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:

Aalberts Industries 2018
ABN AMRO 2018 
Accell Group 2018 
Ahold Delhaize Koninklijke 2018
Accsys Technologies 2018
Adyen 2018
Aegon 2018
AFC AJAX 2018
Air France-KLM PSE:AF, FR0000031122
Akzo Nobel AEX:AKZA NL0000009132
Altice AEX:ATC, NL0011333752
AMG Advanced Metallurgical Group NV 2018
Amsterdam Commodities ACOMO 2018
AND International Publishers
Apollo Alternative Assets AEX:AAA1, GB00B15Y0C52
Aperam AEX:APAM LU0569974404
Arcadis AEX:ARCAD, NL0006237562
ArcelorMittal AEX:MT, LU0323134006
ASM International AEX:ASM NL0000334118 2018
ASML 2018
ASR Nederland a buy under 30 Euros?
Batenburg Techniek
BAM Koninklijke Groep 2018 
Basic Fit ?! don't buy above 7,50
BE Semiconductor AEX:BESI, NL0000339760 2018
Beter Bed Holding AEX:BBED, NL0000339703

Berkshire Hathway run by Warren Buffett

Bever Holding: Small real estate fund, neg. cash flow, selling at 3,8 under 5,5 Euro book value. Plans to make money in near future. Buy?
BinckBank buy under 3 Euros
Boskalis Westminster Koninklijke AEX:BOKA, NL0000852580
Boussard & Gavaudan Holding Ltd. An expensive hedge fund.
Brill, Koninklijke kopen onder 22 Euro
Brunel International AEX: BRNL, NL0010776944
Coca-Cola European Partners
Corbion AEX:CRBN, NL0010583399
Core Laboratories AEX:CLB, NL0000200384
Ctac buy under €3,20
Curetis loss making biotech company = too difficult pile. Price fell from 7,14 to 5 June 2016-June 2017
Docdata: Now a  holding for the https://www.ease2.com/ Internet of Cars app, under construction.
Delta Lloyd now part of NN Group.
DPA Groep N.V. buy at €1,4
DSM Koninklijke 2018
Dutch Star One 2018
Esperite: Stem Cell Bank losing money hand over fist. Price fell from 3 to 0,70 June 2016-17
Eurocastle NPL Non Performing Loans in Italy 10% dividend FFO Funds From Operations pretty good, selling at 8,55 which is 7% under Net Asset Value
Eurocommercial Properties: Buy under 40?
Euronext buy at €30
Fagron compounding 
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 €35
Galapagos is a clinical-stage biotechnology company, not profitable (yet?).
GrandVision : Don't buy over €20
Groothandelsgebouwen N.V. buy under €50
HAL Trust
Headfirst Source part of Value8 holding. Figures? Earnings 2017 before Amortization 0,30?
Heijmans losing money check August 17 2017
Heineken, buy under 60?
Holland Colours buy under €70
Hunter Douglas, good balance sheet, buy if under €70
Hydratec buy at 55 sell at 65
ICT Group NV buy under 9 Euros
IEX Group Sales 2m, losses 600k, not for the defensive investor
IMCD buy under 35 Euros
ING Bank buy under 15 Euros
Intertrust too little history: Earnings per share 2016 Euro 1,3 x 15 = 19,5 Euros: Price = 19,86 Euros
Inverko used to be Newconomy, is for sale, garbage (disposal) Price = 0,60 Euros
Kardan made a loss 5 out of the last 5 years including 2016 and first Q 2017. Almost bankrupt?
KAS BANK cheap now under 10 Euros ?
Kendrion buy at 25 Euros
Kiadis Pharma bleeder, not for Defensive Investor, no sales
Klepierre French Retail Real Estate 5% dividend
KPN not for the Graham Defensive Investor
Porceleyne Fles Koninklijke Check under 5 Euros.
K. VolkerWessels check after August 31st, 2017
K. VOPAK buy under 35
K. Wessanen 
K. VolkerWessels
Lavide taking over childcare company sept 2017 
Lucas Bols 2018 buy now
Nedsense lege beurshuls prijs 5,6x intrinsieke waarde
New Sources Energy fraud
Neways 2018
NN Group 2018
Novisource turnaround
NSI Nieuwe Steen Investments HNK = Het Nieuwe Kantoor
Nedap NV Nederlandsche Apparatenfabriek
OCI NV buy under 16 Euros
Oranjewoud not a Defensive stock...
Pharming back of the envelope math
Philips Electronics buy around 20?
Philips Lighting
PostNL
Probiodrug loss making biotech, not a stock for the Defensive Investor
Randstad
Refresco Group  buy around 12 Euros?
RELX Group (formerly Reed Elsevier)
RoodMicrotec shareholder financed
Royal Dutch Shell
SBM Offshore 
Sif Holding
Sligro 
SnowWorld
Stern Groep buy under 25 Euros?
Takeaway.com making a loss, not for the Defensive Investor. Prijs 10x verkoop.
Tetragon investment fund including CLO (Collateralized Loan Obligations) NAV $20, price $12,44
Thunderbird Resorts: Negative book value and losing money.
TIE Kinetix Shares Outstanding: 2013:933 2014:1127 2015:1227 2016:1830
TKH Group
TomTom
Unibail Rodamco a buy?
Unilever after Kraft Heinz bid
Value8 Rat in mi Kitchen
Van Lanschot
Vastned Retail 2018
VNC = too difficult pile: Geert Schaaij + Selwyn Duijvestijn 
Volta Finance fund including CLO (Collateralized Loan Obligations)
Wereldhave, buy! 2018
Wolters Kluwer
Yatra Capital Indian Real Estate, losing money, stopping? Book 7,5 E, Price 5,75 E.

