Conclusion In March 2019 was: The stock doesn't seem cheap. Not for the Graham Defensive investor.
Benjamin Graham Defensive Analysis:
SECTOR: [FAIL] Corbion is a bio-technology company? and therefore Benjamin Graham would consider it too risky.
SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. Corbion's sales of €1 070 million, based on 2021 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. Corbion's current ratio €504m/€321m of 1,6 is almost good enough.
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 Corbion is €466 million, while the net current assets are €183 million. Corbion fails this test.
SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. Corbion's sales of €1 070 million, based on 2021 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. Corbion's current ratio €504m/€321m of 1,6 is almost good enough.
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 Corbion is €466 million, while the net current assets are €183 million. Corbion 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. Corbion's earnings have not increased much over the past ten years.
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. Corbion's E/P of 4% (using last years 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. Corbion has a Graham number of √(15 x €1,3 EPS x 1,5 x €9,4 Book Value) = €16
Dividend: €0,56/€31 = 2%
Conclusion March 2019 and March 2022: The stock doesn't seem cheap. Not for the Graham Defensive investor.
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. Corbion's earnings have not increased much over the past ten years.
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. Corbion's E/P of 4% (using last years 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. Corbion has a Graham number of √(15 x €1,3 EPS x 1,5 x €9,4 Book Value) = €16
Dividend: €0,56/€31 = 2%
Conclusion March 2019 and March 2022: The stock doesn't seem cheap. Not for the Graham Defensive investor.
No comments:
Post a Comment