Thursday, February 23, 2017

OCI Graham Intrinsic Value is 16 Euros, price was 11,2 is now 19,40 Euros.


The OCI N.V. that is currently listed on the Euronext Amsterdam is a global producer of nitrogen fertilizers, methanol and other natural gas based chemical products. The company used to do more, but had a recent demerger.
"THE DEMERGER

On 16 February 2015, OCI N.V. announced that it formally commenced proceedings to effect a demerger of the company’s engineering and construction business from its fertilizer and chemicals business (the Demerger), which was previously announced by the Board of Directors on 6 November 2014. The Demerged entity holding the engineering and construction activities is called Orascom Construction Limited (Orascom Construction).

The Demerger was effected through a USD 1.4 billion reduction in OCI N.V.’s share capital whereby OCI N.V. shareholders received one Orascom Construction share for every two OCI N.V. shares they owned as at close of trading on 6 March 2015."

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There is not much history of the demerged company...

Earnings are 1-2 Euros per share. There is a new plant in Iowa about to produce (and increase earnings?) . Book value is about 6 Euros per share.

Graham Number = Square root (15 x 2 EPS x 1,5 x 6 Book value) = 16 Euros per share.

Share price has increased from 11,21 Euros three months to 19,40 Euros today, February 2017.

The price has swung from under to above the Graham number value.
 
Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com

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