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 2020
ABN AMRO 2020 
Accell Group 2020 
Ahold Delhaize Koninklijke 2020
Accsys Technologies 2020
Adyen 2020
Aedifica 2020
Aegon 2020
AFC AJAX 2020
Air France-KLM 2020 
Akzo Nobel 2020 
Alfen 2020
Alumexx 2020 (voorheen Phelix, Inverko, Newconomy)
AMG Advanced Metallurgical Group NV 2019
Amsterdam Commodities ACOMO 2019
AND International Publishers 2019
Apollo Alternative Assets 2019 
Aperam 2019
Arcadis 2019
ArcelorMittal 2019 
ASM International 2019
ASML 2020
ASR Nederland 2019
Avantium 2019
BAM Koninklijke Groep 2019
Basic Fit 2019
BE Semiconductor AEX:BESI 2019
Beter Bed Holding 2019
B&S Group 2019 August 23, 2021 HY 2021 results

Berkshire Hathway 2019 run by Warren Buffett

Bever Holding 2019
Boskalis Westminster Koninklijke 2019
Boussard & Gavaudan Holding Ltd. An expensive hedge fund.
Brill, Koninklijke 2019
Brunel 2019
Coca-Cola European Partners 2019
Corbion 2019
Core Laboratories 2019
Ctac 2019
CTP vastgoed Remon Vos
Curetis 2019
DGB Group 2019 check May 2020 
DPA Groep N.V. 2020
DSM Koninklijke 2019
Dutch Star One 2019
Ease2pay 2019
Envipco 2019
Eurocastle 2019
Eurocommercial Properties 2019
Euronext 2020
Fagron 2019
Fastned 2019
Flow Traders 2019 
FNG 2019
ForFarmers 2019
Fugro 2020
Galapagos 2019
GrandVision 2019 EUR 28 offer
HAL Trust 2019 buy at EUR 143
Heijmans 2019
Heineken 2019
Holland Colours 2019 buy under €100
Hunter Douglas 2020
Hydratec 2019
ICT Group NV 2019
IEX Group 2019 still losing money, not for the defensive investor
IMCD 2019
ING Bank 2019
Intertrust 2019
Kendrion 2019
Kiadis Pharma 2019
Klepierre cheap at €20? 2019
KPN 2019
K. Porceleyne Fles Koninklijke 2019
K. VOPAK 2019
K. Wessanen 2019 buy out?
K. VolkerWessels 2019
Lavide Holding 2019 
Lucas Bols 2019
Marel 2019
Nedap 2019
MKB Nedsense 2019
Morefield Group 2019 (voorheen Headfirst)
New Sources Energy 2020
Neways 2019
NIBC 2019
Altice 2020 end of December 2020
Batenburg Techniek: Taken off the stock exchange for 46 Euros by van Puijenbroek family. Good price for investors:  http://sinaas.blogspot.com/2018/08/batenburg-techniek-graham-valuation.html
BinckBank 2019 Saxobank
Esperite: 2018 Stem Cell Bank losing money, selling shares. Price recently fell from 3 to 0,25
oktober 2019 falliet, koers: 0,046 geen handel.
Gemalto Thales offer 2018
Groothandelsgebouwen N.V. bought for EUR 56,92

Thoughts on share prices: Peter Lynch and Nick Kraakman https://www.valuespreadsheet.com/blog/dangerous-sayings-about-stock-prices

Tuesday, September 21, 2021

Friday, September 10, 2021

Coronavirus gives politicians a taste of absolute power without contradiction

It is shocking how quickly coercion and control have become part of the democratic world. Apparently absolute power, without participation or contradiction, is difficult to resist.

Gerhard Hormann


During the height of the credit crisis, I was driving to the south of Sweden with a photographer. At the time, I was still working as a paid journalist and that week I had the opportunity to test a convertible version of the Saab 9.3. That car brand was then about to fall and there were rumors that it would be taken over by a Chinese company.

That's how we came up with the idea to photograph this car in its own habitat and at the same time interview a few local Saab dealers. It was a nice idea that worked out well, but at the same time it was pointless, wasteful car miles because we could have shot this new model in front of a Swedish restaurant in our own country or in a residential area with Scandinavian-looking wooden houses.

During that long drive, we had plenty of time to philosophize about fossil fuels and global warming. Then, more than ten years ago, we concluded that the necessary behavioral change could only be achieved by sacrificing democratic achievements such as freedom of movement and privacy. You could also say that we already realized then that effective climate policy would automatically lead to a kind of green semi-dictatorship.

