donderdag 5 april 2018

AFLAC quack quack Benjamin Graham Intrinsic Value analysis

AFLAC is an insurer in the USA and Japan.

The last AFLAC 2 for 1 stock split was a few weeks ago on the 16th of March 2018: http://investors.aflac.com/stock-information/stock-dividend-split-history.aspx


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. AFL's P/E of 13.60 (using the 3 year PE) passes this test.

PRICE/BOOK RATIO: PASS

The Price/Book ratio must also be reasonable. That is, the Price/Book multiplied by P/E cannot be greater than 22. AFL's Price/Book ratio is 1.40, while the P/E is 13.60AFL passes the Price/Book test.

Increasing Dividend: Currently $2,08 / $44 = 5% plus 4% sharebuybacks per year.

AFLAC isn't a standard insurer. It gives people extra cash in one day when they get sick or injured. Here is there first duck commercial that explains the idea.



Later Melania Trump starred in an AFLAC commerical.


AFLAC has consistently outperformed the index:

http://investors.aflac.com/stock-information/interactive-chart.aspx

Some more explanation from the Motley Fool:

https://www.fool.com/investing/2017/06/07/6-things-you-didnt-know-about-aflac.aspx

It is still run by the original family: https://en.wikipedia.org/wiki/Aflac

Note: Why are revenues falling?
Answer: Weakening Yen

Checklist: 5 x M: Marktpotentieel, Marge, Moat, Management, Money

1. Marketpotential: Can the company grow exponentially?
FAIL: due to demographic trends in Japan and high current penetration

2. Marge: Margin and/or Return on Equity
15-20% ROE pass

3. Moat: Pass Economies of Scale and Brand

4. Management: Pass

5. Money: Is the price ok? Pass

Checklist failure: market potential for growth

 Personal note: Many Americans don't save and invest. Customers would probably be better off saving and investing their money in a cheap index fund than paying premiums to AFLAC and its shareholders. That way they would have more money for a rainy day.

Stand april 2018 inleg 2 450 Eur, Graham Waarde 4 532 Eur, korting 32%

Mr. Market vroeg minder geld voor hetzelfde aandeel in bedrijven waardoor we nu meer aandelen hebben en minder cash per persoon (nu €39,-). De aankoop beslissing hangt samen met onze "value averaging" techniek.

Het lijkt een prima moment voor nieuwe Machinisten om in te stappen.

Steinhoff blijft spannend, is zeker geen Graham Defensive aandeel.




dinsdag 20 maart 2018

Steinhoff International Balance Sheet estimate

Steinhoff stock has fallen since a report by https://viceroyresearch.org/  pointed out a system of off-balance sheet deals and other accounting irregularities. The question is: "Will shareholders lose everything or will the company survive?" 

In the Annual Report, the book value seemed to be 3,8 Euros per share, but most of that was Goodwill which will now be written off.

Currently, the share price is 27 cents, it seems that book value should be about twice that?

Update: "Vacant" value of Hemisphere €1,1b lower. Book Value per Share: €0,37 ?


donderdag 15 maart 2018

Flexsteel furniture factories Graham Defensive Analysis



-          Bedrijf: Flexsteel Stock Ticker FLXS -

Machinist:…Ansgar John maart 2018……..

Hoe verdient het bedrijf geld? Het ontwerpt, produceert en distribueert meubelen in de VS en Mexico.

Hoe heet de CEO? Karel K. Czanderna

Hoe lang is hij al in functie? Sinds 2012

AANDELEN SELECTIE VOOR DE DEFENSIEVE BELEGGER:

