Analysis of Scherzer

Company: Scherzer

ISIN DE0006942808 | WKN 694280

Business: A German investment company. They focus on three parts: Unknown (500-1000 stocks without analyst coverage), Unloved (due to restructuring, temporary problems in the sector or due to misunderstood business model) and finally Special Situations (mergers, take-overs and squeeze-outs as an example they have plenty of MAN (an old analysis of MAN) shares at the moment).

Active: Only within German jurisdiction.

P/E: 7.4

The P/E of Scherzer is excellent with 7.4 and so is the P/B with 1.0 which gives a very clear go from Graham. The earnings to sales are silly high with 74% but that comes from line of business. The ROE is fully acceptable with 13.6%. The book to debt ratio is excellent with 1.7.
In the last five years they have had a yearly negative revenue growth of -0.5% which then gives us a motivated P/E of 8 to 10 which means that Scherzer is today slightly undervalued on the market.
They pay no dividends which I do not like.

Conclusion: Graham says yes to this investment company and I do not know. I find the P/E and P/B acceptable as well as the ROE but I do not like that they do not pay dividends. The company has been around since 1880 and I am surprised that they have not managed to build up something bigger and that concerns me slightly.

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