That wasn't a value judgement, just a simple observation. Partly for this reason, we concluded that such a radical policy would not be feasible, because in a parliamentary democracy no one would accept such a curtailment of civil rights and freedoms. You can suggest giving every citizen a kind of CO2 quota, but implementation requires a fine-grained monitoring device that registers and analyzes every purchase and every kilometer driven.

What seemed an impossibility during that trip to Sweden has now become an almost everyday reality in some places. If the pandemic has shown anything, it is how surprisingly easy it is to transform a parliamentary democracy into a repressive control society that intervenes in individual choices and freedoms.

History has yet to show whether the government measures taken to combat the coronavirus were wise or exaggerated. Only with retrospective effect can we determine whether the remedy was perhaps worse than the disease, precisely because it affects so many aspects of social life. But already you can see how tempting and intoxicating power can be for reasonably reasonable, democratically elected politicians and how quickly consensus is exchanged for control and state coercion. What is happening now in countries like Australia and Canada, but also closer in France, Austria and Greece, I would not have thought possible until recently. This can be a temporary emergency, but also a testing ground for politicians who have had a taste of power without participation or contradiction.

The author is a publicist. For previous columns see rd.nl/hormann. Respond? hormann@refdag.nl

Tuesday, September 07, 2021

ASML priced to perfection?

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.


The problem with this chart is that it is lineair, whilst life is exponential (hopefully). Peter Lynch used a log chart which reflects growth better.


In this case there is a global chip shortage at the moment and business is booming better than ever at ASML, but I see a bubble in the log chart as well, similar to 2000. If you had invested then you as a shareholder wouldn't have earned much for a decade although profit and sales increased dramatically. 


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 €14 000 million, based on 2020 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 €27 3000m/6 603m of 4.1 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 meet this criterion display one of the attributes of a financially secure organization. The long-term debt for ASML is €7 000 million, while the net current assets are €21 000 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 by over 250% 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 must be greater than 6,5%. Stocks with higher earnings yields are more defensive by nature. ASML's E/P of 1,5% 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 €7,3 EPS x €30 Book Value) = €70

DIVIDEND 2,,75/734 = 0,4%

KISS investing The Stupid Test David Perell with Peter Thiel


Monday, September 06, 2021

Alumexx 2020 notes

Alumexx
Omzet EUR 4 miljoen
Vl. Activa 1,4m
K. Schuld 1m
L. Schuld 0,1m

Winst per aandeel EUR 0,02
Boek per aandeel:  EUR 1 gedeeld 11m aandelen is EUR 0,1

Graham Number value = EUR 0,2

Koers EUR 0,4 - > EUR 1,7 -> EUR 1 nu. 

https://sinaas.blogspot.com/2019/11/alumexx-intrinsic-value-2019.html

Altice no longer listed



Earlier notes: 


Monday, August 26, 2019

Altice: a puzzle

In November 2017 I wrote: "Conclusion: ALTICE is very difficult to evaluate. The company’s financials have changed drastically in the past years due to deal making. Sales have increased dramatically and could result in fantastic earnings for shareholders going forward, but it is not a company for the Defensive Investor. ALTICE might be cheap at a price of under 10 Euros per share, but belongs in what CharlieMunger calls the “too hard pile.

http://sinaas.blogspot.com/2017/11/altice-price-rollercoaster-no-intrinsic.html

Since then Altice spun-off Atice USA. If I understand correctly, Altice shareholders got 0,41 Altice USA shares per share of Altice International held. The current Altice USA (ATUS) shareprice is $27,83 x 0,41 in Euros = EUR 10,26 + Altice Europe EUR 3,90 today = EUR 14 almost a 100% increase in >Quoted Value< since 2017.

Since 2017 I have read "Cable Cowboy" about John Malone. It makes it clear that a Benjamin Graham Defensive method of evaluating a cable company (based on Earnings and Book Value per share) is not helpful.

Still too difficult for me, especially at a time of technological disruption in broad- and narrowcasting (streaming) at this moment.


Friday, September 03, 2021

$SPGI Peter Lynch lineair chart

Same chart in log scale, the way Peter Lynch drew his fundamental charts (not related to technical analysis).