· Is het een hightech bedrijf of financiĆ«le instelling?  Nee PASS
· Omzet hoger dan €300miljoen? $ 470 miljoen €380 miljoen PASS
· Financiering: (Current Ratio): vlottende activa (Current Assets)…$202m…… moet twee keer zo hoog zijn als de kort vreemd vermogen (Current Liabilities) ……$39………………. Current Ratio: …5,2 PASS zeer goed…………
· Netto vlottende activa moeten hoog genoeg zijn om de lange termijn schulden te kunnen betalen: (Vlottende activa – Kort Vreemd Vermogen) – (Lange termijn schulden) = $160 PASS
· Groei van de winst over 7 jaar   ……100%………………. meer dan 20%? PASS
· Is het een Money Making Machine, dat wil zeggen, een bedrijf die de afgelopen 7 jaar elk jaar winstgevend was ? ……JA PASS…… (of in ieder geval positieve cash-flow?) …………
· Earnings Yield: winst per aandeel …$3,3…./ …$39……koers =  8,5% PASS..  %  (minstens 7%)
· Koers $39. / boekwaarde per aandeel (equity per share) $31. verhouding lager dan 1,5 PASS
· Dividend ………$0,88………. ? ………2,2…. % (bij voorkeur wel) PASS
· Aandeleninkoop (share repurchase) …
Nee………………..

Graham Number = … $47….  (Liefst hoger dan koers) PASS
Wortel uit (15 x Winst per Aandeel x 1,5 x Boekwaarde per Aandeel)

Deze criteria zijn afgeleid van Benjamin Graham's meesterwerk: 'De Intelligente Belegger’ pagina 100, Hoofdstuk 4: Algemeen Porfoliobeleid: De Defensieve Belegger 

Kansen en bedreigen: Bestaat dit bedrijf(stak) over 7 jaar?
Ja, maar een recessie zou slecht zijn voor meubelverkoop. Import uit Azie en IKEA vormen een bedreiging.


Gaat de winst waarschijnlijk stijgen of dalen? Stijgen als gevolg van lagere belastingspercentage in de VS (Tax Reform).

PC Connection Inc Benjamin Graham Defensive Screen


The Gurufocus Peter Lynch chart. Notice the price bubble around 2000. The red and blue line is 15x Earnings per Share. The price is PE (Price/Earnings) would be 15.


-          Bedrijf:…PC “Connection” Inc….Stock Ticker…CNXN…………….-


Machinist:…Ansgar John maart 2018………………………..

Hoe verdient het bedrijf geld? Leverancier van IT producten en software oplossingen aan bedrijven en overheden.

Hoe heet de CEO? Timothy McGrath werkt bij het bedrijf sinds 2005

Hoe lang is hij al in functie:       ? Oprichters zijn nog deel van Raad van Commissarissen (Board of Directors: Mr. David Hall co-founded PC Connection, Inc. with Patricia Gallup in 1982. )

AANDELEN SELECTIE VOOR DE DEFENSIEVE BELEGGER:

· Is het een hightech bedrijf of financiĆ«le instelling? (Liever niet) ……Nee PASS
· Omzet hoger dan €300miljoen? $2 900 miljoen…PASS……………..
· Financiering: (Current Ratio): vlottende activa (Current Assets)……$616m…… moet twee keer zo hoog zijn als de kort vreemd vermogen (Current Liabilities) ………$248………………. Current Ratio: …2,5 PASS…………
· Netto vlottende activa moeten hoog genoeg zijn om de lange termijn schulden te kunnen betalen: (Vlottende activa – Kort Vreemd Vermorgen) – (Lange termijn schulden) = …$350 PASS…………
· Groei van de winst over 7 jaar   ………100% PASS………………. meer dan 20%?
· Is het een Money Making Machine, dat wil zeggen, een bedrijf die de afgelopen 7 jaar elk jaar winstgevend was ? ……Ja PASS……… (of in ieder geval positieve cash-flow?) ………………………
· Earnings Yield: winst per aandeel …$2,1…./ ……$26……koers =  …8 % PASS (minstens 7%)
· Koers …$26. / boekwaarde per aandeel (equity per share)  …$18…….. verhouding lager dan 1,5 PASS
· Dividend ……$0,34…………. ? ………1 % (bij voorkeur wel)
· Aandeleninkoop (share repurchase) …Nee…………..

Graham Number = ……$29….. PASS (Liefst hoger dan koers)
Wortel uit (15 x Winst per Aandeel x 1,5 x Boekwaarde per Aandeel)

Deze criteria zijn afgeleid van Benjamin Graham's meesterwerk: 'De Intelligente Belegger’ pagina 100, Hoofdstuk 4: Algemeen Porfoliobeleid: De Defensieve Belegger 
Kansen en bedreigen: Bestaat dit bedrijf(stak) over 7 jaar?
Waarschijnlijk wel, maar niet 100% zeker?

