Monday, August 24, 2015

Ten Cate being taken private at Graham Value

TEN CATE is being taken private for €24 . Good for shareholders who bought at levels under the Graham Value, but not those who paid more than €30 per share.  see also

Wednesday, March 06, 2013

Ten Cate earnings per share from €2,3 in 2011, drop to €0,9 in 2012

Ten Cate old

Chart above before 2012 results, chart below with 2012 results.
Ten Cate new
SECTOR: [PASS] Ten Cate 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. Ten Cate's sales of €1049 million, based on 2012 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. Ten Cate's current ratio €413m/€179m of 2.3 passes 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 meet this criterion display one of the attributes of a financially secure organization. The long-term debt for Ten Cate is €280 million, while the net current assets are €234 million. Ten Cate 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. Ten Cate's EPS growth over that period of 23% fails the EPS growth 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. Ten Cate's E/P of 5% (using the current 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. Ten Cate has a Graham number of (22,5 x €1,7 EPS x 17,25 Book Value) = €26

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