Magic Sixes – “new entries” quick check (BAM, ENEL, Mr. Bricolage, Europac)

After the recent stock market declines I had a look into the “Magic Sixes” screen (P/E < 6, P/B 6%), if some interesting companies show up as potential candidates for “contrarian” Plays.

Currently, using Bloomberg, the following “new” companies seem to be interesting:

BAM Groep

P/E 5.9, P/B 0.49, Div. Yield 6,42%

Dutch constrcution group. However highly leveraged, lots of goodwill and negative free cash flow, chart looks like a falling knife on the way to zero —> NOPE

ENEL SpA

P/E 5.4, P/P 0.57, Div. Yield 10.7 %

Large Italian utility.. Political risk, high debt load and negative tangible book. Howver significant free cash flow genration –> WATCHLIST

Mr. Bricolage

P/E 5,3, P/B 0.4, Div. Yield 6.34%

French DIY chain. Relatively low tangible book, relatively high debt but improving. Stable results over past year —> WATCHLIST

Europac

P/E 4.6, P/B 0.6, Div. Yield 7.7%

Spanish paper and cardboard producer. Good tangible book, however relatively high debt load. Volatile Free Cashflow generation, although very profitable in 2011 —> WATCHLIST

Summary: It is interesting to see that some “normal” companies enter into the “Magic Sixes territory”. So the choice for contrarian invetsments is getting better.

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