Gaat de winst waarschijnlijk stijgen of dalen? ?????

dinsdag 6 maart 2018

Nagacorp a textbook example of Mr. Market's mood swings: intrinsic value and price

 A little over a year ago I did a Benjamin Graham Defensive Analysis of Nagacorp a casino in Cambodia. The price was 4,27 HKD (Hong Kong Dollars), this was the value investing graph:


http://sinaas.blogspot.nl/2017/01/nagacorp-intrinsic-value-benjamin.html 

This is the graph today:


This is value investing theory:

Nagacorp Graham Analysis today March 2018. 

An assumption of Earnings per Share growth ( through Nagacorp 2 expansion and extra gambling "junkets" from China) to 0,87 Hong Kong Dollars EPS is made.

SECTOR: [PASS] Nagacorp is in the gaming sector. Technology and financial stocks were considered too risky to invest in when this methodology was published. 

SALES: 
[PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. Nagacorp' sales of HKD 7 253 million, (€926m) based on 2017 sales, passes 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. Nagacorp' current ratio HKD1 222m/HKD618m of 2,0 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). The long-term debt for Nagacorp is HKD 0 million (or have convertibles been issued to the CEO for the Vladivostok expansion??), while the net current assets are  HKD 595 million. Nagacorp passes 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. Nagacorp' earnings per share have increased 240% since 2007.

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. Nagacorp's  E/P of 8%  (using the average of the last 2 years Earnings and a 2018 estimate) passes 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. Nagacorp has a Graham number of √ (15 x HKD 0,7 EPS x 1,5 x HKD 3,4 Book Value) = HKD 7,3 

Dividend ? : HKD 0,22/ HKD 7,91 = 3%

donderdag 1 maart 2018

ASM International ASMI intrinsic value based on Benjamin Graham number

ASM International is doing well. Business in ALD : Atomic Layer Disposition, about half of sales, is going well and expected to increase. 2017 profit of €7,6 per share was connected to the sale of part of ASMPT. Dividend has been increased to €0,80 from €0,70 and there will be a special dividend of €4,- per share.

SECTOR:  [FAIL]  ASM is in the Technology sector, which is one sector that this methodology avoids. Technology and financial stocks were considered too risky to invest in when this methodology was published. At that time they were not the driving force of the market as they are today. Although this methodology would avoid ASM, we will provide the rest of the analysis, as we feel times have changed.

SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than €260 million. ASM's sales of €737 million, based on 2017 sales, passes 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. ASM's current ratio €1 158m/€151m of 7.7 passethis test with flying colors.

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 ASM is €14 million, while the net current assets are €1 007 million. ASM passes this test easily.

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. ASM's earnings have increased 200% over the past ten years.

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. ASM's E/P of 5% (using this years adjusted Earnings of €3,2) 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. ASM has a Graham number of (15 x €3,7 EPS x 1,5 x €38,9 Book Value) = €57 

Dividend: €0.8/€62 = 1,3% and has increased over the years. ASM International is also buying back shares using its cash.

Conclusion: ASM has a very strong balance sheet and seems like a good pick for the Defensive Investor at a price of around €55, currently the price of €62, seems reasonable. 

Note: I haven't done much homework and don't understand the business or why profits were so high in 2013.  MachineOne.nl bought at €34,5 and sold at €45,97 February 1 st 2017, a 30% gain in less than a year.

In September 2017, we bought again at 51 and will sell around €65 if the price goes up quickly.

See: www.beterinbeleggen.nl for more in depth, qualitative analysis of "good" companies.

dinsdag 27 februari 2018

Stand maart 2018 inleg 2 400 Eur, Graham Waarde 4 287 Eur, korting 28%

In februari had ik Assured Guaranty niet meegerekend (staat nu wel in grafiek). Winst (en Graham Waarde) bij NN Group is sterk gestegen na Delta Lloyd overname. We hebben aandelen bijgekocht in markt dip van februari.




vrijdag 19 januari 2018

Stand februari 2018 inleg 2 350 Eur, Graham Waarde 3 943 Eur, korting 21%

We hebben Steinhoff gekocht, niet een Graham Defensive aandeel (teveel risico door schulden). De boekwaarde van Berkshire Hathaway van Warren Buffett is geschat op $140 per aandeel, hoger dan nu, door belastingsverlaging in de VS van 33% naar 21%.

