Company: Leoni
ISIN DE0005408884 | WKN 540888
Business: A Germany based supplier to the automotive industry. It is divided into two large division: Wire & Cable Solutions (develops, produces and assembles wires and strands, optical fibres as well as complete cable systems) and secondly Wiring System (develops and produces cable harnesses as well as complete wiring for the automobile industry).
Active: They are currently active in 33 countries (so +1 since last year) world wide and are pushing expansion in the BRIC countries.
P/E: 14.6
Here you can find the previous analysis of Leoni.
The P/E of Leoni is slightly too high for me with 14.6 and combined with a P/B of 1.9, which is a little high also, it gets outside of Grahams comfort zone. The earnings to sales are nto very impressive with 3% and the ROE is ok but not more with almost 13%. The book to debt also leaves some room for improvement since it is now down at a ratio of 0.5.
In the last six years they have however had an excellent yearly revenue growth of 5.1% which then gives us a motivated P/E of 15 to 19 which means that Leoni is slightly undervalued to fairly priced.
The spend plenty of money of research and increased it significantly last year so that it now is equal to 100% of their earnings which to me is a little bit too high.
They pay out a small dividend of 2.1% which happily only correspond to 31% of their earnings. By the look of things they seem to like to hand out around 30% of their earnings as dividend.
Conclusion: Graham now says no to this company and I tend to agree with him this time. The share price has increased almost 45% since we last look at Leoni which makes me less interested in it. Many of the key values are ok but also not more. If I would have owned them already I would have remained as a shareholder but I would not step in right now.
Leoni was kicked out from the Stocks of Interest list since they are too fairly valued at the moment.
If this analysis is outdated then you can request a new one.
No comments:
Post a Comment