Analysis of Doro 2015

Company: Doro

ISIN SE0000215493 | WKN A0JM5W

Business: A Swedish telecom company. Doro is the leader in the senior telecare business. They are producing mobile phones, normal phones as well as additional communications tools for the elderly market. From what I understood they are planning to produce (everything is outsourced though) their own tablet now also...

Active: In 30 countries on five continents.

P/E: 14.7

Here you can find the previous analysis of Doro.

The P/E of Doro is ok, on the border of too high with 14.7 and the P/B is also too high with 3.1 which gives a clear no go from Graham. The earnings to sales are ok with 5% but I would have expected a bit more for a niche market. the ROE is however excellent with 21%! The book to debt ratio is a bit too low for me with 0.6.
In the last five years they have had a spectacular yearly revenue growth of 18.3%! This then gives us a motivated P/E of around 30 to 35 which means that Doro is highly undervalued on the market today.
They pay a very nice dividend of 3.5% which represents 52% of their earnings so they should be able to keep it up!

Conclusion: This is one of those growth companies that Graham directly says no to and by the look of things the market do not expect them to be able to grow much more in the future. I do not agree with either of them. I find the P/E to be acceptable, the ROE and dividend are excellent and especially for a company showing this kind of massive revenue growth. Now I step out of my boarders on this one but I see many similarities between Doro and Apple. I consider both to be more design companies than anything else. Doro is allowed to remain on the Stocks of Interest list.

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