Thursday 27 August 2015

Analysis of AMS

AMS, an Austrian sensor company

Company: AMS

ISIN AT0000A18XM4 | WKN A118Z8

Business: An Austrian technology company. They are working with sensors and are involved in sensors that are mimicking all the human senses. Their products more specifically are: Audio, Chemical Sensors, Light Sensors, Lighting Management, Sensor Driven Lighting, Position Sensors, Flow Sensing, Precision Time Measurement, Power Management, NFC/HF RFID, UHF RFID, RF Transmitters & Receivers, Lightning Sensor, Sensor Interfaces, ASICs, Full Service Foundry and EoL Notifications.

Active: Present in 20 countries but are making sales world wide.

P/E: 22.6

This company was analysed due to a request from Matthias posted on the Analysis Requests page. 

contrarian values of P/E, P/B, ROE as well as dividend for AMS

The P/E of AMS is far too high for my liking with 22.6 and the P/B is also too high with 4.0 which gives  a no go from Graham. The earnings to sales are excellent with 21% and the ROE is great with almost 18%. The book to debt ratio is also very nice with 1.4.
In the last five years they have had an insane yearly growth rate of 17.3% which would then give us a motivated P/E of 30 to 40 which means that AMS is undervalued on the market today.
They are planning to stay ahead in their business and for this reason they are spending 79% of their earnings on R&D which I find to be a lot but nothing unheard of for technology companies.
They pay a silly dividend in the size of 1.1% which on the other hand only correspond to 25% of their earnings.

Conclusion: Graham is saying no to AMS and so do I. The P/E, P/B are too high and the dividend is simply too low for my liking. As a side note... I do not like companies that buy-back shares at levels well above P/E 20 since to me this makes me questions the CEO and board. I do not like companies that buy back shares and do not revoke them. I additionally do not like companies that keep issuing shares each year and on the other hand pay a dividend to the shareholders. AMS have by the look of things found their time in the market and the more robotics and self-driving cars etc the more these guys will profit. So I see potential in their products but not the current managers and the board.

If this analysis is outdated then you can request a new one.

No comments: