Tuesday, August 27, 2013

Analysis of Deutsche Beteiligungs AG (DBAG)


A German investment company


Company: Deutsche Beteiligungs AG

Business: A German investment company that invest in successful companies whose products and services have gained them outstanding positions in their markets. The focus is on growth-driven, profitable, internationally operating companies.

Active: Mainly active in Germany but also in other European countries. The company they invest in are however active globally. For the full list please look here.

P/E: 5.6




containing values of P/E, P/B, ROE as well as dividend
The P/E of DBAG is very low with 5.6 and the P/B is good with its 0.9. This gives us a very clear buy according to Graham. The earnings to sales is excellent with 87% and the ROE is also great with 16.7%. The book to debt is very, very good with a ratio of 8.1 especially if one compares it to Berkshire Hathaway or even Loews Corporation for that matter. I guess the European investment companies are not as highly valued as the American ones. The yearly growth has for the last five years has been 12.7% which is excellent and we get a motivated P/E of 33 so the market has highly undervalued this company. They pay a very low dividend and obviously wants to push most money into new investments so it is as low as 2.2% which only represents 12.3% of the earnings so there will be no reason to lower it.

Conclusion: DBAG look very interesting. They have shown strong growth the last couple of years and they have a nice portfolio of companies I find it a very good company and would have no regrets investing in it even today. It will be added to my interesting stocks list when I update that the next time.

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2 comments:

PoomK said...

It seems to be too good to be true. According to the past some years of operation, the 2012 earnings seems to be extraordinary. So P/E ratio might not be a good index. I'm not sure if Graham would like that.

http://www.boerse-frankfurt.de/en/equities/deutsche+beteiligungs+ag+DE000A1TNUT7/key+figures

The intrinsic value of the holding company such as this one can be roughly estimated by its book value, because most of the assets are shares of other companies. As of today the market cap is m. € 263.41 and the book value (equity) is around m. € 249.80 - 266.20.

IMO, the stock is fully-valued. But that's just my brief viewpoint that I want to share.

I'm investing partly in Europe too, and your blog is very informative. Keep up good works!

Fredrik von Oberhausen said...

Hi PoomK,

First of all thanks for the great link! I have never been there before and never used it to analyse companies but it is excellent so I have added it to my "Sites for analysis" link list.

I simply do not know. You are now the third person telling me that the holding companies should be treated differently which means that it must be true for value investors.

I will try to write some kind of article later on as an attempt to try to collect my thoughts around it because right now there are a mixture of things turning up in my mind which gives me problems to decide how to treat it.

So thanks for the input! Every input that improves the investment strategy and investment thoughts are greatly appreciated!