Thursday 25 July 2013

Analysis of AS Création Tapeten

A German wallpaper company

Company: AS Création Tapeten

Business: The leading wallpaper manufacturer in Europe today based in Germany with more than 6000 different wallpapers in all material qualities and for all application areas. A.S. Création offers its customers a wide range of services: comprehensive departmental planning, shop-fitting, ordering, decoration, individual marketing concepts, sales promotional packages, concepts for point-of-sale (POS), as well as a 24-hour delivery service.

Active: They are mainly active within Europe with several sales offices hat are located in Germany, France, the United Kingdom and the Netherlands besides from Europe they also have a sales office in Moscow.

If you would like to read a more proper analysis from 2011 then please check out this article from a fellow blogger please be aware of that it is in German.

P/E: 14.7

This stock I found by just digging in the section of low P/E stocks back in early spring 2012. I must admit that I like the concept of wallpaper. Everyone has for a long time been painting all the walls white and to very easily add some complicated pattern (photo or other painting) in some small section/sections of the room via a wallpaper would be nice in my opinion. The old way of completely covering entire rooms in wallpaper I think will not so easily come back again.

Containing values of P/E, P/B as well as dividend

The P/E is 14.7 which is slightly too high for my liking however the P/B is not more than 1.2 which gives according to Graham a clear buy signal. The earnings to sale is lower then what I would have expected with only 4% however they have an excellent book to debt with a ratio of 1.4. The growth in the last couple of years has been fully acceptable but not much more with 2.5% per year. This then gives us that the motivated P/E for the Creation Tapeten is around 13 to 14. This means that the market today has the stock fairly valued based on their past growth. They pay a dividend of 3% which represents 45% of earnings which means that they should be able to at least keep that level unless something unexpected happens.

Conclusion: In my opinion this would be a nice company to own for the long run. When I started to look at it was down at 25 € per share and I regret of course that I did not buy it back then... however one should never mourn the missed chances because there will always come more and new ones. Today I would be a bit careful with buying the stock. If I would own it already I would keep it but personally I would have preferred it dipping down closer to P/E of 10 to 11 before stepping in as a new shareholder.

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