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

Friday, June 22, 2018

AFC Ajax and Invesco, not a bad investment

Last year I wrote about Invesco owning Ajax shares. The Value of Ajax seemed to be higher than the Price and both have increased since then: http://sinaas.blogspot.com/2017/05/ajax-football-club-intrinsic-value.html

I don't know how Ajax will do financially this year or next. Here is the Benjamin Graham Defensive analysis.  The price seems very reasonable:

Last year Ajax paid out a dividend of 24 cents per share, which surprised me a little. I thought they would spend profits on trying to win more games instead of returning capital to shareholders.

Here a simple Graham analysis:

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

SALES:[FAIL] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. AJAX's sales of €118 million, based on 2017 sales, fails 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. AJAX's current ratio €148m/€72m of 2.1 passes the 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 AJAX is €15 million, while the net current assets are €76 million. AJAX passes 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. AJAX made a small loss in 2015  and thus fails the test.

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. AJAX's E/P of 11% (using the average of 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. AJAX has a Graham number of (15 x €1,5 EPS x 1,5 x €8,6 Book Value) = €17 

Dividend 2017/2017 24 cents/12 = 2%

Comments, questions or E-mails welcome: ajb@valuemachinesfund.nl

Thursday, June 21, 2018

Ahold Delhaize overcomes Amazon + Whole Foods jitters


Ahold merged with Delhaize and value per share has increased from 7 to more than 12 Euros per share leading to an increase in the Graham value per share. After the Ahold Delhaize merger Amazon bought Whole Foods supermarkets in the US and investors dumped Ahold Delhaize shares. Hendrik Oude Nijhuis (www.beterinbeleggen.nl and co-founder of ValueMachines Fund) wrote in VEB Magazine in March 2018 that investors (Mr. Market) were (was) overreacting. Since then the company's Value has increased and the Price of the stock has increased even more quickly closing the gap between the two. (But I missed the boat = opportunity cost).

SCTOR: [PASS] AHOLD 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. AHOLD's sales of €63 000 million, based on 2017 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. AHOLD's current ratio €9 970m/€10 305m of 1,0 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 AHOLD is  €8 400 (was 4,526 million before the merger), while the net current assets are minus €335 million. AHOLD 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. AHOLD's EPS growth of 160% over that period passes the EPS growth test.

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. AHOLD's E/P of 6,5% just 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. AHOLD has a Graham number of (15 x €1,4 EPS x 1,5 x €11,55 Book Value) = €18,9

Dividend: 0,63 / 20,45 = 3%

Comments, questions or E-mails welcome: ajb@valuemachinesfund.nl

Wednesday, June 20, 2018

Aegon: intrinsic Value much higher than Price ?