Wednesday, September 01, 2021

Alfen Benjamin Graham Defensive notes


The business is doing very well. The stock even better. The graph above is in a linear scale, next year I will add a log scale. They have an international runway for growth. 
Using figures for 2021. Sales EUR 250m Balance sheet solid. Shares outstanding increased to 22m. Not a bad idea to issue shares at this price. Price per share EUR 93, book value EUR 4,-. EPS 1 per share and increasing. P/E 100 

Alfen notes september 2019: Not for the Graham Defensive Investor

Mkt cap264,80M
P/E ratio410,67


Sales 2019 EUR 140m ? 

EPS = EUR 0,2
Book = EUR 8,3m equity / 20m shares = EUR 0,41 per share

Question: Why did I think there were 11,3m shares outstanding last year??

Price ...... wait for it

= EUR 13,24 

Earnings have to increase 500% for this to make sense... 


On the other hand the market for Smart grid solutions and Electric Vehicle (EV) is expected to remain strong.
--------------------


Tuesday, December 18, 2018


Alfen rough intrinsic value using Graham Number notes

New IPO at EUR 10 per share. Currently, 11,3m shares, share price EUR 12,25 per share. Market Cap: EUR 138m
The company is buying Finnish Elkamo for EUR 4,5m

Book value: Equity EUR 7,1m/11,3m shares = 0,6 EUR Book value per share

Adjusted Earnings Guess for 2018: 0,2 EUR per share. Graham Number (Geometric average of 15x Earnings and 1,5 x Book value = Graham Value EUR 1,68 per share.

The company is growing revenues quickly (plus 32% in the first half of 2018), but seems expensive at the current stock price. The company would have to keep growing at this pace for 3-4 years to justify the current share price.  The EV market could grow that quickly, but I don't know how much competition there is.

Current ratio: 30,4m/24,8m = 1,2
Long term debt: 8,6m (including Elkamo?)

Conclusion: Not a stock for the Defensive investor.

Thursday, August 19, 2021

AkzoNobel Graham Defensive analysis


SECTOR: [PASS] AKZO is neither a technology nor a 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. AKZO's sales of €8 530 million, based on 2020 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. AKZO's current ratio €5,064m/€3,093m of 1.6 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 AKZO is €4,134 million, while the net current assets are €1,971 million. AKZO 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. EPS for AKZO haven't really increased.

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. AKZO's earnings yield of 3% (using the 3 year average 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. AKZO has a Graham number of (15 x €3,2 EPS x 1,5 x €28 Book Value) = €45 and fails this test.

DIVIDEND 1.95 EUR/EUR 102 = 2%

Wednesday, August 18, 2021

DPA Gilde offer rough math with Benjamin Graham defensive number

The offer of EUR 1,70 is close to EUR 1,80 which is the Graham Defensive value I guesstimate.


SECTOR: [PASS]  DPA  is a HR service company.  The labor laws changed in 2017, which was a negative, but the current economic situation after the Coronadip is a positive. 


SALES: [FAIL] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. DPA's sales of €135 million, based on 20202 sales, fails this test. Sale were increasing.

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. DPA's current ratio €21m/€8,7m of 2,4 is o.k..

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 DPA is €7,3 million, while the net current assets are -€12 million. DPA 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. DPA's earnings were negative between 2006 and 2011 and had increased by over 100% since 2013, not including 2020.

Earnings Yield: [PASS] [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. DPA's E/P of 11% (using 2019 Earnings) passes this test. Last years earnings yield of 2% fails the 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. DPA has a Graham number of (15 x €0,1 EPS x 1,5 x €1,4 Book Value) = €1,8

Dividend: No dividend at the moment.

Conclusion: It seems like Gilde got a good price. 

Tuesday, August 17, 2021

Air France-KLM: not a Benjamin Graham Defensive stock


Due to Coronavirus measures, Air France-KLM sales dropped from EUR 27 billion to EUR 11 billion in 2020 and losses have resulted in a negative book value (the company has more debt than assets). 

SECTOR: [PASS] AF 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. AF's sales of €11 100 million, based on 2020 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. AF's current ratio of €9 895m/€11 778m of 0.8 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 AF has increased to €24 000 million, while the net current assets are €-1 883 million. AF 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. EPS for AF were negative in many of the past years and therefore the company fails this criterion.

E/P RATIO: 
 [FAIL]  The Price/Earnings (P/E) ratio, based on the greater of the current PE or the PE using average earnings over the last 3 fiscal years, must be "moderate", which this methodology states is not greater than 15. Stocks with moderate P/Es are more defensive by nature. AF's Earnings Yield is 0% this year and profit is uncertain this year or next.

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 and is at 0,24 whilst the price is 3,95 Euros. 

