Friday 27 June 2014

Analysis of ThyssenKrupp 2014

Thyssenkrupp, a German steel and steel products company

Company: ThyssenKrupp

Business: A German steel and steel products company.  They are dividend into six business areas: Components Technology (assembled camshafts and ready-to-install net-machined crankshafts and engine components), Elevator Technology (passenger and freight elevators, escalators, moving walks, passenger boarding bridges as well as stair and platform lifts), Industrial Solutions (design and construction of chemical plants, refineries and other industrial facilities), Materials Services (carbon and stainless steel, tubes and pipes, nonferrous metals and plastics), Steel Europe (carbon steel flat products) and finally Steel America (production, processing and marketing of premium carbon steel products).

Active: Present in over 80 countries world wide.

P/E: -8.6 (P/E5: even worse!)

Here you can find the previous analysis of ThyssenKrupp.

Contrarian values of P/E, P/B, ROE as well as dividend for ThyssenKrupp

The P/E for ThyssenKrupp is awful with -8.6 due to yet another year of losses. The P/B has since the last analysis gone far, far in the wrong direction and is now as high as 5.4 which gives a clear no from Graham. Earnings to sales as well as ROE is negative due to losses. The book to debt ratio is looking like a poorly run bank with 0.07. in the last six years they have had a yearly growth rate of -5.3% so no good at all. With a bit of closed eyes we could maybe say that they should have a motivated P/E of 8 which means that they are highly overvalued on the market today (since a P/E of 8 would at this share price correspond to an EPS of 2.65 € and in this first half year they are currently, not negative so an applaud for that but, at they are only at 0.37 € per share). They spend some money on research but obviously not enough and they have for the last two years not been paying any dividends.

Comment: When I see things like this I really wonder what is going on. They have increased the amount of shares by 10%. They made a loss in the full year of 2013 which means that they have now made losses in four out of the five last years... and yet... the share price has increased with almost 47% in the same time period. Am I the stupid one here? I guess I must be.

Conclusion: Graham says no and I say the same. Not one single key value is looking good or even being close to looking anything acceptable. The only thing that has looked good since the last analysis, as mentioned in the comment above, is the share price development but that I do not even think that I will bother to try to figure out why that has happened.

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

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