Wednesday, February 19, 2014

Eckert & Ziegler AG

This is a post on Eckert & Ziegler AG.

The share price over the last one year looks like this



Here is a link to a recent analyst report hosted on their site.

http://www.ezag.com/fileadmin/ezag/user-uploads/pdf/analyses-englisch/Hauck_und_Aufhaeuser_2014-01-29_update.pdf

My take on this is that the share is worth actually around Euro 20.87 - Euro 34.85, averaging to a price of Euro 27.86.

At the time of writing, it is trading at 24.85.

So, in that sense, if all goes well, one can expect a 33% appreciation to Euro 34.85.

However, all is not going well

A recent press release which caused the sharp drop

http://www.reuters.com/finance/stocks/EUZG.F/key-developments/article/2911781

The catalyst for a re-rating is a rebound in orders, can come as soon as next quarter if they snag a big order.

My advice would be to monitor the drop and start nibbling if it hits 20.87.

Why 20.87 ?

Two reasons, one it hit that price in 2012 and second is that is my base case worst scenario pricing,so, at that price it is priced for worst case scenario, so, very high margin of safety.

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