Danieli & C. Officine Meccaniche SpA – Value Analysis (MILAN:DAN) : October 6, 2017

Capitalcube gives Danieli & C. Officine Meccaniche SpA a score of 8.

Our analysis is based on comparing Danieli & C. Officine Meccaniche SpA with the following peers – Siemens AG, ANDRITZ AG, Biesse S.p.A. and Mincon Group Plc (SIE-IT, ANDR-AT, BSS-IT and MIO-IE).

Investment Outlook

Danieli & C. Officine Meccaniche SpA has a fundamental score of 8 and has a relative valuation of UNDERVALUED.

Fundamental Score

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Company Overview

  • Compared to peers, relative underperformance last month is down from a median performance last year.
  • It trades at a lower Price/Book multiple (0.50) than its peer median (2.33).
  • The market expects DAN-IT‘s earnings to grow at about the same rate as its chosen peers and also does not seem to expect much improvement in its below peer median returns.
  • DAN-IT‘s relatively low net margins and poor asset turns suggest a problematic operating strategy.
  • Compared with its chosen peers, the company’s annual revenues and earnings change at a slower rate, implying a lack of strategic focus and/or lack of execution success.
  • DAN-IT‘s return on assets currently and over the past five years has trailed the peer median and suggests the company might be operationally challenged relative to its peers.
  • The company’s relatively low gross and pre-tax margins suggest a non-differentiated product portfolio and not much control on operating costs relative to peers.
  • While DAN-IT‘s revenues growth has been below the peer median in the last few years, the market still gives the stock a P/E ratio that is around peer median and seems to see the company as a long-term strategic bet.

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Leverage & Liquidity

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Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Siemens AG 26.76 1.3 7.77 28.02
ANDRITZ AG 20.32 1.31 10.39 49.46
Biesse S.p.A. 5.56 1.14 30.64 138.28
Mincon Group Plc 0.7 6.43 80.66 596.65
Danieli & C. Officine Meccaniche S.p.A. N/A 1.33 4.02 32.06
Peer Median 12.94 1.31 10.39 49.46
Best In Class 0.7 6.43 80.66 596.65

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Company Profile

Danieli & C. Officine Meccaniche SpA engages in the production and installation of innovative machinery and plant worldwide for the iron and steel industry and for the non-ferrous metals sector. It operates through the following business segments: Steel Making and Plant Making. The Steel Making segment comprises the production and sale of special steels. The Plant Making segment concerns the production and sale of plant for the iron and steel industry. The company was founded by Mario Danieli and Timo Danieli in 1914 and is headquartered in Buttrio, Italy.

Disclaimer

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