Tuesday 20 August 2013

Analysis of Immofinanz

An Austrian real estate company

Company: Immofinanz
Business: An Austrian real estate company were the activities are concentrated on prime properties both residential as well as commercial in four core segments: retail, office, logistics and residential.

Active: In eight core countries in both Western and Eastern Europe by this they ensure a balanced risk diversification. The countries are Austria, Russia, Poland, Czech Republic, Slovakia, Hungary and Romania. They claim diversification... I claim too much focus towards East.

P/E: 32.4

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

 The P/E values for Immofinanz are high with 32.4 but the P/B is pretty good with 0.7. This means that according to Graham it would be a buy but also not much more than that. The earnings to sales are ok with 14% but the ROE is only 2.1% so pretty weak. The book to debt ratio is 0.8 and when looking at the yearly growth it has been as low as 0.6% in the last four years so they have not even managed to beat the inflation. The motivated P/E becomes around 9 to 10 which means that the stock right now is highly overvalued by the market. They do pay an acceptable dividend of 4.8% but that represented 154% of the earnings which means that either they will have to push up their earnings significantly or we can  see a cut in the dividends in the future.

Conclusion: I would not invest in Immofinanz today even though Graham finds it acceptable. I would prefer to see them showing some better earnings before I would even start looking at them again.

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