Monday, April 13, 2099

Valuation of all stocks listed in Holland AEX All Share AAX: Benjamin Graham Defensive Investor method

Warren Buffett: "Well, start with the A’s." Click on the companies below for Graham Evaluation:

Aalberts Industries AEX:AALB, NL0000852564
ABN AMRO AEX:ABN48 NL0011540547
Accell Group AEX:ACCEL NL0009767532
Ahold Koninklijke AEX:AH, NL0010672325
Accsys Technologies AEX:AXS, GB00BQQFX454: Too small, making a loss, but growing sales.
Aegon AEX:AGN, NL0000303709
AFC AJAX AEX:AJAX NL0000018034
Air France-KLM PSE:AF, FR0000031122
Akzo Nobel AEX:AKZA NL0000009132Randstad AEX:RAND NL0000379121
Altice AEX:ATC, NL0011333752
AMG Advanced Metallurgical Group NV AMG:AEX NL0000888691
Amsterdam Commodities AEX:ACOMO NL0000313286
AND International Publishers
Apollo Alternative Assets AEX:AAA1, GB00B15Y0C52
Aperam AEX:APAM LU0569974404
Arcadis AEX:ARCAD, NL0006237562
ArcelorMittal AEX:MT, LU0323134006
ASM International AEX:ASM NL0000334118 BUY under €35
ASML Holding NV
Batenburg Techniek HAL Trust AEX:HAL, BMG455841020
BAM Koninklijke Groep 
Basic Fit ?! don't buy above 7,50
BE Semiconductor Industries AEX:BESI, NL0000339760
Beter Bed Holding AEX:BBED, NL0000339703
Bever Holding: Small real estate fund, bleeder, selling under 5 Euro book value.
Boskalis Westminster Koninklijke AEX:BOKA, NL0000852580
Boussard & Gavaudan Holding Ltd. An expensive hedge fund.
Brill, Koninklijke kopen onder 20 Euro
Brunel International AEX: BRNL, NL0010776944
Corbion AEX:CRBN, NL0010583399
Core Laboratories AEX:CLB, NL0000200384
Ctac buy under €2,50
Curetis loss making biotech company = too difficult pile
Docdata: Cocoondd telt 0,35 euro in contanten neer per aandeel.
Delta Lloyd numbers expected August 17th 2016 with 220 million new shares.
DPA Groep N.V. buy at €1,1
DSM Koninklijke don't buy over 40 Euros
Esperite: Stem Cell Bank losing money hand over fist.
Eurocastle NPL Non Performing Loans in Italy... Results August 3rd
Eurocommercial Properties: Buy at €35
Euronext buy at €30
Fagron EPS -6,3 and negative Book Value per share -€2, not for the defensive investor...
ForFarmers a Graham Defensive Pick up to €6,50
Flow Traders outside my circle of competence, seems like a buy under €30
Fugro's Graham Value has decreased, buy at €10?
Gemalto buy under €45
Galapagos is a clinical-stage biotechnology company, not profitable (yet?).
GrandVision : Don't buy over €20
Groothandelsgebouwen N.V. buy under €40
HAL Trust: check November 17th 2016
Heijmans losing money
Heineken, buy under 60?
Holland Colours buy now under €61
Hunter Douglas, good balance sheet, buy if under €41
Hydratec buy now, sell at €60
ICT Group NV buy under 7 Euros
IEX Group Sales 2m, losses 600k, not for the defensive investor
IMCD buy under 20 Euros
ING Bank buy around 10 Euros
Intertrust too little history: Earnings per share 2016 Euro 1,3 x 15 = 19,5 Euros: Price = 19,86 Euros
Inverko used to be Newconomy, is for sale, garbage (disposal) Price = 0,60 Euros
Kardan made a loss 4 out of the last 5 years including H1 2016
KAS Bank cheap now under 10 Euros ?
Kendrion buy at 20 Euros
Kiadis Pharma bleeder, not for Defensive Investor, no sales
Klepierre French Retail Real Estate 5% dividend
KPN not for the Graham Defensive Investor
Porceleyne Fles Koninklijke Check under 5 Euros.
K. VOPAK buy under 30
K. Wessanen 
Lavide not  a going concern (yet?) 
Lucas Bols buy under €15
Nedsense lege beurshuls
New Sources Energy penny stock
Neways electronic manufacturing services (EMS)
NN Group NV buy now under €40?
Novisource verliesgevend interim management 
NSI Nieuwe Steen Investments per February 14th
Value8 AEX:VALUE NL0010661864
Nedap NV Nederlandsche Apparatenfabriek
OCI NV buy under 16 Euros
Oranjewoud not a Defensive stock...
Pharming Biotech loss maker, issuing stock  72.977k...213.008k...407.687k...407.687k
Philips Electronics buy around 20?
Philips Lighting
PostNL
Probiodrug loss making biotech, not a stock for the Defensive Investor
Randstad
Refresco Group  buy around 12 Euros?
RELX Group (formerly Reed Elsevier)

