Jumbo SA (JUMSF, JUMSY) is a Greek retailer focusing on toys and other products. Sales and earnings growth have been fantastic, and the stock is reasonably priced.
Jumbo has 136 million shares and trades at a market cap of €1.6 billion ($1.77 billion). It takes $1.11 to buy one euro. Earnings per share were €0.7705 and the price-to-earnings ratio is 15.5. The dividend was €0.18, and the dividend yield 1.53%. These numbers are based on last year’s fiscal end which was June 30, 2015.
The company earned €583 million ($647 million) in sales in 2015, up 7.5% over 2014. EBITDA was a whopping €159 million ($176 million). That’s an EBITDA margin of 27%! Return on equity is a respectable 13.6%. Bloomberg has a sales estimate of €631.4 million ($700 million) in fiscal year 2016 and an EPS estimate of €0.856. Great growth! First half profit rose 15.7%.
The balance sheet is solid with €300 million ($333 million) in cash and €15 million ($15.5 million) in accounts receivable. This is to only €51.4 million ($57 million) in accounts payable and €147 million ($163 million) in debt. Free cash flow was €70 million ($77 million) so the free cash flow yield was 4.8%.
Jumbo has 40% of the toy market in Greece. The company has a presence in Greece (55 stores), Cyprus (five), Bulgaria (eight) and Romania (six); 45% of sales are baby products, and the rest are seasonal and home products.
People were up in arms about a commercial Jumbo put out right before the Greek Easter (Greeks celebrate Easter on a different date than most other Christians). Something about “hit like a man” offended people, and they had to take it off the air. It sounds like they’re very sensitive in Greece. To be quite honest, there is not a lot of information out there on the company. Looking at Google News and Bloomberg doesn’t turn up a whole lot of information.
Tanosirian SA owns 26.72% of shares which Jumbo will absorb through a merger. Fidelity Low Priced Stock Fund owns 8.19%. I found out about Jumbo by looking at First Eagle’s holdings.
Needless to say, the Greek economy is in no great shape. The EU recently agreed to take Greek government bonds as collateral for EU loans. Many reforms have been put in place, but the economy still did poorly in 2015. The U.S. is all for debt restructuring.
So is Jumbo a buy? I don’t know. Based purely upon numbers it is. I’ve never been in Greece and never been in a Jumbo store so I’m leery. The company seems to chug along despite the economy. The ADR is up from $8 last year and reached $14, before coming back down into the $11 range. I’m going to follow Jumbo. The time to invest in a retailer is in its growth phase. The only way to get outstanding growth in a retailer is when the company is expanding into new stores. Jumbo is definitely doing this.
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