Analysis of Elringklinger 2015

Company: Elringklinger

ISIN DE0007856023 | WKN 785602 

Business: A German supplier to the automotive industry. They are still divided into five segments: Original Equipment (manufacture and distribution of engines) , Aftermarket (spare parts for engines etc.), Engineered Plastics (high quality PTFE plastics for vehicles), Services (engine test benching for car producers as well as other suppliers) and finally Industrial Parks (leasing of land and buildings)  

Active: Europe, North America, Brasil, South Africa, India, China, Japan and Indonesia.

P/E: 14.9

Here you can find the previous analysis of Elringklinger. 

The P/E of Elringklinger is so, so with 14.9 and the P/B is ok with 2.0 still according to Grahams formula we get a no go. The earnings to sales are looking good with 8% and the ROE is acceptable with 13.6%. The book to debt ratio is at 1.0 so that is also good.
In the last five years they have had a yearly revenue growth of 10.8%! Which is excellent and this then gives us a motivated P/E of 25 to 30 which means that Elringklinger is undervalued on the market today.
To stay on top they spend 54% of their earnings in research and development which I find to be ok.
They pay a small dividend in the size of 2.2% which correspond to 33% of their earnings so at least they should be able to keep that up.

Conclusion: Graham says no and I am uncertain. They are, due to their extreme growth rate, allowed to remain on the Stocks of Interest list but for me there is nothing here that gets me excited. Everything, P/E, P/B, ROE and dividend, besides from the revenue growth is so, so and I do not invest according to so, so at this moment but who knows what will happen in the future.

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