Unilever after Kraft Heinz bid

Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com

Friday, March 24, 2017

RELX Benjamin Graham valuation

    RELX was formerly known as Reed Elsevier.


SECTOR: [PASS]  RELX Group 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. RELX Group's sales of €8,412 million, based on 2016 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. RELX Group's current ratio €2 753m/€6 623m of 0.4 fails 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 RELX Group is €6 206 million, while the net current assets are - €3 870 million. RELX Group 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. RELX Group's profits have been flat over the past 10 years and fails this test.

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. RELX Group's E/P of 5% (using the last 3 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. RELX Group has a Graham number of (15 x €0,7 EPS x €1,27 Book Value) = €4,4 

Dividend: €0,42/€14,3 = 2,4%

Conclusion: The RELX Group earns a lot on its book value (it has a high return on equity), but it is not a stock for the Defensive investor, especially at the current price of over 17 Euro

See: www.beterinbeleggen.nl for more in depth, qualitative analysis in Dutch.

Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com

Thursday, March 23, 2017

Refresco Group intrinsic value Benjamin Graham Valuation

Refresco is a bottler that used to be called Menken Drinks in the Netherlands. They have bought up companies in Europe and recently in the USA. The company went public in 2015.


In 2012 and 2013 the company made a operating profit, but net loss because of high interest payments on its debt financing. I don't know the details of how this came about. Following 2013, the company did have a net profit per share of 0,50 in 2014 and 2015 which doubled to 1 Euro per share in 2016, this together with an increase in book value per share this explains the sharply increasing Graham Number over the past few years.

SECTOR: [PASS]  Refresco Group 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. Refresco Group's sales of €2,107 million, based on 2016 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. Refresco Group's current ratio €771m/€588m of 1.3 fails 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 Refresco Group is €761 million, while the net current assets are €183 million. Refresco Group 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. Refresco Group made a net loss in 2012 and 2013 (due to higher interest expenses before the IPO) and fails this test.

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. Refresco Group's E/P of 6% (using the last 3 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. Refresco Group has a Graham number of (15 x €0,9 EPS x €6,7 Book Value) = €11,9 

Dividend: €0,4/€14,3 = 2,8%

Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com

See: www.beterinbeleggen.nl for more in depth, qualitative analysis in Dutch.

Tuesday, March 21, 2017

Randstad: Profiting from Mr. Market's mood swings

Almost a year ago I did a Graham analysis of Randstad:  http://sinaas.blogspot.nl/2016/04/randstad.html The price was around 45 Euros and the Graham value 32,60 Euros.



I wrote at that point in 2016: 

"Conclusion: Business is going well at Randstad. If the stock price comes down a bit, it could be a good deal."

After that the price dipped to 32,58 and it was a good deal. Now the price is back up to 57,51 Euros.  This is the "Price is what you pay, Value is what you get." graph today: The stock price goes up and down much more quickly than the value (which is slowly increasing over the long term through economic cycles). 