AEGON has an annual report of 393 pages and a Market Cap of 11 billion Euros. Berkshire Hathaway (run by Warren Buffett) has a Market  Cap of 472 billion $ and an Annual Report of 124 pages....  Management at Aegon intends to return 2,1 billion Euros in a few years, that is 20% of the market cap...  Aegon seems cheap, but I don't understand it. I wonder why they don't buy back more shares (at this low price) rather than increasing dividends? 

SECTOR: FAIL AEGON is in the Financial sector, which is one sector that this methodology avoids. Technology and financial stocks were considered too risky to invest in when this methodology was published even decades ago. Several of Graham's criteria, like the Current Ratio and Debt to Current Assets, do not apply to financial companies. As a result, the company will not be able to pass this methodology, although we will include the remainder of the analysis for informational purposes.

SALES: PASS The investor must select companies of "adequate size". This includes companies with annual sales greater than 260 million Euros. AEGON's revenue of  32 973 million, based on 2017 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. AEGON is a financial stock so the current ratio analysis cannot be applied and this criterion cannot be evaluated.

LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: FAIL Long-term debt must not exceed net current assets. Companies that meet this criterion display one of the attributes of a financially secure organization. AEGON is a financial stock so this variable is not applicable and this criterion cannot be evaluated.

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. EPS for AEGON were negative in 2015 and thus fails this test.

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. AEGON's E/P of 13% 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. AEGON has a Graham number of (15 x €0,8 EPS x €11,9 Book Value) = €14,7

DIVIDEND: AEGON pays an increasing dividend of 0,27/5,43 = 5%.

Conclusion: Aegon seems cheap, but is outside my circle of competence. 

Comments, questions or E-mails welcome: ajb@ValueMachinesFund.nl

Tuesday, June 19, 2018

ASML ratio between intrinsic (Graham) Value vs Price over the years

Famed investor Peter Lynch said: "In business, competition is never as healthy as total domination." He might have liked ASML.

For a few years, I have been following ASML and often thought the price was too high based on this type of chart comparing Price and Graham value. It seems like the difference is getting bigger and bigger.


Peter Lynch made charts, comparing stock Price over a number of years with the growth in (15 times) Earnings per share. An important aspect of his charts is that they were logarithmic, which puts a certain annual percentage of growth in a clearer perspective, it also shows that differences are different than they seem. Below you can see that the share was relatively much more expensive in 2007 than during the Price dip in 2016 to 75 Euros. Above the 2016 price seems relatively expensive compared to the 2007 high point...


Benjamin Graham Defensive Analysis:

SECTOR: [FAIL] ASML is in the Technology sector, which is one sector that this methodology avoids. Technology and financial stocks were considered too risky to invest in when this methodology was published. At that time they were not the driving force of the market as they are today. Although this methodology would avoid ASML, we will provide the rest of the analysis, as we feel times have changed.

SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. ASML's sales of €9 053 million, based on 2017 sales, pass 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. ASML's current ratio €9 096m/3 132m of 2.9 passes the 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 meet this criterion display one of the attributes of a financially secure organization. The long-term debt for ASML is €4 700 million, while the net current assets are €5 964 million. ASML 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. EPS for ASML grew 256% during the past 10 years. The company passes this criterion.

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. ASML's E/P of 3% 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. ASML has a Graham number of (15 x €4,9 EPS x €23,36 Book Value) = €51

DIVIDEND 1,4/175 = 1%

Conclusion: ASML is a profitable growing company, but the stock price has outpaced the company's per share intrinsic value. 

Note: ASML stock holders who focus on price and earnings growth should be quite happy with the results over the past years:


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

Monday, June 18, 2018

Adyen: interesting stock price... not a Graham Defensive Stock at the moment.

Ayden went public in June 2018. The old shareholders who sold a little over 10% of their shares received 240 Euros, if I understand correctly. The first price normal share buyers were able to pay was 400 Euros, the institutions that were able to buy before opening, were able to pocket the difference?



The Price is very different than what a Benjamin Graham Defensive Investor might be willing to pay.

