Monday 28 April 2014

Analysis of TransContainer

A Russian logistics company

Company: TransContainer

Business: A Russian logistics company. They have four pillars to stand on: Rail Container Transportation (moving the containers by train ca: 28% of the revenue), Freight Forwarding & Logistics Services (Preparation of shipping, shipping door-to-door etc. 55% of the revenue), Terminal Services (loading, unloading and storage 11% of revenue) and finally Container Trucking (From for instance harbours to clients warehouse etc. 5% of revenue).

Active: The entire Easter Europe block including Germany and Turkey, Russia with neighbours and in Asia they are present in China and Japan.

P/E: 6.5

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

The P/E of TransContainer is excellent with 6.5 and the P/B is so, so with 1.2 which gives a very clear buy from Graham. Their earnings to sales are at 15% which I find good and the ROE is running at 19% which is great! The book to debt ratio is also very nice with 2. In the last five years they have had a yearly growth rate of +19% which is spectacular and this then gives us a broad motivated P/E of 25 to 45 which means they are highly undervalued today on the market. They pay a fully acceptable dividend of 3.1% which only represents 20% of their earnings so they should be able to keep it up.

Conclusion: The company looks very nice and both Graham and I say yes to this one due to nice P/E, ROE and an acceptable dividend. They had already published their Q1 for 2014 and it looked like a pretty good start to the year. 2014.

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