Talanx annual report 2016

The report in full you can find here, to read my previous annual summary then click on Talanx annual report 2015 and to find out more regarding Talanx then go to analysis of Talanx 2015.

In the financial summary below we can see that it was a bit of a middle year in terms of revenue because the written gross premiums decreased compared to in 2015. However and this is a good news the earnings increased to 907 M € from 734 M € last year. It is interesting to see that the combined ratio has decreased to 95.7% and margins from primary insurances have also increased.

Conclusion: Talanx is doing pretty well and they keep gathering money in a little heap. The benefit when an insurance company does that is that they very often have skilled people that are good a weighing risks versus profits when they invest that money which many other companies does not naturally have in their organisation. I will remain as a shareholder.

Summary of May 2017

I have still not managed to buy any more stocks and when I take a look at the expenses coming up then I do not see that I will be able to buy anything during June. After vacation in July (for the two last weeks of June I will be in Sweden) I will need to start things up again. I am getting worried that this story will continue and I need to seriously break down what the costs are coming from.

The tax declaration has been filed in Germany. If everything works out according to the declaration then we might end up getting 3 to 4k € back which will be a welcomed addition. I had to call up Sweden to ask for my tax declaration. I got it during this week and I have already paid in the requested money. I wonder what has happened to the Swedish tax office. There has never before been any problems with me receiving the tax declaration but the last couple of years they seem to "forget" to send it out to me and of course... the responsibility to pay taxes lies on my shoulders.

One of my team members are have received an opportunity to go abroad for a couple of months as an expat. She will do a great job and I am happy to see her taking this chance. For me this means finding a new team member so that we can continue to reach our targets.

Soon I will have finished all the annual reports articles as well as analysis of my companies. I could wish that a lot of them would have been in a better state by now. Those initial investments that I made in banks and energy has been a drain on my stock portfolio from the very beginning. The start of how you build your portfolio is important.

For the previous summary please visit Summary of April 2017 and here you can see my stock portfolio as it is.

The total invested value is now up at: 89,217 € including a realised loss of -551 €. 

The value of the portfolio is today: 98,031 € and spread out I now have around 6,800 € in cash on the different accounts. The combined unrealised and realised loss is now at: 8,814 € (10%) which is not as good as one would have liked.

DAX have ended up having a good run and is now up at 12,823 points which means an increase of 2.5% which should be compared to my own stock portfolio that increased with only 1.7%.

Conclusion: DAX is doing much better again and for me it is still going only so, so. It feels hard to not be able to push in money each month as I would have liked to do but I have to look upon it as a temporary experiment of how a stock portfolio develops when you only work with what is there. At some point the hope would be that the portfolio is so large that any additional savings brought into it will just be silly but that is far, far into the future if ever.

Analysis of RWE 2017

Company: RWE 

ISIN DE0007037129 | WKN 703712 

Business: A German electricity and gas company. RWE currently have three pillars that it stands on: Conventional Power Generation (production of electricity, gas and oil), Energy Trading (buying and selling of electricity, gas and oil) and finally Innogyn (subsidiary, the green energy daughter).

Active: Europe mainly.

P/E: -1.9

Here you can find the previous analysis of RWE 2016. 

The P/E of RWE is awful due to the mega loss in 2016 and therefore it is down at -1.9 and the P/B is also very bad with 3.9 which gives a clear no go from Graham. Earnings to sales and ROE are equally bad due to the loss. However the book to debt ratio is amazingly bad! It is looking like DB and is down at 0.04. Woow!

In the last five years they have had a yearly negative revenue growth of -3.0% which gives us a motivated P/E of 8 which means that RWE is today overvalued by the market.

They spend money on R&D which is good. They are not paying out any dividends which I generally do not like but for a company that are on the boarder of going towards negative equity then they better keep all the money that they can get hold of.

Conclusion: Graham says no and so do I. The P/E, P/B, ROE and dividends are all bad. The amount of debt that they have are staggering. In the share price we have seen a turnaround but in terms of the company, in my opinion, I have still not seen enough to convince me. I will therefore not invest any more money until I see that but I will however remains as a shareholder.

RWE annual report 2016

To read the report in full please go here, to see the previous summary then click on RWE annual report 2016 and to see the previous analysis of RWE 2016.

As you can see in the financial statement below the revenue decreased by -4.8% and there were plenty of costs that in the end led to a spectacular result of -5.7 BILLION €. This now means that RWE has no more built up profits but at least they are not as bad as E.On that even have negative equity at the moment. The interesting thing is that the share price have increased massively lately and by the look of things investors are expecting a splendid 2017. But back to the figures below... to go -9.29 € per share in a year when the share price was down sniffing on 10 € per share is to me pretty much insane. Sure they do not correlate but still...

Conclusion: RWE had yet another bad year that was not only bad but pretty much breathtakingly awful. The entire world seems to believe that was the end of it because the share price is up over 17 € which makes very little sense based on 2016. I will remain as a shareholder.

Analysis of K+S 2017

Company: K+S 

ISIN DE000KSAG888 | WKN KSAG88 

Business: A German commodities company that are mining and processing raw materials. The group is divided into the two segments Potash & Magnesium (that is being used as standard and speciality fertilizers for enhancing the agricultural harvests) and Salt (de-icing, purified salt that are used for instance as table salt etc.). Lately their best business has been salt.

Active: Main focus in Europe and the US. Growing activity in Canada due to the Legacy project is now finished. Minor presence in South America and Asia. 

P/E: 25.6

The P/E for K+S is far too high for me with 25.6 but the P/B is very good with 1.0 which still in the overall gives us a no go from Graham. The earnings to sales are low with only 5% and the ROE is horrible with not even 4%. The book to debt ratio is ok though with 0.9.

In the last five years they have had a yearly revenue loss of -2.6% which is not so good and this then means that they have a motivated P/E of around 8 which means that they are currently overvalued by the market.

They try to stay ahead and for this reason they spend almost 8% of their earnings on R&D which is not a lot but it is also not a high tech business so it sounds about right.

They pay out a tiny useless dividend in the size of 1.3% which still corresponded to 33% of their earnings which means that there is room but K+S always pay out a %-age compared to what they earn which I find fair enough even though they should really pay out 50% of their earnings.

Conclusion: Graham says no and I say nothing. The P/E is high due to a bad year, the P/B is ok but earnings to sales and ROE is awful and the dividend was bad. From my point of view K+S must really show that the Legacy project was worth the money and until they have started to do that I will not invest any more money. I will remain as  a grumpy shareholder.