Analysis of Polytec

Company: Polytec

ISIN AT0000A00XX9 | WKN A0JL31

Business: An Austrian automotive supplier that have around two thirds of their workforce in Germany. They have four business units: Plastics (injection moulded components for engine compartments and vehicle interiors and exteriors), Composites (SMC exterior parts to the European commercial vehicles industry), Car Styling (accessories, small series parts and systems for the automotive world) and finally Industrial (plastic moulded parts and polyurethane coatings for a wide range of industrial applications)

Active:  In Austria, Germany, Hungary, Belgium, Netherlands, UK, Czech Republic, Slovakia, Turkey, Canada, USA, China.

P/E: 10.3

The P/E for Polytec is fully acceptable with 10.3 and the P/B is excellent with 1.1 which gives a very clear buy signal from Graham. The earnings per shares I find low with only 3% and the ROE is so, so with 11%. The book to debt ratio is however excellent with 1.0.
In the last five years they have had a yearly negative revenue growth of -4.7% which is bad and this gives us a motivated P/E of around 8.5 to 10 which means that Polytec today are fairly valued on the market. Polytec is usually growing via acquisitions and they are looking a bit like an investment company when one follows the acquisitions and not to forget the sales of parts and divisions that they have made over the years.
They pay a very nice dividend of 3.8% that represents 39% of their earnings so they should hopefully be able to at least keep it with remained earnings as they seem to have according to the Q3 2014 report.

Conclusion: Graham is directly saying yes to Polytec and I am interested but not fully convinced due to their major fluctuations in revenue. Still the P/E, P/B and dividend are all good and if the car industry will pick up then these guys will directly follow. Since they make polymers they should also profit from a decreased oil price from which almost all monomers are coming from so the future may look bright...

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