Prosus very rough Graham Defensive analysis

SECTOR: [PASS] Prosus 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. Prosus' estimated sales of €6 000 million, based on 2022 sales, passes 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. Prosus' current ratio €15 000m/€4 800 of 3.1 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 Prosus is €9 000 million, while the net current assets are €10 000 million. Prosus passes this test. It cal also sell Tencent shares to not go bankrupt.

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. Prosus has not been listed for ten years. 

EARNINGS YIELD: [FAIL] [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. Prosus's E/P of 6,4% (using this year's estimated earnings) just 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. Prosus has a Graham number of √(15 x €3,6 EPS x 1,5 x €24 Book Value) = €42 and fails this test.

Dividend €0,14/€42 = is just 0,3% .

Net Asset Value (sum of the parts) was EUR 131,- September 30th 2021 https://www.prosus.com/news/net-asset-value/ market price (of Tencent shares) is an important determinant.