Monday 4 May 2020

Analysis of Ratos 2020

Company: Ratos

Business: A Swedish investment company usually dealing with mid-sized companies in the Nordic countries. For the full list of companies please click here.

Active: Nordic countries and owning companies that are predominantly active in the Nordic region.

P/E: 9.1

There has been no previous analysis of Ratos.

The P/E of Ratos appears to be good with 9.1 and the P/B is also good with 0.8 which gives it a go signal from Graham.
The earnings to sales are not very good with 3% and neither is the ROE with 8.9%. The book to debt ratio (including their owned companies) are low with 0.5.
In the last five years they have had a yearly revenue growth rate of 0.5% which is not good and it gives us a motivated P/E of 7 to 9 which means that Ratos is today fairly valued by the stock market.
They paid out no dividends last year.

Future: Generally I am in favour of investment companies as long as they have clever people on their books and pay the right price for the companies. Ratos made some very poor decisions  a couple of years ago and it hurt them badly. The family that had stepped away from the company decided to once again step in. This and that the share price had dropped like a stone were the reasons for why I invested. For this reason I will also not increase my holding in Ratos.

Conclusion: It looks ok according to Graham but I will not increase my holding in the company.


Anonymous said...

Well, Ratos paid out 0.50 in dividends for 2019 as I remember...
... but I also agree on your comments for Ratos.
It can only be better in the future... :-)


Fredrik von Oberhausen said...

I also remember that they paid out a small dividend but then this page confused me when I went back to look at it again:

In the report they do however say that they did pay out 160 MSek ~ 0.5 SEK per shares which is around 2.1% which was done based on the earnings in 2018.