Monday 18 May 2015

Analysis of Infineon 2015


Infineon, a German semiconductor company

Company: Infineon

ISIN DE0006231004 | WKN 623100

Business: A German semiconductor company. They still have three focus areas: Energy Efficiency, Mobility & Security and four business areas: Automotive (chips manufacturing), Industrial Power Control (components for industrial applications), Power Management & Multimarket (power components for high frequency applications and smart grids) and finally Chip Card & Security (security systems for passports). 

Active: Claim to have 35,000 employees world wide.

P/E: 24.3

Here you can find the previous analysis of Infineon 2014.

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

The P/E of Infineon is very high with 24.3 and the P/B is also on the high side with 3.1 which gives a clear no go from Graham. Their earnings to sales are excellent with 12% but they ROE is unfortunately down at 13%. The book to debt ratio is excellent with 1.8.
In the last five years they have had an excellent yearly revenue growth rate of 5.6% which gives us a motivated P/E of 16 to 20 which means that Infineon is a bit overvalued on the market at the moment.
They spend a too handsome amount of money on R&D in my opinion since it is up at 103% of their earnings.
They pay a dividend in the size of 1.6% so nothing to run around being happy about which then also correspond to 38% of their earnings so I still think that Infineon needs to improve their earnings.

Conclusion: Graham and I are equal nay sayers to Infineon. It is simply too highly overvalued for being of any interest. The P/E is high, the P/B is high, the ROE is so, so and the dividend is very poor. So also this is nothing for us contrarians... at the moment.

If this analysis is outdated then you can request a new one.

No comments: