Wereldhave stock price versus Graham Defensive Value

Not including significant dividends

SECTOR: [PASS]  Wereldhave was a store real estate company. Now it is calling itself a company that owns "Full Service Centers with mix of ‘LifeCentral’ experiences as a base for sustainable growth." Stores plus food & beverage plus health care/gyms. 

SALES: The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. Wereldhave's revenue of €160 million, based on 2022 sales, fails this test and has been declining.

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. Wereldhave's current ratio €54m/€216m of 0,3 is too low.

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 Wereldhave is €759 down from 1 200 million three years ago, while the net current assets are - €162 million. Wereldhave 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. Wereldhave's earnings haven't grown over the past 5 years, it has booked huge losses. 

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. Wereldhave's E/P of 11% (using next year's estimated direct 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. Wereldhave has a Graham number of √(15 x €1,7 "EPS" x 1 x €23 Book Value) = €24 

Dividend: €1,16/€14,7 = 7,8%  

"Abolishing the REIT regime 

The Dutch government’s plan to abolish the Dutch real estate investment trust (REIT) regime caught us by surprise. In a worstcase scenario, we estimate the decision, due to take effect from 2025, could cost us € 3-4m a year in earnings, equivalent to approximately 5%. The government has promised to put support measures in place – these, plus tax optimization, will help us mitigate the effects of this decision."