Sunday, June 11, 2017

Analysis of VW 2017


Logo of VW 2017


Company: Volkswagen 

ISIN DE0007664039 | WKN 766403 

Business: A German automobile manufacturer. The are still producing motorcycles, cars, trucks, large-bore diesel engines, turbochargers, turbo machinery, compressors and chemical reactors. They are however most famous for their cars and here are the Volkswagen brands. The next time you go for a spinn with your Ducati remember it is a Volkswagen you are sitting on and never forget that the many will always beat the few in the end... one way or the other. 

Active: World wide with sales in 153 countries. 

P/E: 13.4

Here you can find the previous analysis of VW 2016


Contrarian analysis of VW 2017


The P/E for Volkswagen is pretty good with 13.4 and the P/B is excellent with 0.8 which gives a very clear buy signal from Graham. The earnings to sales are not very impressive with 2% and neither is the ROE with 5.6%. The book to debt ratio is also on the low side with 0.3.
In the last five years they have shown a yearly revenue growth rate of 2.4% which is ok but also not much more which then gives us a motivated P/E of 10 to 14 which means that VW is today fairly valued by the market.
They pay out a silly dividend in the size of 1.5% which correspond to only 20% of their earnings so hopefully they will be able to keep this level unless there are any more unpleasant surprises around the corner.

Conclusion: Graham says yes and so do I. The P/E and P/B is great and they should be able to increase their earnings which will bring up the other values. The only reservation that I have is how many more costs will arrive due to the Diesel gate. USA tends to be very fast and EU is acting more slowly but they tend to get there in the end. I will remain as a shareholder but I will not buy more.

Saturday, June 10, 2017

VW annual report 2016


Front page of the VW annual report 2016


To read the report in full please go here and to read the previous summary then please click on VW annual report 2015 and to find out more regarding VW then please visit analysis of VW 2016. 

In the financial statement below we can see that things are going a little bit better again for VW. The revenue kept growing and the earnings are, well, not as they have been in the past but we can see a direct increase with the 5+ billion € that they could bring home. The costs for special items was halved compared to in 2015.




Conclusion: VW have seen better days but also worse. Hopefully by cleaning up their act we will not see these kind of blunders for as long as I will remain as a shareholder in VW. I still worry about what a structure built on fear can cause for a company and if I own any more such companies today?

Friday, June 9, 2017

Uniper analysis 2017


Logo of Uniper 2017


Company: Uniper

ISIN DE000UNSE018 | WKN UNSE01

Business: A German energy company. They are standing on three pillars: European Generation (from all kind of sources), Global Commodities (energy trading) and finally International Power Generation (Russia and Brazil).

Active: Europe, Russia and Brazil

P/E: -3.2

Contrarian analysis of Uniper 2017


The P/E of Uniper is awful with -3.2 due to losses but the P/B is looking ok with 0.9 which in the end still gives a no from Graham. The earnings to sales and ROE are meaningless due to the losses but the book to debt ratio is down at 0.3 which is low but not unusual.
In the last four years they have had a negative yearly revenue growth in the size of -8.2% which gives us a motivated P/E of 8 and Uniper is overvalued by the market today.
Insanely enough they pay a dividend in the size of 3.3% which in my book should never be done when you are showing losses. 

Conclusion: Uniper is showing a difficult year followed by a difficult year followed by a... If one goes back in their "history" then they have made  losses for the last four years. Not a good sign. Graham says no to this and so do I. I want to see some actual results and not only an increasing share price to make me happy and to make me even consider buying more shares. I will remain as a shareholder though.

Thursday, June 8, 2017

Uniper annual report 2016


Front page of Uniper 2016 annual report


To read the report in full then please go here. The only previous report to look back at would be the summary of Q2 2016 and I have still not managed to make an analysis of the company.

From the financial statement below we can see that Uniper is not having a good time. The revenue dropped by almost -30% going from 92 bn € to 68 bn € and the earnings, well earnings is the wrong word, or I mean the losses have remained well over -3 billion € for this year as well as the previous. Any lights in the end of that tunnel? The share price keeps going up so the investors must tend to think so.


Financial statement Uniper 2016


Conclusion: Uniper is having a hard time and they will really need increased energy prices to improve their situation. I received shares in this company as a gift and I will keep my gift for now so I will remain as a shareholder in Uniper.

