SECTOR: [PASS] Boskalis 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. Boskalis' sales of €3 249 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. Boskalis's current ratio €2 026m/€1 867m of 1.1 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 Boskalis is €985 million, while the net current assets are €159 million. Boskalis fails this test.
SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. Boskalis' sales of €3 249 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. Boskalis's current ratio €2 026m/€1 867m of 1.1 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 Boskalis is €985 million, while the net current assets are €159 million. Boskalis 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. Boskalis's earnings have increased 160% over the past ten years.
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. Boskalis'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. Boskalis has a Graham number of √(15 x €3,1 EPS x 1,5 x €29,9 Book Value) = €46
Dividend: €1,6/€30 = 5%
Conclusion: Boskalis seems inexpensive at the moment. You can buy a Euro of Graham Value for 66 cents. Profits will be lower this year, but the price to book of 1 is very appealing. Debt is a bit too high for the defensive investor.
See: www.beterinbeleggen.nl for more in depth, qualitative analysis of "good" companies.
Previous chart based on 2011 numbers:
Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com
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