This is the current analysis using the criteria from Chapter 14 Defensive Investing from "The Intelligent Investor":

SECTOR: [PASS]  Randstad 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. Randstad's sales of €20,684 million, based on 2016 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. Randstad's current ratio €4,632m/€3,969m of 1.2 fails 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 Randstad is €873 million, while the net current assets are €663 million. Randstad 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. Randstad's EPS growth was 0% over the past 10 years, Randstad fails this test.

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. Randstad's E/P of 6% (using the last 3 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. Randstad has a Graham number of (15 x €2,8 EPS x €22,66 Book Value) = €38,1 

Dividend: €1,9/€57 = 3,3%

See: www.beterinbeleggen.nl for more in depth, qualitative analysis in Dutch.

Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com

Tuesday, March 14, 2017

Time weighted versus Money weighted return

Many experienced fund managers have told us it is impossible to coach your investors (partners, participants) to make Intelligent decisions about when to invest more or when to take money out of the fund.

In industry jargon the "time weighted return" of a fund is usually higher than the "money weighted return". We would like to attempt the impossible, run a fund where the money weighted return is higher than the time weighted return.

To illustrate, let's consider a simple fund where the price of share dips 50% in the first year because of an unjustified panic in the markets. In the second year the price of shares increases to 21% higher than the launch date of the fund:


$10 million start, no money taken out or put in. Time weighted return is money weighted return. The returns for the investors are on average 10% per year, 21% after 2 years.


$10 million start, almost $10 million taken out after 1 year. Time weighted return is 10% per year, 21% after 2 years. Money weighted return is minus 50% after 1 year and after 2 years.

The fund manager has picked the exact same stocks, but has failed to make it clear to investors that the end of Year 1 was not a good time to sell. In fact Warren Buffett says that a good time to buy stocks is after a dip: "Be greedy when others are fearful."


Almost no money at start, $10 million invested after 1 year. Time weighted return is 10% per year, 21% after 2 years. Money weighted return is 55% per year and 242% after 2 years.

One of the most famous value investors in history, Sir John Templeton, founder of Fidelity always coached his customers to help them outperform the indexes and even his own funds. See: http://sinaas.blogspot.nl/2016/12/templetons-way-with-money-re-balancing.html

Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com

Monday, March 13, 2017

Unilever intrinsic value, priced to perfection ?



SECTOR: [PASS] Unilever 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. Unilever's sales of €52 713 million, based on 2016 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. Unilever's current ratio €13 884m/€20 166 of 0.7 fails 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 Unilever is €17 860 million, while the net current assets are - €6 282 million. Unilever 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. EPS for Unilever only increased 11% over the past 10 years, therefore the company fails this criterion. 

P/E RATIO: [FAIL] The Price/Earnings (P/E) ratio, based on the greater of the current PE or the PE using average earnings over the last 3 fiscal years, must be "moderate", which this methodology states is not greater than 15. Stocks with moderate P/Es are more defensive by nature. Unilever's P/E of 23 (using the current PE) fails this test. 

PRICE/BOOK RATIO: [FAIL]  The Price/Book ratio must also be reasonable. That is the Graham number value must be greater than the market price. Unilever has a book value of €6, a Graham Number of €15 and fails this test.

Dividend: 1,30/45,77 = 2,8%

The Price for Unilever has gone up more than I expected a few years ago. A bid from Kraft Heinz (Buffett / 3G) has helped increase the "quoted value". Not a stock for the Defensive Investor at this price. 

Diagram from 2013:


Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com

Monday, March 06, 2017

PostNL intrinsic value : Show me the money? Benjamin Graham valuation


I don't understand PostNL, they say they are profitable, but there is no book value. Long term debt has fallen, but short term debt is up. They haven't paid dividend for a long time and now paid out 12 cents. They plan to pay out 75% of profits, but... https://www.postnl.nl/en/about-postnl/investors/financial-framework-and-outlook/dividend/   There was a little spike in the price because the Belgian Post wants to buy PostNL.