Wednesday, June 7, 2017

Analysis of TJX 2017


Logo of TJX 2017

Company: TJX 

ISIN US8725401090 | WKN 854854 

Business: An American off-price apparel and home fashions retailer. They use several store names based on take overs and store concept and in the U.S. they have T.J. Maxx, Marshalls, HomeGoods, Sierra Trading Post and in Canada they have Winners, HomeSense, Marshalls and in Europe they got T.K. Maxx and HomeSense. 

Active: in the US, Canada, the Netherlands, Germany, the UK, Poland, Ireland and Austria.

P/E: 21.6

Here you can find the previous analysis of TJX 2016


Contrarian analysis of TJX 2017

The P/E of TJX is far too high for my liking with 21.6 and the P/B is horrible with over 10 which gives a very clear no from Graham. Earnings to sales seems reasonable with 7% and the ROE is spectacular with over 50%. The book to debt ratio is so, so with 0.5.
In the last five years they have shown a yearly revenue growth rate of 5.1% which is excellent and this then gives us a motivated P/E of 16 to 19 which means that TJX is today slightly overvalued by the market.
They pay a silly dividend in the size of 1.4% which on the good side only correspond to 30% of their earnings so there is room for improvement.

Conclusion: Graham says very clearly no to TJX and I also find it to be too expensive. The P/E is high and so is the P/B with a silly dividend. The only very good one is the ROE value. All this said I will neither sell my shares nor will I buy more so I will remain as a shareholder.

Tuesday, June 6, 2017

TJX annual report 2016


Front page of the annual 2016 report from TJX

To read the report in full please go herefor my previous summary please visit TJX annual report 2016 and to find out more about TJX then please click on analysis of TJX 2016.

In the financial table below we can see that TJX is doing pretty ok. The revenue increased yet again and this time by a bit over 7% which is good. The costs have however increased much more which leaves us pretty much flat compared to 2015 which I do not like that much. The only reason why things looks good when one compares EPS is due to that they are buying back shares.


Financial statement of TJX 2016


Conclusion: Revenue and expansion wise TJX is doing very well. When it comes to bringing home more earnings then they are not doing equally well. Still... it costs money to expand your business and TJX are expanding like crazy so I am fine with this and I will remain as a shareholder to see them crack the 40 billion USD revenue as they have promised to do.

Monday, June 5, 2017

Analysis of Talanx 2017


Logo of Talanx 2017

Company: Talanx 

ISIN DE000TLX1005 | WKN TLX100 

Business: A German mutual holding insurance company. It is divided into five divisions: Industrial Lines (covering all the insurance needs of industrial companies), Retail Germany (retail and commercial customers covering property/casualty), Retail International (outside of Germany), Reinsurance (non-life reinsurance via especially Hannover Rückversicherung that Talanx own to 50.2%) and finally Financial Services (an internal reinsurance part for the entire group). 

Active: In over 150 countries.

P/E: 9.2

Here you can find the previous analysis of Talanx 2016


Contrarian analysis of Talanx 2017


The P/E of Talanx is excellent with 9.2 and so is the P/B with 0.9 which gives us a clear buy signal from Graham. Earnings to sales are not so impressive with only 4% and the ROE is also not very exciting with only 10% but the book to debt ratio is looking ok with 0.7. They have changed their book keeping there slightly and they no longer calculate their float of 110 billion € as a liability. I am not able to say if this is a correct approach or not.
In the last five years they have shown a yearly increasing revenue growth rate of 3.2% which is good and this then gives us a motivated P/E of 14 to 16 which means that Talanx is today undervalued by the market.
They pay a very nice dividend in the size of 4.1% which represents 37% of their earnings so there is space to increase it.

Conclusion: Graham says yes to Talanx and so do I. The P/E and P/B is great and so is the dividend. Due to that the P/B is still below 1 it makes sense to invest in Talanx and when it goes higher then that interest is gone. Personally I will not buy any more shares but I will remain as a shareholder.

Sunday, June 4, 2017

Talanx annual report 2016


Front page of the annual 2016 report from Talanx


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.


Financial statement of Talanx 2016


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.

Saturday, June 3, 2017

Summary of May 2017


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.


Invested versus current portfolio during May 2017


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


Current portfolio May 2017


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.


Me vs DAX during May 2017


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


Logo 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


Contrarian analysis of RWE 2017

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.

Friday, June 2, 2017

RWE annual report 2016


Front page of the annual 2016 report from RWE


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...


Financial statement of RWE 2016


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.

Thursday, June 1, 2017

Analysis of K+S 2017


Logo 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

Contrarian analysis of K+S 2017

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.