This post first appeared on 8percentpa.substack.com
This company might be a giveaway with the sub-title above and loyal followers of this substack. In order to mask it a little, we are not revealing the currency below. This is a European activist stock and the company has to turn things around for share price to rally.
Financials (Dec 26)
- Net Sales: 8bn, OP: 0.8bn, Net Income: 0.4bn
- EBITDA: 0.8bn, Free Cashflow (FCF): 0.4bn
- Dividend: 4.5, Dividend Yield: 3.2%
- Net Cash*: c.5bn, Market Cap: c.7bn
*Net Cash: Cash + 50% of Inventory - Short-term debt - Long-term debt
Financial Ratios
- ROE: 7% (currently 3%), ROA: 5% (currently 1%)
- GPM: 80%, OPM: 5-10% (currently 3%)
- EV/EBITDA: 11.5x, EV/FCF: 14.4
- PER: 18.1x, PBR: 0.7x
- FCF Yield: 5.5%
As mentioned, an activist recently launched a campaign against this stock and tried to get onto the board of directors but was rebuffed. Since then, interested market participants and fellow substackers wrote a lot about this name and we have no shortage of deep research.
- Background and Business
We have written extensive about Swatch....