De korting is afgenomen doordat veel koersen gestegen zijn. We hebben nu 262 Euro cash (8,5%) per persoon en kunnen volgens de "value averaging" methodiek profiteren van toekomstige koersdalingen.



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

zaterdag 6 januari 2018

Investing Inner Scorecard Ansgar John 2017

Mistake of omission:
Not buying Footlocker at $30 at Earnings Yield of 13% and passing Graham Defensive Criteria. Group process avoiding "retail" regardless of price.

Selling some Hibbett Sports at $10 after buying at $9 at height of maximum panic. Sell decision should be part of continuous portfolio optimization.

What is missing is a framework of "continuous portfolio optimization" Turtle Creek Canada, "active sizing" Alex Roepers, "buying on a scale" Walter Schloss
To do: 1

Today Steinhoff Holdings opportunity cost? Selling at a PE of 2 , earnings yield about 50%?

Not selling Seneca Foods eventhough management is mediocre, not shareholder friendly, allocating capital into a dying industry (canned foods).

Not understanding Interdigital business model. Take more time for in depth study. Best companies and why? Visual finance plus study with RM.

Looking at stock prices to much and not enough at underlying companies, moats, unit costs.
Thursday: stock price day and track 9% swing minimum.






donderdag 4 januari 2018

Thal... Holdings buybacks best scenario

Eerste vraag is hoeveel warrants zijn er? Warrants give people the right, but not the obligation, to buy shares at a certain price before expiration. I don't know if there are more warrants and what the price is at which shares can be bought.

13 september 2017: 500 000 warrants used to buy new Thal. shares. So there were 500 000 more shares after this day, than before. I don't know what the people paid for these shares.
-----------------------------------
The longer the share price of Thala... Holdings stays low, the more positive it is for longterm shareholders due to current and possible future buybacks.

The company has sold WG P its main company. At 20,6 million shares outstanding, this would be the situation:

Net cash                                               $21,3m
Shares in The Local Shopping REIT   $9,3m (at cost)
Autonomous Robotics Limited            $8m (at valuation of current offer)
Other                                                    $0,7m 
Total                                                     $39,3m
Per share: $1,91 book value per share or 1,41 GB Pounds

The company has been buying back shares under book value:
208 250 shares @ 1,05 GBP = 0,219m GBP
  80 000 shares @ 0,079 GBP = 0,079m GBP
110 000 shares @ 0,99 GBP = 0,109m GBP
400 000 shares @ 1,00 GBP = 0,4m GBP
798 250 shares    for     0,807m GBP

Shares today: 20,6m - 0,8m = 19,8m shares outstanding

Total book value = $39,3 - 0,8m GBP = $38,2m per share $1,93

Current budget to buyback more shares = 1,6m GBP (of original 4m GBP)

@ 1 GBP per share = 1,6m shares

After that:  19,8m shares - 1,6m = 18,2m shares outstanding
Book value $38,2m - 1,6m GBP = $36m
Book value per share = $36m / 18,2m shares = $1,98 = 1,46 GBP

@ todays share price 0,94 GBP, does a 6% lower buyback price make a big difference?

Shares 1,6m GBP budget / 0,94 GBP per share = 1,7m shares

After that: 19,8m shares - 1,7m = 18,1m shares outstanding
Book value $38,2 - 1,6m GBP = $36m
Book value  per share = $36m / 18,1m shares = $1,99 = 1,47 GBP

------------------------------------------------------------------------
Best scenario? Extra huge buyback of 10m GBP at 1 GBP per share?

Number of shares: 18,2m - 10m = 8,2m shares after major buyback

Book value: $36m - 10m GBP = $22,46m

Per share $22,46 / 8,2m = $2,74 per share or 2,02 GBP per share

You might be able to buy a Pound for 50 cents?

====
Overhead costs in the year?