Wednesday, February 25, 2015

Analysis of Etteplan


Etteplan, a Finnish engineering service company

Company: Etteplan

ISIN FI0009008650 | WKN 938050

Business: A Finnish service company. Their main focus is the engineering services and technical documentation solutions for the manufacturing industry. What they include in the manufacturing industry are: Automotive, Aeronautics & Space, Energy Equipment, Defence and finally Marine & Offshore.

Active: Currently in Finland, Sweden, the Netherlands and in China. The manufacturing companies that they service do however work world-wide.

P/E: 13.2


This company was analysed due to a request posted on the Analysis Requests page.

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

The P/E of Etteplan is fully acceptable with 13.2 but the P/B is a little too high with 2.8 which gives a no go from Graham. The earnings to sales look in my eyes low with 5% for a service company but that could simply be due to their customers being in low margin markets. The ROE is however excellent with 21,2% and the book to debt is ok with a ratio of 0.6.
In the last five years they have had an excellent yearly revenue growth of 4.7% which then also gives us a motivated P/E of 15 to 18 which means that Etteplan is today slightly undervalued on the market.
They pay a fully acceptable dividend of 3.7% which represents 50% of their earnings which is also fully ok.

Conclusion: Graham says no and I cannot help but to wonder if one can buy a good, yet small, company for a fair price today. The P/E is great, the P/B for a service company is also not too bad, the ROE is excellent and the dividend is also great. I only have two problems with Etteplan, it is small and the quantity of goodwill and intangible assets which together makes up almost 45 million EUR. Since my Eniro incident those kind of figures worries me and makes me back off.

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