showed his investors, that the time to invest heavily in equities had come.

The "Net Asset Value" is the "Mr. Market" stock price of the Fund. That is the price at which you can buy and sell on the day. The "Target price" is the intrinsic value as calculated by Parames. The "Margin of Safety" is the gap between the intrinsic value and the market price. When buying (investing) the larger the gap the better. In the short run the market price can swing wildly, but in the long run it approaches the intrinsic value. Investors who bought at 57 Euros in 2009, could sell today in 2016 for 175 Euros. A return of roughly 25% per year.  

Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com

Gemalto valuation intrinsic value Benjamin Graham Defensive method



SECTOR: [FAIL]  Gemalto  is a IT Security company in a rapidly changing environment. 


SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. Gemalto's sales of €2 131 million, based on 2015 sales, passes this test.

CURRENT RATIO: [FAIL] The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. Gemalto's current ratio €1650m/€967m of 1,7 is good but too low for this test.

LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: [FAIL] For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that do not meet this criterion lack the financial stability that this methodology likes to see. The long-term debt for DPA is €800 million, while the net current assets are  €683 million. DGemalto fails this test.

LONG-TERM EPS GROWTH: [FAIL] Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. Companies with this type of growth tend to be financially secure and have proven themselves over time. Gemalto's earnings were negative in 2006 and have decreased over the past 3 years. 

Earnings Yield: [FAIL] The Earnings/Price (inverse P/E) %, based on the lesser of the current Earnings Yield or the Yield using average earnings over the last 3 fiscal years, must be "acceptable", which this methodology states is greater than 6,5%. Stocks with higher earnings yields are more defensive by nature. Gemalto's E/P of 4% (using the average Earnings over the past 3 years) fails this test.

Graham Number value: [FAIL]  The Price/Book ratio must also be reasonable. That is the Graham number value must be greater than the market price. Gemalto has a Graham number of (15 x €2,1 EPS x 1,5 x €29 Book Value) = €36 

Dividend: €0.47/€61 = 1% 

Conclusion: Gemalto is not a stock for the Defensive Investor. 

For more value investing stock analysis see: www.beterinbeleggen.nl

Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com

Wednesday, August 10, 2016

De Zeven Zekerheden van C&A




Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com

Tuesday, August 02, 2016

Eurocommercial Properties intrinsic value Graham Analysis


Eurocommercial Porperties owns store real estate in Sweden, France and Italy. Retail sales are growing in those countries in 2016 with the exception of Paris due to terrorist attacks.

SECTOR: [PASS]  Eurocommercial Properties  is a real estate company. 


SALES: [FAIL] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. Eurocommercial Properties' sales of €200 million, based on 2016 sales, just fails this test.

CURRENT RATIO: [FAIL] The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. Eurocommercial Properties' current ratio €115m/€197m of 0,6 is too low.

LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: [FAIL] For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that do not meet this criterion lack the financial stability that this methodology likes to see. The long-term debt for Eurocommercial Properties is €1 221 million, while the net current assets are - €82 million. Eurocommercial Properties fails this test.

LONG-TERM EPS GROWTH: [FAIL] Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. Companies with this type of growth tend to be financially secure and have proven themselves over time. Eurocommercial Properties' earnings were negative in 2013. 

Earnings Yield: [FAIL] The Earnings/Price (inverse P/E) %, based on the lesser of the current Earnings Yield or the Yield using average earnings over the last 3 fiscal years, must be "acceptable", which this methodology states is greater than 6,5%. Stocks with higher earnings yields are more defensive by nature. Eurocommercial Properties' E/P of 6% (using this years estimated Earnings) fails this test.

Graham Number value: [PASS] The Price/Book ratio must also be reasonable. That is the Graham number value must be greater than the market price. Eurocommercial Properties has a Graham number of (15 x €2,5 EPS x 1,5 x €32 Book Value) = €42,7 

Dividend: €2/€40 = 5% ?  


Conclusion: Eurocommercial Properties has a lot of debt (which is normal for real estate companies) and good dividend. The Earnings Yield is low.  This might be a buy at 35 Euros.

See www.beterinbeleggen.nl for valuation of great companies.

Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com