Friday 20 December 2013

Analysis of KUKA

A German robotics and robotics systems producer

Company: KUKA

Business: A German producer of automated robotics for production industry. They are divided into three sectors: Laboratories (medical robotics products for medical device producers), Robotics (intelligent robotics that rationalize productions processes especially for the automotive industry) and finally Systems (simply the service and the customer-tailored solutions for receiving a rationalized production process on client location).

Active: Like the automotive industry they are active world wide but their strongest presence is in Europe and Germany.

P/E: 20.5

contrarian values of P/E, P/B, ROE as well as dividend
The P/E of KUKA is too high for me with 20.5 and the P/B I do not like at all since it is up at 3.8 which gives a very clear no go signal from Graham. Their earnings to sales are not amazing since it is only 3% but the ROE is close to excellent with almost 19%. Book to debt is awful with a ratio of 0.4! The yearly growth in the last five years has however been 6.6% which gives us a motivated P/E of around 19 to 22 which means that KUKA today is fairly valued by the market. To stay on top of things they make research which comes out at 77% of their earnings which I find surprisingly high but robotics is not some old fashion high-quality machine buildings that Germany is so famous for it goes beyond that. They pay a dividend that I do not even know if I should call it that... hmmm... they pay have a grain of a peanut in the size of 0.6% which happily only corresponds to 12% of their earnings. Still this was the first time in five years that they paid out dividend and they were hit very hard in the financial crisis due to that the car industry collapsed.

Conclusion: Interesting company but it is being already today traded too high for both me as well as Graham. P/E, P/B are simply too high and the only good things are growth and ROE and that is not enough for me to make an investment today.

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Anonymous said...

Mmmm. Kuka.

Fredrik von Oberhausen said...

Well... it does not arouse me enough for a deeper involvement.