NN Group after losing trial: share Price is lower than Graham Value

SECTOR: [FAIL] NN is an insurance company and therefore this methodology is not applicable. 

SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. NN's sales (premiums) of €942 million, based on 2022 sales, passes this test.

CURRENT RATIO:  not applicable. 

LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS:  not applicable. 

LONG-TERM EPS GROWTH: [PASS] 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. Earnings per share have roughly doubled since 2014.

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. NN's E/P of 14% (using the average of last 3 years 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. NN has a Graham number of √(15 x €5,9 EPS x 1,0 x €74 Book Value) = roughly €100 and passes this test. 

Dividend €2,79/€35 = 8%

Market cap: EUR 10b seems to include a discount of around EUR 5b for the woekerpolis courtcase. ASR / Aegin just settled for EUR 0,25b so the discount seems high. 

NN Group is serious about stock buybacks. There were 343m shares outstanding in 2019 and 279m today. A decrease of almost 20% in 4 years. 

Conclusion: November 2023: Seems like a good price at EUR 35,-