Tuesday 13 August 2013

Analysis of Gagfah

A Luxembourg real estate company

Company: Gagfah

Business: The core business of this Luxembourg company is the ownership and management of a geographically diversified and well maintained residential property portfolio containing approximately 145,000 apartments.

Active: Only in Germany

P/E: 43.7

containing value of P/E, P/B, ROE as well as dividend

The P/E of Gagfah is insane high with 43.7 which is not based on them having a bad years earnings however the P/B is pretty ok with 0.9 still according to Graham it is a clear no go to step in as shareholder. The earnings to sales is surprisingly high with 11% but then again the ROE is low 2.1%. The book to debt is not very good with 0.3 but I would have suspected it to be even worse for the real estate market we will have to see what the companies following afterwards look like. The revenue growth in the last five years has been 5.5% which is excellent because I would suspect that a real estate company would pretty much follow inflation. This gives a motivated P/E between 16 to 19 so the stock is highly overvalued by the market. They also do not pay any dividends.

Conclusion: This stock is highly overvalued and if I would own it I would sell it today because there is no motivation for a P/E of almost 44.

1 comment:

Fredrik von Oberhausen said...

This stock jumped almost 9% today due to that the new CEO claimed that they would increase their revenues by 25% per year in the future. A bald statement that is based on... I guess nothing or they will do some cooking of the books. Either way I wouldn´t even touch this company with tweezers.