SECTOR:[PASS] Krka Group is a pharmaceutical company and 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. Krka Group's sales of €1 200 million, based on 2017 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. Krka Group's current ratio: €848m current assets / €317m current liabilities of 2.7 passes the 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 Krka Group is €116 million, while the net current assets are €131 million. Krka Group passes 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. Krka Group has consistently made money, but earnings have only increased 15% since 2007. Krka Groupfails this test.
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. Krka Group's E/P (using the current 2017 profits) are €4,5 / €9 = 8,5% and 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.Krka Grouphas a Graham number of √(15 x €4,5 EPS x 1,5 x €44 Book Value) = €66,7 Price (wat de gek ervoor geeft) is € 53 December 7th 2017. Dividend: 2,75/53 Euros is 5,1% note that the dividend has been increasing during the past years.
Conclusion: Krka Group is a defensive stock. The increase in earnings over the past 10 years is slightly lower than Graham stipulated. The stock probably won't make you rich over-night but should help increase your wealth over time.
Comments, questions or E-mails welcome: ajbrenninkmeijer@gmail.com
We hebben Genesco bijgekocht een retailer met hoge korting ten opzichte van Graham waarde. De laatste aandelen Corning Glassworks zijn verkocht toen de koers tot $32,50 ongeveer de Graham waarde steeg. Ook United Natural Foods (leverancier aan Amazon Whole Foods) hebben we met winst verkocht toen de koers steeg naar $46,04.
We hebben ook ASM International bijgekocht vandaag. De verkooppunt hiervan is iets hoger in verband met analyse van machinist Marc Mochel die veel verwacht van het bedrijf.
De stijging van de Graham waarde zal niet zo snel gaan in de toekomst als de afgelopen maanden. Er zijn sprongen dit jaar geweest o.a. door de aanschaf van NN Verzekeringen en BMW aandelen. Onze verwachting is ongeveer 9% gemiddeld per jaar. (Behaald door de Validea Stock Screen sinds 2003).
ASM International deels verkocht en meer Genesco en Natural Alternatives met meer Waarde in vergelijking met Prijs (koers) gekocht. Dollar 2% gestegen t.o.v. Euro.
Ondanks een maandelijks inleg van 50 Euro is de totale Graham waarde afgenomen sinds begin juli. Dit komt met name door de afgenomen omzet en winst bij retailer Hibbett Sports. We berekenen nu de Graham waarde met $1,30 Earnings per Share (winst per aandeel) in plaats van $2,50. We hebben ook Interdigital.
We zijn nu 100% in aandelen belegd doordat de Mr. Market price (wat de gek ervoor geeft), de afgelopen maanden met minder dan 1% per maand is gestegen. De planning cash versus aandelen moeten we updaten voor de komende perioden.
Outokumpu is a global leader in stainless steel and is executing a large-scale transformation in its operations with a target to return to the sustainable profitability. Following the merger with the German steel conglomerate Inoxum in 2013, Outokumpu has consolidated its production capacity in Europe, established a strong foothold in the Americas, and decisively implemented cost efficiency measures and saving programs in order to lower the overall cost level of the company. As a result, today Outokumpu is a global leader in stainless steel with a unique global production set-up.
Outokumpu strategy focuses on areas, where the company aims to further increase its operational efficiency to make the most of the Group’s assets and leverage its strengths to differentiate from competitors. In order to leverage its strong presence in the most attractive key markets, Outokumpu builds on its strong legacy in quality, innovation, and technical expertise, and systematically improves delivery performance and customer relationships in order to provide the best customer experience in the industry.
Dutchman Roeland Baan became the CEO on January 1st, 2016 and is working to improve safety, decrease debt and cut costs (including the number of employees). His efforts seem to be paying off.
SECTOR:[PASS] Outokumpu 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. Outokumpu's sales of €5 700 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. Outokumpu's current ratio €2 483m/€1 942m 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 Outokumpu is €1 502 million, while the net current assets are €541 million. Outokumpu 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. Outokumpu made a loss from 2008 through 2014. Outokumpufails this test.
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. Outokumpu's E/P (using the current 2017 profits) are €1,2/€9 = 13,3% and 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.Outokumpu has a Graham number of √(15 x €1,2 EPS x €6,21 Book Value) = €12,95 Price (wat de gek ervoor geeft is € 9 (5 october 2017).
Conclusion: Outokumpu does not seem expensive, but is not a Graham Defensive Investment. The question is partly, how much faith do you have in the new CEO Roeland Baan? Here he is discussing 2017 Q2 results:
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