Friday, 24 April 2015

Analysis of BMW 2015

BMW, a German car and motorcycle producer

Company: BMW

ISIN DE0005190003 | WKN 519000 

Business: A German car and motorcycle producer. They have three units which are: BMW (also motorcycle, and the production is almost completely in Germany), Mini and Rolls-Royce (both are still produced in the UK). In cooperation with Sixth they also have DriveNow which is a car sharing system.

Active: World wide sales of their cars and motorcycles.

P/E: 12.5

Here you can find the previous analysis of BMW 2014

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

The P/E of BMW is acceptable with 12.5 and the P/B is also acceptable with 1.9 which then only just gives us a no go from Graham. Their earnings to sales are good with 7% and the ROE is also good with 15.5%. The book to debt value is pretty low with 0.3 so that is a little less good.
In the last five years they have had a yearly revenue growth of 5.9% which is excellent and it then gives us a motivated P/E of 17 to 21 which means that BMW is undervalued on the market today.
They pay a so, so dividend of 2.6% which correspond to 33% of their earnings so they can hopefully keep it up also in the future.

Conclusion: Graham says no to BMW and so do I. The P/E, P/B, ROE and dividend are all fully ok and they have shown excellent growth and the share price reflect their accomplishment compared to last year. Today I would not step in as a shareholder in BMW but I would also not sell my shares if I would have had any.

If this analysis is outdated then you can request a new one.


Rafy said...


Are you still saying no to BMW, after it came down so much? Do you know why it is so low now?

Fredrik von Oberhausen said...

Hi Rafy,

I did not see that you had written a comment on the Blog but I did reply to you on twitter so I hope that is fine.

Still for the rest of you...

BMW are producing excellent cars. They are currently being traded below 100 € which is excellent so yes, BMW is definitely looking attractive right now.

The biggest reason for the drop seems to be the stock market crash in China because BMW have had a great earnings push from sales in China and I assume that there is now some fear regarding the future in China if the crash gets even more severe.

I find it highly interesting how the Chinese government is stepping into the stock market in China with strict regulations to stop the fall.