At Earnings per Sahe of roughly 5 Euros? The company is selling at a Price / Earnings ratio of over 80. Profits must increase by over 500% in the near future to justify the current price that "Mr. Market" is asking.

The company itself seems fantastic, great growth and a good balance sheet.

Sales: 1 500 million Euros in 2018?

Current Ratio: 1,3  , Long Term Debt is lower than Net Current Assets.

Dividend: Adyen intends to retain any profits to expand the growth and development of Adyen's business and, therefore, does not anticipate paying dividends to its Shareholders in the foreseeable future.

Chances are 240 Euros is nearer intrinsic value than today Price of 411 Euros? Time will tell.

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

Accsys intrinsic value?

Accsys Technologies PLC (LSE:AXS and AS:AXS) is an intellectual property and chemical technology group focused on the transformation of wood through acetylation. This is done by reacting the wood with acetic anhydride, which comes from acetic acid (known as vinegar when in its dilute form).
Bron: FD
When the free hydroxyl group is transformed to an acetyl group, the ability of the wood to absorb water is greatly reduced, rendering the wood more dimensionally stable and, because it is no longer digestible, extremely durable.

Year ending March 31st 2018, sales have gone up 6%, but gross profit euros has decreased. The company is losing 8 cents per share, but will open new production in 2018 and 2019.

You could argue that financing new projects like this (and in the past shipping companies like the VOC, railroads, etc) is what public equity is meant for.

The company has sold 20 million shares in the past year to bring in more funding.

Book value is roughly Equity 43m Euros / 111m shares = 40 cents per share book value.

A price of 20 cents per share might be interesting? The price is... 92 cents per share.

Conclusion: Not an investment for the Graham Defensive Investor. 

Comments, questions or E-mails welcome: ajb@valuemachinesfund.nl 

Thursday, June 14, 2018

Accell Group NL0009767532 price has dipped back towards intrinsic value

Conclusion May 2017: Accell's stock price has had a good run. There is a chance it might be bought for around 33 Euros, but I would sell above 30.

Last year it looked like a good idea to sell Accell http://sinaas.blogspot.com/2017/05/accell-group-aex-accel-nl0009767532.html if you didn't sell, you saw the share price dip by almost 50%. Profits were also down in 2017 due to problems and taxes in the US, so (Graham) Value has also gone down.

Graham Defensive analysis based on The Intelligent Investor book Chapter 14:

SECTOR: [PASS] Accell 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. Acell's sales of €1 068 million, based on 2017 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. Accell's current ratio €507m/€280m of 1.8 fails the 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 meet this criterion display one of the attributes of a financially secure organization. The long-term debt for Accell is €126 million, while the net current assets are €227 million. Accell passes 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. Accell's Earnings per Share have not grown over the past ten years due to the expensive takeover of Raleigh North America.

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. Accell's E/P of 6% (using an estimate of next year's 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. Accell has a Graham number of (22,5 x €0,94 EPS x €10,90 Book Value) = €15,3. Today's price is: €19,-

Dividend: Accell pays a dividend of roughly €0,50, which is 3%


Conclusion: "Too difficult pile", if the price drops below 15 Euros a buy. Shareholders will be unhappy that management did not accept Pon's offer of 33 Euros last year. Will another lower offer now be acceptable?

See: www.beterinbeleggen.nl for analysis of quality companies.

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

Friday, June 08, 2018

Lucas Bols: Price is now lower than intrinsic Value

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

SALES: FAIL] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. Lucas Bols' sales of €92 million, based on 2017 sales, fails 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. Lucas Bols' current ratio €42m/€20m 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 Lucas Bols is €156 million, while the net
current assets are €22 millionLucas Bols fails this test.

LONG-TERM EPS GROWTH: [PASS] [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. Lucas Bols' EPS growth over that period is a number we don't have because the IPO was in 2015.

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. Lucas Bols' E/P of 8,8% (using last year's 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. Lucas Bols has a Graham number of (15 x €1,6 EPS x 1,5 x €15 Book Value) = €21,4 and passes this test.

DIVIDEND €0,60/€18,15 = 3,3%

Conclusion: Lucas Bols seems fairly priced just above €18,15. There is a margin of safety at the moment.

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

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