Wednesday, March 15, 2017

Analysis of Tessenderlo 2017


Logo of Tessenderlo 2017

Company: Tessenderlo 

ISIN BE0003555639 | WKN 852064

Business: A Belgian chemical company. They currently have three operating segments : Agro (~40% of revenue with liquid crop nutrients, water soluble SOP and crop protection), Bio-Valorization (~31% of revenue with gelatine, pharmaceuticals, body-care and bio-resources) and finally Industrial Solutions (~29% of revenue with pipes, water treatment and mining).

Active: 21 countries and 100 locations.

P/E: 15.1

To find out more concerning Tessenderlo then please go to analysis of Tessenderlo 2016.

Contrarian analysis of Tessenderlo 2017

The P/E of Tessenderlo is a little bit on the high side with 15.1 and the P/B is definitely too high with 2.5 which gives a no go from Graham. The earnings to sales are ok with 6% but one must admit that the ROE is pretty impressive with 16%. The book to debt ratio is also fully ok with 0.8.
The revenue growth rate is not very impressive for the last five years since it is at -5.7% which then gives us a motivated P/E of around 8 to 10 which means that Tessenderlo is today a bit overvalued on the market.
They pay no dividend at all which I do not like.

Conclusion: Tessenderlo would not be of interest to Graham as it is today with especially the P/B as it is because the P/E is ok. The ROE is also very nice but the fact that they do not pay a dividend is also disappointing. I will remain as a shareholder in Tessenderlo.

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