Saturday 15 February 2014

Analysis of Ganger Rolf

A Norwegian investment company

Company: Ganger Rolf

Business: A Norwegian investment company that are focused towards sea and sea activities. Their five investment areas are: Offshore-Drilling (shares in Fred Olsen Energy), Renewable Energy (shares in Fred Olsen Renewables), Cruise (shares in Fred Olsen Cruise Lines) Shipping / Offshore Wind (shares in First Olsen and in Fred Olsen Windcarrier) and finally Other Investment (which is shares in a media group as well as in some property). They seem to like Mr. Olsen and his company diversification towards the sea side.

Active: With their own investments only in Norway. However the companies that they have invested in are active on an international level.

P/E: 10.7

contrarian values of P/E, P/B, ROE as well as dividend

The P/E of Ganger Rolf is excellent with 10.7 and the P/B is also great with 0.8 which leads to a very clear buy from Graham. Since this is an investment company that are mainly living on sales of their investments as well as the dividend they receive I used the EBT (Earnings Before Tax) as their sale which means that the earnings to sale is not really showing a correct picture with 92%. The ROE is a little bit disappointing with 7.5% but the book to debt ratio is excellent with 2.4. Their growth in the last five years have not been very good and it has been -2.3% per year which gives us a motivated P/E of 8 to 10 which means that the shares are fairly valued on the market today. They do however pay an excellent dividend of 7.2% which represents 76% of their earnings so it could be possible to see a decrease of that in the future

Conclusion: Graham very clearly says that it is a buy on Ganger Rolf and I think that it can be a great investment in the long run for a dividend loving investor and I am personally slightly tempted to jump on board but there are so many interesting companies around at the moment as well as me not having money to invest so I will stay away.

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