Analysis of Celesio 2014

Company: Celesio

ISIN DE000CLS1001 | WKN CLS100

Business: A German wholesale and retail company that provides logistics and services to the pharmaceutical industry. Sadly enough there are very little to change for the text concerning Celesio. They themselves own 2,200 pharmacies, have an additional 4,300 as participants in brand schemes and are in total providing 65,000 pharmacies and hospitals with medication each day.

Active: They are only active in Europe and are present in 14 countries mainly northern Europe.

P/E: 34.3

Here you can find the previous analysis of Celesio.

The P/E of Celesio has improved since the last analysis but is still far, far too high with 34.3 and the P/B is also high with 2.5 which still gives a clear no go signal from Graham. We need to take notice that they share price has increased 15% since the last analysis. The earnings to sales are poor with only 1% and the ROE is also far too low with only 7.3%. The book to debt ratio I also do not find that much of interesting with its 0.4.
In the last six years they have had a yearly negative growth rate of -0.3% and their profits have decreased now for the forth year. Still this gives us a motivated P/E of 8 to 10 which means that Celesio is today highly overvalued on the market.
They pay a very tiny dividend of 1.1% which of course I do not like and the only good thing is that it does not represent more than 38%  of the earnings so they should at least be able to keep it up.

Conclusion: Graham is negative to Celesio and so am I. I honestly do not see one single value that I find even remotely good. I did not see it the last time I analysed them and I do not see it today either and yet the share price has increased by 15% and it is being traded at over 30 times their earnings. I guess someone sees something that I do not do because I will stay away from this one...

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