NO DIVIDEND 

Sunday, July 04, 2021

Panic and herd behaviour (institutional imperative) in Covid Response paper by Sajid Javid


COVID conditions predict worse decision-making. The decision-making literature shows that if we take stress and uncertainty as proxies for on-the-moment or crisis decisions, indeed decision making worsen. Stress leads to lower performance for risk avoidance, strategy, and higher-level cognitive system use, and tends to use more of System 1 (automatic), focus on short-term rewards, and unhealthy behaviors. In short, behavior becomes more automatic and less strategic, the opposite of what is actually needed at that time. 

● Better preparation for HILPs include greater respect and fear for uncertainty and non-linear risks, the building political institutions better able to cope with mounting, random events, in particular thought “circuit breakers, fail-safe protocols, and backup systems,” to protect from catastrophic losses like with COVID. And ideal crisis management style is (i) nimble: Move quickly in exponential growing problems, (ii) adaptive, i.e., regularly updating priors and action based on new information, (iii) wise: incorporate best scientific knowledge, (iv) humble: embracing uncertainty, (v) long-term: not just based on the political cycle, and (vi) effective communication. 

● COVID’s conditions favour “herd behavior” among policy makers, but it is hard to prove. Herd Behavior, sometimes known as “information cascades”, is defined as “everyone doing what everyone else is doing, even when their private information suggests doing something quite different” (Banerjee, 1992). This type of behavior is empirically common (from investor behavior in the stock market to new technology adoption) and can be beneficial or sub-optimal in models depending on context and information availability. Now, many factors that took place during COVID provided heightened conditions for herd behavior, such as empirical evidence that crisis, fear, volatility and uncertainty all increase the likelihood of herd behavior, or the interaction between global leaders’ identity grouping and decision making, as the fact that other types of herd behavior were observed in most populations (e.g., hoarding of toilet paper) and the market (massive volatility). If indeed herd-behavior took place, it would be important to consider how this behavior can negatively impact equilibria: for example, giving “first movers” out-sized influence in a final equilibrium (anchoring). However, proving herding necessitates availability of private information, i.e., some leader who took action against his/her own best judgment, which is hard to do. 

---------------------------------------------------------------

Warren Buffett calls slow herd behaviour the "institutional imperative"

Wednesday, June 23, 2021

Buffett has given away half of his Berkshire Hathaway shares and his wealth has increased by 2,3 times at the same time.

Warren Buffett wrote today June 23rd 2021: 

"Today is a milestone for me. In 2006, I pledged to distribute all of my Berkshire Hathaway shares – more than 99% of my net worth – to philanthropy. With today’s $4.1 billion distribution, I’m halfway there. In June of 2006, I owned 474,998 “A” shares. Now, I own 238,624 shares. All remain destined for philanthropy."

In June 2006 the price of an A share was $91 000 per share. With 474 998 shares Buffett owned $43,2 billion in shares (mark-to-market).

Today the price of an A share is: $415 339 per share. With 238 624 shares left Buffett now owns $99,1 billion. 

If he had not sold his mark-to-market value would have been: $197b making him the richest man in the world. 

A smiling Buffett in 2006 when he, Bill and Melinda Gates set up the Giving Pledge. His letter: 




 

Thursday, June 17, 2021

Ajax Amsterdam Benjamin Graham analysis

Here a simple Graham analysis:

SECTOR: [PASS]  AJAX is neither a technology nor a 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 €162 million, based on 2020 sales, 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. AJAX's current ratio €114m/€86m of 1.3 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 AJAX is €193 million (an increase), while the net current assets are €28 million. AJAX 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. 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 7,5% (using last 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 €1,6 EPS x 1,5 x €12,5 Book Value) = €21 

Dividend 2020 0 cents = 0,0% 


Update 17 februari 2021 : Ajax heeft in de 1-e helft van het boekjaar (seizoen) 2020 - 2021 de inkomsten en winst zien dalen. De omzet daalde  - als gevolg van de coronacrisis - met 29 % tot  79 miljoen euro. Mede door  57 miljoen euro aan transfergelden bedroeg het nettoresultaat 38 miljoen euro positief (vorig seizoen 53 miljoen euro). De operationele winst * (exclusief transfergelden) bedroeg 1,3 miljoen euro negatief.
 
* dividendinfo.nl : Ajax keert jaarlijks 25 tot 35% van de operationele winst (exclusief transfergelden) als een cash dividend uit. (zie onderstaand dividendbeleid)