Saturday 14 September 2013

Analysis of Puma

A German sports shoe company

Company: Puma SE

Business: A German sports footwear, apparel and accessories company. They have three major brands: Puma, Cobra Golf and Tretorn. To find out more about the brands then please look here. It is interesting to see that all of the big sport shoes companies  have their own golf brand. Were the executives so unhappy with their golf results which must have been due to the clubs so that they had to create their own brand? Strange that these companies are not promoting golf into being a public sport instead of exclusive as it is still today in many countries. They could make big bucks on that lobbying activity. Even better they could find the direct data for that by taking a closer look at Sweden in the 90s' beginning of 00s'. Today it has died again but I am sure much money was made during those years.
Active: World wide but strongest sales are made in Europe and USA.

P/E: 47.0

This company was analysed due to a request that can be found here.

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

The P/E for Puma is very high with 47.0 and the P/B is also too high with 2.1. This means that Graham would not have picked this stock back in the days. The earnings to sales is also not very encouraging since it is as low as 2% and the ROE is not even touching 5%. The book to debt is good for a German company with 1.7. In the last five years they have had a yearly growth of 5.3% which leads to a motivated P/E of 17 to 19 and that means that the market is highly overvaluing the stock today. They pay a silly dividend of 0.2% which only represents 11% of their earnings... but still... 0.2%!

Conclusion: I see no reason to invest in Puma today. I find the stock far to expensive based on P/E, P/B as well as based on how low dividend they are paying out.

If this analysis is outdated then you can request a new one.

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