Some reader recommendations: M6, Bongrain, Banknordik

First of all, thank you to anyone who recommends investments on the blog. It is always great to get new ideas. So let’s quickly check some of them if they would be interesting from my point of view:

Bongrain (ISIN FR0000120107)

Bongrain is a company I have been looking into quite often over the last view years. For some reason it always appears to be cheap.
Currently it trades at quite low multiples:

P/B 0.6
P/S 0.2
P/E Trailing 15, P/E 2012 ~8
Div. yield 2.7%.

However, despite the significant discount to book, Bongrain does not score well in my Boss Score. My model only calculates a fair value close to current prices.

The reason is mainly that ROE is simply relatively low. Over 10 years they managed 8.5% ROE over the last 5 years only 6.5%. They were always profitable but profitability is not really stable. L.D.C for instance shows better ROEs with less volatility. There would be clearly some “mean reversion” potential but I think that there are more interesting stocks in France at the moment.

For my investment philosophy, it is vital that a company earns at least its Cost of capital to make it a worthwhile investment. Bongrain seems to struggle with that. Unless there are dramatic changes in management or shareholder structure, I would prefer L.D.C. against Bongrain, but maybe I manage to have a more detailed look at Bongrain at some point in time.

M6 Metropole Television

M6 looks great from a free cashflow perspective and ROE, ROA and ROIC. The company has net cash (~2-3 EUR per share). In my model, it scores Ok, but due to the fact that it already trades at 2.2x book, the upside is limited.

Additionally, M6 is one of the shares where stated EPS do not correspond well with my own calculated “total return”. Especially in 2010, my model actually shows a loss:

EPS BV per share Dividend Tot Return Delta EPS
31.12.2007 1.29 6.07 0.95    
31.12.2008 1.07 6.17 1.00 1.05 -2.4%
31.12.2009 1.08 6.37 0.85 1.20 11.7%
31.12.2010 1.22 5.32 0.85 -0.19 -141.7%
30.12.2011 1.17 5.50 1.00 1.03 -13.9%

Instead of the expected increase in Book value based on the stated EPS, book value per share decreased in this year significantly. One would have to check what the reason is for this, but it doesn’t seem to be the result of a share repurchase.

In general, I do have also reservation against TV stations. There is a clear underlying shift going on, away from traditional media to internet media. I do not have a really good insight how far this would go but one can see the “classical” patterns which were mentioned in the book “The innovators dilemma”:

– there seem to be a series of “disruptive innovations” rather than a sustaining innovation
– traditional companies struggle hard, after ignoring this they now seem to overpay for access
– truly disruptive innovations are quite unpredictable and established companies have only a very small chance to prosper in such an environment

In those cases, in my opinion, it would be very dangerous to rely on past numbers and assume mean reversion. For the time being I would be very uncomfortable with “traditional” media company, unless it would be a “hard asset play”.

So again, M6 would not be one of my favourite French stocks at the moment.


Banknordik came up in the Gronlandsbanken analysis as the only other bank being active in Greenland.

Banknordik interestingly is the major bank in the Faeroe Islands, another one of those “Denmark related” islands.

Other than Groenlandsbanken, Banknordik seems to do 50% of their business in Denmark and only 50% in Faeroer. They seem to have taken over parts of a no bankrupt Danish bank But nevertheless, the stock looks appealing to me as I start to “warm up” for “specialist” financial stocks.

Banknordik looks like a very interesting stock and might be a “complimentary” position to Groenlandsbanken. So I will definitely look deeper into that one.


  • Hi mmi, do you have plans for the next boss score earning article? Otherwise I suggest covering Eastern Europe in the next one.

  • was hätte es denn zu teleperformance gesagt?

  • @mmi: Thank you for the info. If I would value GLNG defensively I get out a similar price, but for a short I have to take a smaller discount and more optimistic estimates in account.

  • Hi Nixda, I think GLNG is a good short candidate because of the dynamics in the shipping industry. In shipping there is no moat. So in the long term the enterprises will earn average returns. Because of the recent shortage of carriers returns in LNG shipping are extreme high. So GLNG trades at 3.6 book value currently. I expect that the LNG market will return to equilibrium in 2014 and the excess returns will vanish by then. The matter is lots more complicated than that, but it’s the basic idea.