SECTOR: [PASS] PostNL 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. PostNL's sales of €3 423 million, based on 2016 sales, pass this test.
BUT NOTE THAT SALES ARE DECREASING.

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. PostNL's current ratio €1 173m/€1 257 of 0.9 fails 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 PostNL is €227 million, while the net current assets are - €84 million. PostNL 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. EPS for PostNL were negative within the last 5 years and Earnings per Share have decreased over the last 10 years, therefore the company fails this criterion. 

P/E RATIO: [PASS] The Price/Earnings (P/E) ratio, based on the greater of the current PE or the PE using average earnings over the last 3 fiscal years, must be "moderate", which this methodology states is not greater than 15. Stocks with moderate P/Es are more defensive by nature. PostNL's P/E of 6,7 (using the current PE) fails this test. >>What I don't understand is where the money is going.<<

PRICE/BOOK RATIO: [FAIL]  The Price/Book ratio must also be reasonable. That is the Graham number value must be greater than the market price. PostNL has a book value of €0 and fails this test.

Dividend hasn't been paid for years. 2016 dividend: 0,12/4,19 = 3%

Diagram from 2013:

You could have bought at 2 Euros and sold at 4 and doubled your money. You can also double your money at roulette by betting on black. In fact you can win 90% of the time at roulette using the martingale system. It is true, but there is a catch ;)

Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com

Sunday, March 05, 2017

Philips Lighting intrinsic value ? Buy under 20 Euros

Philips Lighting is a recent spin-off from Philips selling old fashioned incandescent lights ("last man standing") and modern LEDs.

SECTOR: [PASS] Philips Lighting 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. Philips Lighting's sales of €7 115 million, based on 2016 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. Philips Lighting's current ratio €3 660m/€2 113 of 1.7 almost passes this 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 Philips Lighting is €1 409 million, while the net current assets are €1 547 million. Philips Lighting passes this test.

LONG-TERM EPS GROWTH: [FAIL] [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. Philips Lighting as an independent company has insufficient history for this criterion. 

Earnings Yield: [FAIL]  The inverse of the Price/Earnings (P/E) ratio, based on the greater of the current PE or the PE using average earnings over the last 3 fiscal years, must be sufficiently high, which this methodology states is greater than 6,5%. Stocks with high Earning Yields are more defensive by nature. Philips Lighting's Earnings Yield of 5% (using the current Earnings and Share Price) fails this test.

GRAHAM NUMBER: [FAIL]  The Graham number value must be greater than the market price. Phlilps Lighting has a Graham Number of  Square Root ( 1,5 x €18 Book Value x 15 x 1,26 Earnings per Share) = € 22,6 and fails this test since the price has increased after the IPO.

See www.beterinbeleggen.nl for analysis of quality companies.

Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com

Thursday, March 02, 2017

Koninklijke Philips intrinsic value Ben Graham valuation





SECTOR: [PASS] Philips 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. Philips' sales of €24,300 million, based on 2012 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. Philips' current ratio €14,075m/€9,793 of 1.4 fails 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 Philips is €5,400 million, while the net current assets are €4,282 million. Philips 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. EPS for Philips were negative within the last 5 years (2008, 2011) and therefore the company fails this criterion. 

P/E RATIO: [FAIL]  The Price/Earnings (P/E) ratio, based on the greater of the current PE or the PE using average earnings over the last 3 fiscal years, must be "moderate", which this methodology states is not greater than 15. Stocks with moderate P/Es are more defensive by nature. Philips' P/E of 19 (using the current PE) fails this test.

PRICE/BOOK RATIO: [FAIL]  The Price/Book ratio must also be reasonable. That is the Graham number value must be greater than the market price. Phlilps has a book value of €13,57 and fails this test.

Diagram from 2013:



Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com