Wednesday, May 04, 2016
Value8 intrinsic value Graham Defensive Screen AEX:VALUE NL0010661864 waardering
SECTOR: [PASS] Value8 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. Value8's sales of €133 million, based on 2015 sales, fail 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. Value8's current ratio €93m/€77m 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 Value8 is €22 million, while the net current assets are €16 million. Value8 fails this test.
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. Value8's EPS growth was 31% over the past 7 years, Value8 passes this test. (Though it has existed less than 10 years.)
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. Value8's E/P of 8% (using the 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. Value8 has a Graham number of √(15 x €0,7 EPS x 1,5 x €7,06 Book Value) = €10,6
Dividend: €0,15/€8,9 = 1,6%
Conclusion: Value8 has increased in value over the past years, but debt has increased especially in 2015.
It is not a stock for the Defensive Investor, but seems to be cheap at €8,9.
The price has recently gone down because of 1 article based on the public Annual Reports of the past years saying Value8's accountant (Mazars) is misleading investors. See https://www.ftm.nl/artikelen/verborgen-verliezen-van-peter-paul-de-vries
See: www.beterinbeleggen.nl for more in depth, qualitative analysis of "good" companies.
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