  • What makes GLNG a good short candidate? I don’t follow GLNG closely as I don’t own it, but as far as I am know, they specialize on LNG shipping. Contrary to container or bulk shipping or oil tankers, in LNG a shortage of carriers as natural gas is cheap in the U.S. (approx USD20 per barrel of oil equivalent).

  • Vielen Dank bezüglich der Bewertung von Bongrain, der ich im wesentlichen zustimme. Ich habe mir aber trotzdem einige Aktien gekauft, da mir aufgefallen ist, daß die Käsebranche immer weiter konsolidiert und Bongrain mit Lactalis und Unibel. Zu den größten Herstellern gehört. Ich denke, daß über kurz oder lang die Konsolidierung zu höheren Gewinnmargen führt

    Ach ja, reine weitere Graham Aktie die ich halte, ist die KSB.DE, die im Boss score eigentlich recht gut aussehen müsste. >100 Euro net cash/Aktie, wachsende tangible Buchwerte, >40 Euro Gewinn/Aktie in 2012 etc.

  • Danke für den Post. Die Dividende von M6 lag 2009 aber laut HP bei 2,35 Euro. Die addierten Net Earnings der letzten 10 Jahre ergeben 1432,6 Mio. EUR vs. Buchwertwachstum + Div 1371,9 Mio. EUR. Dementsprechend stimmen Gewinn, FCF und CI ungefähr überein.
    Die mittelfristige Entwicklung des Fernsehens ist tatsächlich die interessanteste Frage. Allerdings steigt der Fernsehkonsum noch immer an. Außerdem sind m.E. Internet + Fernsehen nicht ganz kompatibel, weil man bei ersterem i.d.R. eher aktiv ist, während man beim Fernsehen nur passiv konsumiert.
    Gruß, R.

    • hallo,

      danke für die Info,scheint mal wieder ein Datenbug zu sein. Mit 2,35 dürfte der Score Ok sein, nicht spektakulär.

      Das Problem ist m.E. nicht der Fernsehkonsum sondern die Werbeeinnahmen. Hier scheint einfach das Internet einfach die Nase vorn zu haben.

      Verschwinden wird Fernsehen sicher nicht, ähnlich wie Radio. Die Frage ist aber wie groß das Stück vom Werbekuchen sein wird.


    • in der Tat haben in der Dtaenbank die 1.50 EUR Sonderdividende in 2010 gefehlt. Der Score wird etwas besser aber nicht so viel.

      Für mich bleibt es erstmal bei “no action”.

  • Ok try this link: for the google finanz data
    and this is the company homepage:

  • the Ticker is GLNG.

    “A bad Boss score does not mean a good short”

    I think so, but GLNG is probably both.

  • HI MMI, can you check the score for Golar LNG Ltd please? I guess it has one of the worst scores in the history of boss score and is an interesting short candidate (this time no Korean one).

  • Hallo,

    M6 ist ein Favarit von Frank Fischer (Shareholder Value Management AG/ Frankfurter Aktienfonds für Stiftungen), hat es am Wochende auf der Value Invest 2012 erwähnt. Liegt auch daran, dass das Unternehmen zur RTL Group (48,46% Anteil) gehört, somit ist es in sicheren Händen.


    • Danke für den Hinweis. Dass Herrn Fischers Anlagestil und meiner nicht ganz kompatibel ist, hat sich ja schon bei Reply gezeigt…

      Vielleicht ist es ein Top Investment, wer weiss ? Wie gesagt, ich habe generelle Probleme mit “old media”, ganz egal wieviele Zeitung Warren Buffet auch kauft.

      • Der Buffett Zeitungsdeal wird, glaube ich, in der Öffentlichkeit falsch beschrieben. Habe neulich gelesen, dass zwar die Zeitungen (vermutlich zu KGV 6 oder so) angekauft wurden, interessant wird die Sache aber wieder durch einen high-yield Kredit (Zins über 10%), der gleichzeitig an die nun optimierte Verkäufergesellschaft der Zeitungen ausgegeben wurde. Sofern die Zeitungen auch nur leicht profitabel bleiben (oder keine Verluste machen) ist Buffett nach unten gut abgesichert.

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