AMG went public in 2007 for 24 Euros and the price went up to 29 Euros on the first day and increased to 50 Euros within a year, allowing its biggest shareholder to sell at attractive prices: http://www.telegraaf.nl/dft/bedrijven/amg/20543290/__Grootaandeelhouder_AMG_verkoopt_miljoenen_aandelen__.html
Currently the company is firing on all cylinders, so in hindsight last year's share price was not as expensive as I thought.
Graham Defensive Analysis
SECTOR: [PASS] AMG 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. AMG's sales of €965 million, based on 2016 sales, pass this test.
CURRENT RATIO: [PASS] The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. AMG's current ratio €530m/€259m of 2.0 almost passes 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 meet this criterion display one of the attributes of a financially secure organization. The long-term debt for AMG is €312 million, while the net current assets are €271 million. AMG 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. AMG's EPS were negative in 2013, AMG 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. AMG's E/P of 5% (using the average of last 3 years) 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. AMG has a Graham number of √(15 x €1,6 EPS x 1,5 x €7 Book Value) = €16
Dividend: €0,27/25 = 1 %
Conclusion: AMG is not a stock for the Defensive Investor, but the intrinsic value has been increasing.
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