Wednesday 11 September 2013

Analysis of Aevis Holding SA

A Swiss investment company in the healthcare sector.

Company: Aevis Holding SA (AHSA)

Business: A Swiss investment company with focus on the healthcare sector including clinics, eldercare as well as real estate. Their five big investments are: Genolier Swiss Medical Network SA which is private clinics in Switzerland, Swiss Healthcare Properties AG which is a real estate company focusing on medical real estate in Switzerland, Nescens SA, a brand dedicated to better-aging and Les Hauts de Genolier SA which is a company managing assisted living residences.

Active: Their activity if fully focused on Switzerland.

P/E: 133.9

contrarian values of P/E, P/B, ROE as well as dividend
The P/E of AHSA is very high with 133.9 and the P/B is at 2.8 which is also far, far too high. According to Graham this is not a company to invest in. The earnings to sales is less then what one should wish for with 1% and the ROE follows the same bad trend with only 2.1%. The book to debt is also fairly bad with a ratio of 0.27 but the have much real estate so the value is not a big chock. They have had an insane growth in the last five years of 21% and the amount of shares has doubled but more realistic future growth is maybe 5% and the motivated P/E becomes 14 to 16 so with its current P/E value of 134 the stock is highly overvalued and the market has insane expectations. Even if we count in the growth they have had lately we should still only give the company a motivated P/E of 50 so the stock is definitely overvalued. Since last year they have decided to pay a dividend of 0.86% so very, very bad and yet that represented 115% of their earnings. Why I wonder.

Conclusion: I would not invest in AHSA today! I do however find the healthcare sector interesting and then especially the eldercare which they are focusing on. By the look of it also the market seems to find that interesting and much more so than what I do since the P/E is far, far away from reason.

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