Hi all. I have written a blog on Kerry Group, which I am a shareholder in, that you may find of interest. Feedback very welcome and as ever please DYOR. The blog can be found here: https://tbifund.wordpress.com/2024/10/12/kerry-group-kyga-id-all-the-ingredients-for-success/ |
Wexboy - How wrong you have proven to be! |
 2016 – The Great Irish Share Valuation Project (Part I):
Company: Kerry Group (KYG:ID)
Last TGISVP Post: Here (also, see here & here)
Market Cap: EUR 14,280 M
Price: EUR 81.15
KYG’s price rally & current multiple suggests an outstanding earnings record. In fact, for many shareholders, that’s a given…I wonder if they ever check the figures!? The reality’s actually quite different, as I’ve highlighted before: While Kerry’s trading margin has steadily improved (from 9.4% in 2011, to 11.5% in 2015), it’s based on underlying revenue growth of just 3.1% pa in the last 5 years – which translates to a declining trend in adjusted EPS growth of 11.1% in 2011, an average 10.0% in 2012-2013, and an average 8.2% in 2014-2015. Somehow…that’s worth a 27 P/E?! Aahh go on, sell me another story…
Yeah, I know: Kerry has an incredible growth trajectory ahead as it migrates from Consumer to its higher margin Taste & Nutrition business, cranks up its acquisition machine, benefits from increasing economies of scale, yada yada. But that was the pitch five years ago, and also ten years ago…how much longer will investors ignore actual feedback? At this point, they’d do well closing their ears (to the story) & opening their eyes (to the actual figures).
Noting a predictable shortfall in Kerry’s operating FCF, a 1.0 P/S multiple (on €6.1 billion of revenue) is adequate for its current 11.5% trading margin. With net finance cost just under 10% of trading margin, an additional €0.7 billion debt adjustment is appropriate – which we’ll haircut by 50%, as usual. As for earnings, Kerry lacks the growth to deserve a premium multiple, but obviously has a stable/high quality business & enjoys consistently positive investor sentiment, so a 12.0 P/E is warranted:
(EUR 3.015 Adj Dil EPS * 12.0 P/E + (6,105 M Revenue * 1.0 P/S + 714 M Debt Adjustment * 50%) / 176 M Shares) / 2 = EUR 36.45
Kerry is ridiculously overvalued, a dangerous blue chip if I ever saw one…not that I’ll persuade many of its devoted fans. But the greater the multiple & blind faith it enjoys, the more it risks being felled, if/when an abrupt change in sentiment finally hits…as we saw with Aryzta. Which doesn’t mean I’d necessarily advocate KYG as a short – many of its shareholders are buy & hold types, who are pretty oblivious to price & valuation, so it might require really serious/unexpected bad news to actually provoke a crisis of confidence. Or perhaps the shares end up trading sideways for years on end, with buyers slowly drifting away…if so, and shareholders think my call on Kerry was wrong, they’re bloody welcome!
Price Target: EUR 36.45
Upside/(Downside): (55)%
For related links/graphs/files, and more TGISVP analyses/price targets: Google the Wexboy investment blog. |
Read AlphaValue's note on KERRY GROUP, out this morning, by visiting hxxps://www.research-tree.com/company/IE0004906560
"Kerry Group released its Q1 trading statement. The volumes were up +2.9% (cons +4.3%, AV expected +3.5%) with Taste & Nutrition +3.1% (cons +4.8%) and Consumer Foods +2.1% (cons +3.0%). T&N volumes by region: Americas +3.1%, EMEA +0.2%, Asia Pacific +8.7%. The reported revenue was up +0.9% (cons +3.6%) with -2.3% FX headwinds. The trading margin was up +50 bps (cons: +40 bps) with T&N +40 bps, CF +20 bps. The group maintained its FY guidance...." |
2013 The Great Irish Share Valuation Project (Part I)
I take a look at Kerry Group, plus a batch of other Irish stocks:
Cheers,
Wexboy |
Hi folks,
Just posted Part III of The Great Irish Share Valuation Project on my blog. I'm setting a Fair Value Price Target for every listed Irish company. So far I've valued almost 3 dozen companies, including Kerry Group:
I hope you'll take a look (plse don't hesitate to comment/email me), and perhaps become a regular reader.
Cheers,
Wexboy |
Davy on 2012
Stock-picking in defensive sectors will be key to outperforming market in uncertain environment
04 January 2012
Barry Dixon |
Irish market a 'challenge' - Kerry |
LBO aren't you a bit lonely on here - posting to yourself all the time? |
Pubs cut beer prices as pound slide leaves them 'high and dry'
Consumers are heading north in search of cheaper food and televisions, UK tourist numbers are sinking, and exporters such as food company Kerry Group and C&C, the maker of Bulmers cider, are suffering in their largest European market.
"It's nothing but bad news to Irish exporters," said Alan McQuaid, chief economist at Bloxham Stockbrokers in Dublin. "Sterling is a bigger negative force than in any other euro-region country. It's certainly something we could do without."
Almost 20pc of Irish exports go to Britain, where companies including Kerry, DCC and Greencore, which supplies more than 100 million ready meals to the UK, are being hit on their sales or the translation of profit back into euros. |
AIB: Pound, dollar fall to hurt exports |
http://www.irishtimes.com/newspaper/finance/2009/0911/1224254270157.html
Kerry Group also continued on its upwards trajectory. After tentatively breaking through the 20 mark in recent days, the food group is now being picked up on investors' radars, which is adding to the positive momentum surrounding the stock, according to brokers.
It closed at 21 yesterday, a gain of 5 per cent, or 1 |
Irish tap water being sold as bottled
The FSAI has discovered that three companies are effectively selling tap water taken from the public water supply |
THE Competition Authority has confirmed that retailers are pressuring suppliers including the top Irish food firms for better deals. |
Thousands of food industry jobs at risk |
Our food suppliers need protection from big retailers |
 Fear for thousands of jobs on Tesco leak
Thursday, 23rd April 2009
Thousands of jobs in Irish food companies are at risk if a leaked memo from supermarket giant Tesco which considers a switch from Irish to UK suppliers.
Fine Gael Labour Affairs Spokesman Damien English TD has expressed grave concern that a leaked document from Tesco indicates that the retail giant may be considering substituting Irish brands with product sourced in the UK, with potentially massive job losses in Ireland.
Cross-border shopping is damaging Tesco's brand in the Republic of Ireland, according to an internal memo obtained by a grocery trade journal.
Tesco is being forced to cut prices in the Republic, and the supermarket giant is concerned that like-for-like sales are "well below expectations".
Retail Intelligence reported goods such as household products and beauty items were particularly affected.
On Tuesday, Tesco posted the highest profits on record for a UK retailer.
"I believe if this move goes ahead we could be looking at Dell a month of job losses in the Irish food sector. The decision by Tesco to source product from the UK will permanently alter the nature of the supply chain for grocery items in Ireland. Suppliers are already under severe pressure from the aggressive pricing strategies of the major retailers. This move could push many suppliers over the edge," said Damien English. |
Kerry Group's Stan McCarthy saw his pay package soar 48pc last year to 1.52m as he stepped up into the role of chief executive of the food giant. |
Kerry Group was hit by the ban on Irish pork products announced at the weekend, and it lost 80 cent, or 4.8 per cent, to close down at 15.90 |
why any one wants to buy this i dont know for 1 year its traded in a band no more than many spreads 18p-22p hardly the most exciting share.
PASS |
whoops, got that one wrong O Toole. |
16e next stop |
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