Lucas Bols was hit hard by the lockdowns and other Corona mandates. Sales went down and the company made a loss in 2020 (their 2021 year). Now sales are back up as well as profits, but the share price is still low.
There were 12,5 million shares outstanding and the company just issued 2,5 million more at the end of 2021 @EUR 11,58 per share. 12% more than the current share price. The money is being used for acquisition of Tequila Partida. This share sale and acquisition is not included in the very basic Benjamin Graham analysis below.
SECTOR: [PASS] Lucas Bols is neither a technology nor 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. Lucas Bols' sales of €90 million, based on 2022 estimated sales, fails 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. Lucas Bols' current ratio €45m/€21m of 2.1 passes 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 Lucas Bols is €150 million, while the net
LONG-TERM EPS GROWTH: [PASS] [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. Lucas Bols' EPS growth over that period is a number we don't have because the IPO was in 2015. The company booked a loss in the COVID19 lockdown year.
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. Lucas Bols' E/P of 11% (using this year's estimated earnings of EUR 1,2 per share) passes this test.
DIVIDEND ? €0/€10.3 = 0% In the past years the company paid a dividend of about 50 cents = 5%.
Conclusion: Lucas Bols seems fairly priced just above €10,- There is a margin of safety at the moment.
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