Sligro Benjamin Graham Defensive Analysis

Recently Sligro completed the sale of Emte supermarkets and gave shareholders a special EUR 7,57 dividend per share at the end of July 2018 .

Now they have bought De Kweker and are implementing SAP IT systems together with Ctac. (Which might be a risk...)

SECTOR: [PASS]  Sligro is in retail and foodservice and 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. Sligro's sales of €2 395 million, based on 2019 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. Sligro's current ratio $526m/$593m of 0.9 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 Sligro is €362 million (including EUR 174m lease obligations), while the net current assets are  - €67 million. Sligro 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. Sligro EPS grew by 0% over the past years and 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. Sligro's E/P of  5% (using the current 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. Sligro has a Graham number of √(15 x €1,2 EPS x 1,5 x €11,36 Book Value) = €17

Dividend= €1,4/€26 = 5,4%

Conclusion: Somehow in 2017 I was using a much higher book value? https://sinaas.blogspot.com/2018/11/sligro-i-made-some-mistakes.html
Stock doesn't seem extremely cheap today. Not a pick for the Graham Defensive Investor.