French Value Investing: Compagnie Industrielle et Financiere d'Entreprises206 views 2011-01-09 00:41 Tags: style about color
In response to my post asking for stock ideas from other countries, Pierre sent in an idea about a French stock. The stock is called “Compagnie Industrielle et Financiere d'Entreprises” or CIFE for short.
I’m a small individual investor in France. Here is an example of an interesting stock listed on NYSE Euronext/Paris. The company is involved mainly in construction (bridges, public works, etc.). Financial Statements are published only in French, on the French equivalent of the Edgar system. The company website and annual reports are in French.
However condensed financial statements can be found in English on MSN Money with the quote FR:INFE.
With a last quote of 59.49 euros, market cap is 70 (million) euros. If you have a look at the balance sheet cash and short term investments 48 Me there is also long term investments 37 Me (those are actually excess cash that was invested in certificates of deposit) long term debt is around 2 Me short term debt is around 11 Me. So basically the company is valued for its net cash. As you can see in the MSN link the company is profitable (has been for 11 years, my records don't go before that, distributes a dividend, buys back some shares but not each year) 2009 PE ratio is 7. FCF is less good (mean value is ~ 8 Me for the last 6 years, but fluctuates and negative in 2005).
Only 30 % of the stock is public, the rest is owned by the current CEO and his family.
The stock has been moving sideways for a long, long time (MSN, Bloomberg).
Given the sorry state of the French government finances, obviously some major public infrastructure projects will be cancelled.
So here are my questions. I wonder what's your view on this.
Is it a fantastic opportunity or a trap and why?