Tag Archives: Magix Sixes

Magic Sixes – Quick Check Iren SpA (ISIN IT0003027817)

One of the companies which recently appeared in the Magic Sixes Screening (P/B < 0.6, P/E 6%) is another Italian Company named Iren Spa.

Based on “simple” criteria, the Share seems to be really cheap:

P/B 0.58
P/E 4.59
Div. Yield 9,15% (!!)

The description of the business in Bloomberg reads as follows:

IREN S.p.A. generates, distributes, and sells electricity and district heating. The Company manages natural gas distribution networks, markets and sells natural gas and electricity, and manages water services.

Based on available data, the bulk of the business seems to be energy distribution, geographically 100% of the business is done in Italy.

Market Cap is around ~ 1bn EUR– There doesn’t seem to be a single majority shareholder.

The company was IPOed almost exactly 11 years ago at 2,70 EUR. Even taking into account dividends, the performance from the initial IPO was around -6% p.a., which is better than the Italian BM index (9% p.a.).

However, the first thing I usually check is the debt load and free cashflows.

Currently, they have around 2.14 EUR per share net debt per share, which results in an enterprise value of ~3,50 EUR per Share. Based on trailing 12M EBITDA of 0,43 EUR, this results in 12M trailing EV/EBITDA of 8,8x, which for a Italian utility seems to be quite rich.

Based on Bloomberg, free cashflow has been negative for every single year since IPO.

Last but not least, only 0,42 EUR of the 1.42 EUR book value is “tangible”. One would have to check, if certain infrastructure licenses are included in the intangible part.

However at this point I can already stop summarize:

For me, the combination of a large debt pile, negative free cashflows and a significant portion of non-tangible book value makes Iren SpA more or less uninvestible. Based on the pure financials without any further analysis there doens’t seem to exist any Margin of Safety despite qualifying as “Magic Sixes” stock. For the time being, Iren will not be analyzed further as there seem to be more attractive “targets”.

“Magic Sixes” Screening

Im Peter Cundill Buch Review hatte ich ja angemerkt, dass Cundill anscheinend lange (oder immer noch ?) unter anderem mit der relativ einfachen “Magic Sixes” Formel arbeitet also Aktie bei denen:
– KBV <= 0,6 ist
– KGV <=6
– Dividendenrendite >= 6%

Auch im Internet werden die “Magic Sixes” ab und zu mal erwähnt, meistens im Zusammennhang mit Peter Cundill. Anscheinend hat er die “Formel” hauptsächlich dazu verwendet um zu schauen ob der Markt an sich billig ist, siehe hier.

Ich bin ja kein Fan von “Formula Investing”, finde es aber als Startpunkt bzw. Screening Hilfe recht nützlich. Da man das Gelesene auch immer gleich anwenden soll, habe ich einfach mal einen entsprechenden Bloomberg Screen erstellt, erstmal fokussiert auf Europa und mit dem Zusatzkriterium Market Cap > 10 Mio. um die Schrottwerte auszufiltern. Das Ergebnis anbei:

Short Name P/E P/B Dvd Yld Market Cap Mio
BNP PARIBAS 4.90 0.58 6.37 39,879.6
AXA 4.32 0.59 6.74 24,038.1
SOC GENERALE 4.44 0.38 8.33 16,425.7
NATIXIS 5.03 0.49 8.37 8,507.3
SPAREBANK 1 SR B 5.40 0.58 6.37 5,563.6
AUSTEVOLL SEAFOO 5.14 0.58 6.00 5,128.8
CIC 4.14 0.46 7.20 4,696.4
UPM-KYMMENE OYJ 5.45 0.60 6.68 4,430.8
RESOLUTION 1.52 0.47 7.45 3,630.7
FINMECCANICA SPA 3.59 0.40 8.74 2,789.0
DELTA LLOYD NV 3.41 0.43 8.57 2,031.2
CA ILE FRANCE 4.50 0.35 6.75 1,356.2
PUBLIC POWER COR 3.46 0.20 13.48 1,317.8
BANQ NATL BELGIQ 1.31 0.23 6.09 1,114.0
BANK OF CYPRUS 3.68 0.37 8.18 1,007.0
HOME RETAIL GROU 5.43 0.37 13.05 1,031.4
CA NORD DE FRANC 4.68 0.35 7.76 973.9
GRIEG SEAFOOD AS 4.72 0.50 17.09 873.2
TETRAGON FINANCI 1.30 0.54 6.25 849.7
CRCAM DU LANGUED 3.98 0.32 6.91 748.2
SPAREBANKEN OST 4.71 0.39 14.71 704.9
AUTOSTRADA TO-MI 5.39 0.53 6.97 605.0
CA ATLANTIQUE VE 4.58 0.27 6.92 482.0
CA SUD RHONE ALP 3.88 0.35 6.57 478.8
ROTTNEROS AB 4.55 0.39 6.45 464.8
BANK GREECE 2.17 0.51 9.55 397.3
CA NORMANDIE SEI 3.65 0.29 7.65 393.9
CA LOIRE-HAUTE-L 3.83 0.29 6.07 340.6
SEQUANA 5.54 0.40 6.03 332.7
CA TOURAINE POIT 4.34 0.26 6.36 320.1
ULJANIK PLOVIDBA 3.26 0.50 7.16 283.9
CA ILLE ET VILAI 3.49 0.25 7.14 278.8
CREDIT AGRICOLE 3.81 0.27 6.47 255.6
CREDIT AGR MORBI 3.50 0.28 6.85 239.4
PEKAES 3.29 0.54 17.54 182.3
STAR BULK CARRIE 3.47 0.19 13.89 116.5
NES PRESTEGJELD 5.41 0.32 6.61 108.8
LES NX CONSTRUCT 5.17 0.40 8.96 80.4
GAME GROUP PLC 4.99 0.24 28.54 80.8
NUTEX 0.79 0.00 11.11 73.5
GRUPO SOARES DA 2.78 0.33 7.23 49.7
BASHNEFTEGEO-BRD 2.82 0.49 6.21 45.7
ESTORIL SOL SGPS 4.63 0.43 8.33 40.1
TATNEFTEPROM-BRD 4.14 0.49 53.85 33.9
HF COMPANY 5.20 0.46 9.17 33.0
WOOLWORTH CYPRUS 3.85 0.18 6.21 30.9
ERMES DEPARTMENT 4.72 0.34 15.29 29.8
HELLENIC CARRIER 1.48 0.32 14.07 24.6
TSKB YATIRIM ORT 4.49 0.51 9.59 21.2
LOGICOM LTD 4.03 0.40 6.90 21.0
FAIRPOINT GROUP 5.02 0.54 9.26 20.9
MOLINS PLC 5.65 0.37 6.42 17.5
SOFT COMPUTING 4.15 0.59 8.31 10.7

Immerhin sind 53 Werte in der Liste, darunter u.a. das “Who is who” der Französischen Finanzindustrie inkl. der ganzen Credit Agricole Töchter.

Dennoch sind einige der “einschlägigen” Aktien darunter, wie Public Power, Autostrade Torino-Milano aber auch UPM und einige Norwegische Fischfarmen.

Ein paar der Werte werde ich mir wohl die nächste Zeit noch anschauen.

Auf US Aktien (also Sitz der Gesellschaft in USA) angewendet, findet er übrigens nur eine einzige Aktie (International Shipholding). Frei nach Peter Cundill würde ich sagen, dass Europa damit relativ gesehen billiger ist als USA.

To be continued.