I have now managed to go through the entire list of companies on DAX and have analysed them according to the contrarian approach that I have set out to be my way of investing. Many of the companies are expensive at the moment but some of them are unreasonably cheap. In the list below will be the links to each analysis and the P/E (at the time of when the analysis was made) of the company if you have missed one of them in the past.
On different note... I have made some changes to the blog because I found that the template I was using served little purpose and was just slowing down the speed. I am still fiddling around with the look of it and if you have any comments and remarks regarding it then please just let me know so that I can change things for the benefit of everyone.
adidas - P/E 31.9
ALLIANZ - P/E 10.0
BASF - P/E 13.6
BAYER - P/E 29.2
BEIERSDORF - P/E 37.6
BMW - P/E 10.4
Commerzbank - P/E 1156.2
CONTINENTAL - P/E 13.3
DAIMLER - P/E 10.1
DT. BANK - P/E 9.6
DT. BÖRSE - P/E 16.9
DT. POST - P/E 17.7
DT. TELEKOM - P/E -9.2
E.ON - P/E 14.7
FMC - P/E 12.2
FRESENIUS - P/E 17.3
HEID. CEMENT
- P/E 36.3
HENKEL - P/E 21.4
INFINEON - P/E 18.5
K+S - P/E 7.7
LANXESS - P/E 8.0
LINDE - P/E 21.0
LUFTHANSA - P/E 6.7
MERCK - P/E 13.6
MÜNCH. RÜCK - P/E 8.6
RWE - P/E 12.8
SAP - P/E 24.9
SIEMENS - P/E 18.2
THYSSENKRUPP - P/E -1.6
VOLKSWAGEN - P/E 3.8
If we exclude ThyssenKrupp, DT Telekom and Commerzbank due to unnatural earnings (losses) then we receive on DAX an average P/E of 16.5 so any company below that average value is fairly cheap and of interest to us contrarians! If I remember correctly the historical P/E value of companies is 16.9 which means that the "average" value in DAX is below the historical value. Some investors claim that stocks at some point will move towards this value. I do not know if this is true but instinctively I would assume it to be correct and even feasible that Adidas could drop from P/E 32 to P/E 16 due to bad results as well as getting out of favour on the market while it would be tougher for K+S to go from P/E 8 down to P/E 4 since it already is out of favour on the market and in both cases we talk about a 50% drop in share price.
I am definitely still wet behind the ears when it comes to investing and investments but I try to learn more every day. Lately I have been informed concerning different industries and companies having different P/E values and that it is justifiable which means that they are not even trying to return to the norm of P/E 16.9 because that industry is doing so well. I need to think a little about this because my instinct says directly "given time then I do not believe that to be true".
I will get back to it later on once I have read a little bit more and once I have figured out my own thoughts slightly better and then I will try to write an article about it.
If we exclude ThyssenKrupp, DT Telekom and Commerzbank due to unnatural earnings (losses) then we receive on DAX an average P/E of 16.5 so any company below that average value is fairly cheap and of interest to us contrarians! If I remember correctly the historical P/E value of companies is 16.9 which means that the "average" value in DAX is below the historical value. Some investors claim that stocks at some point will move towards this value. I do not know if this is true but instinctively I would assume it to be correct and even feasible that Adidas could drop from P/E 32 to P/E 16 due to bad results as well as getting out of favour on the market while it would be tougher for K+S to go from P/E 8 down to P/E 4 since it already is out of favour on the market and in both cases we talk about a 50% drop in share price.
I am definitely still wet behind the ears when it comes to investing and investments but I try to learn more every day. Lately I have been informed concerning different industries and companies having different P/E values and that it is justifiable which means that they are not even trying to return to the norm of P/E 16.9 because that industry is doing so well. I need to think a little about this because my instinct says directly "given time then I do not believe that to be true".
I will get back to it later on once I have read a little bit more and once I have figured out my own thoughts slightly better and then I will try to write an article about it.
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