Saturday 27 July 2013

Analysis of Sektkellerei Schloss Wachenheim (SKSW)

A German sparkling wine producer

Company: Sektkellerei Schloss Wachenheim (SKSW)

Business: A German based world leader in sparkling and semi-sparkling wine production, with sites in Germany, France, Poland, Romania and the Czech Republic for production. The market brand names are Faber, Feist, Light Live, Schloss Wachenheim, Nymphenburg Sekt, Schweriner Burggarten, Charles Volner, Muscador, Opéra, Cin&Cin and Dorato. The company group also sells other product ranges such as wine, alcohol-free wine, vermouth, spirits and other wine-based drinks.

Active: The sell their products in over 80 countries on all continents.

P/E: 8.1

I found this company by digging through the low P/E companies and I must admit that I got directly tempted to buy it. In the end I did not buy it directly and it was based on that I, in my ignorance, can not remember even trying one of the products or for that matter to have seen it in shops. I am sure that I have tried one of their products as well as that I have seen it but since I obviously had not gone wooow I decided not to make the investment. Now based on the figures... I think maybe I should find a couple of bottles and try them and then see how I feel about it again...

containing value of P/E, P/B as well as dividend

The P/E for SKSW (my own short for it!) is excellent with 8.1. The P/B is also excellent with 0.5 and it is according to Graham a very, very, very clear buy! The earnings to sales are much lower than what I would have expected with only 3% that is more or less like Wal-Mart. The book to debt is ok with 0.8 however the growth has not been so good in the last five years and we see a -0.6% per year. It is based on a high revenue in 2008 which then dropped. An interesting point there though is that they had a very low profit in 2008 so they seem to have taken control on their costs since then. Either way the motivated P/E due to the growth is around 9 which means that it is almost fairly valued on the stock market. They pay a dividend that represents 2.6% which is only 21% of the earnings so plenty of space to continue to increase the dividends.

Conclusion: The company is a very clear buy. I will have to go out and find one of the bottles and try it out. The company will be added to the Stock of Interest list that I will try to update each month.

1 comment:

Fredrik von Oberhausen said...

I had a dinner party tonight and managed to find Faber in my store. I bought the half dry one. The price was 5 euro for a bottle and the taste was fully acceptable. Very fruity and i think that even the dry one would have been good because of how fruity it was. Either way i have no objections due to the bottle i tried and Reichelt market it which means a large market potential in Germany.