Jeg har skrevet en update i kølvandet på Glunz & Jensens årsrapport, der kom i går. Det gør jeg fremover på InRater.com under Fund Manager -> Hammerinvesting efter hver kvartalsrapport for de selskaber jeg har i portføljen. InRater er et betalingssite og månedsafgiften for at få adgang til kvartalsopdateringer, nye dydbeborende analyser og investeringsidéer samt adgang til portføljen er 15 dollars/md.
(Bemærk at nedenstående er en kvartalsopdatering og ikke en længere analyse. Sidstnævnte går jeg selvfølgelig langt mere i dybden med end det er tilfældet her)
Glunz & Jensen
Market value: 83 mio. DKK
P/B: 0,63.
P/E: Negative.
In line with expectations - yay!
For the second quarter in a row, Glunz & Jensen's results were in line with the expectations that was previously communicated. The market celebrated the unexpected(!) news with a 10% rise - despite reporting a small loss of -2,7 mio. DKK for the year. For the last couple of years the company has been overly optimistic and so the market has come to expect disappointments. Of course this is also reflected in the share price, so if they start to deliver again solid gains can be expected.
So why am I a shareholder in this company?
There are a number of reasons. Perhaps the most significant being that I believe we will see a significant sales uptake following the DRUPA-exhibition in Germany in 2016. DRUPA is significant because it is the most important exhibition in the printing industry worldwide, and it is one that only takes place every 4 years. In previous annual reports G&J have commented on "the DRUPA-effect" when explaining results before and after the exhibition. This leads to the question whether the disappointing results for the last two years can, in part, be explained by customers delaying their planned investments till after the exhibition.
In the annual report we see that development costs have risen by 50% from 10 mio. DKK to 15 mio. DKK. I think much of this is driven by the wish to have cutting edge products ready in time for the exhibition. As a sidenote: Had G&J kept development costs at the same level as last year, they would not have been in the red for the year.
Industry player takes a position in G&J
Offset printing is a declining industry and flexo printing is only increasing at a modest rate. For a non-expert in the industry it is therefore reassuring when another industry player takes a position in Glunz & Jensen. Heliograph Holding GmbH's 5% position isn't exactly a monster investment (4 mio. DKK), but still I think it is reasonable to view the downside as somewhat more limited following this.
Valuation and hidden assets
Currently the price-to-book ratio is at 0,63. Consider that
1) G&J has investment properties worth 90 mio. DKK according to external experts (note 12 in the annual report) and in the balance sheet that number is 67 mio. DKK
2) They are not losing equity. ROE is not in negative territory, which is usually the case when stocks are priced at such depressed levels.
3) The upside is quite large if results return to what they were only 2-3 years ago. Profits after tax were 25 mio. DKK and 22 mio. in 2012 and 2013 - though those were following DRUPA 2012. Still with a market cap of only 83 mio. DKK the upside potential is substantial.
(Bemærk at nedenstående er en kvartalsopdatering og ikke en længere analyse. Sidstnævnte går jeg selvfølgelig langt mere i dybden med end det er tilfældet her)
Glunz & Jensen
Market value: 83 mio. DKK
P/B: 0,63.
P/E: Negative.
In line with expectations - yay!
For the second quarter in a row, Glunz & Jensen's results were in line with the expectations that was previously communicated. The market celebrated the unexpected(!) news with a 10% rise - despite reporting a small loss of -2,7 mio. DKK for the year. For the last couple of years the company has been overly optimistic and so the market has come to expect disappointments. Of course this is also reflected in the share price, so if they start to deliver again solid gains can be expected.
So why am I a shareholder in this company?
There are a number of reasons. Perhaps the most significant being that I believe we will see a significant sales uptake following the DRUPA-exhibition in Germany in 2016. DRUPA is significant because it is the most important exhibition in the printing industry worldwide, and it is one that only takes place every 4 years. In previous annual reports G&J have commented on "the DRUPA-effect" when explaining results before and after the exhibition. This leads to the question whether the disappointing results for the last two years can, in part, be explained by customers delaying their planned investments till after the exhibition.
In the annual report we see that development costs have risen by 50% from 10 mio. DKK to 15 mio. DKK. I think much of this is driven by the wish to have cutting edge products ready in time for the exhibition. As a sidenote: Had G&J kept development costs at the same level as last year, they would not have been in the red for the year.
Industry player takes a position in G&J
Offset printing is a declining industry and flexo printing is only increasing at a modest rate. For a non-expert in the industry it is therefore reassuring when another industry player takes a position in Glunz & Jensen. Heliograph Holding GmbH's 5% position isn't exactly a monster investment (4 mio. DKK), but still I think it is reasonable to view the downside as somewhat more limited following this.
Valuation and hidden assets
Currently the price-to-book ratio is at 0,63. Consider that
1) G&J has investment properties worth 90 mio. DKK according to external experts (note 12 in the annual report) and in the balance sheet that number is 67 mio. DKK
2) They are not losing equity. ROE is not in negative territory, which is usually the case when stocks are priced at such depressed levels.
3) The upside is quite large if results return to what they were only 2-3 years ago. Profits after tax were 25 mio. DKK and 22 mio. in 2012 and 2013 - though those were following DRUPA 2012. Still with a market cap of only 83 mio. DKK the upside potential is substantial.
