International Value Investing: Crown Van Gelder (CVG:NA) – Netherlands

by Geoff Gannon

A Dutch individual investor who read my post asking for stock ideas from other countries, posted a write-up on Crown Van Gelder over at GuruFocus.

Crown Van Gelder (CVG:NA) – Reports

Investment thesis 
The equity of CVG is available at a discount to its value in liquidation. 

The opportunity exists because 

  • Earnings are depressed due to rising pulp prices. 
  • The company is managed with many interests in mind; just one of which is the interest of shareholders. 
  • This is perceived to be a commodity business with no opportunity for differentiation. 

Valuation of Assets and liabilities (numbers in EUR) 

  • Current assets (mostly inventory at cost and receivables) => 50m
  • PP&E (two paper mills, a modern gas fired power plant and a harbour) => 65m 
  • Total liabilities => 30m 
  • A 50% stake in IFO BV. A logistics company that pays a 1m dividend. 

Market cap is 30m so the facility, with a book value of 65m, is available for say....15m net. This is one of the cheapest publicly traded companies in the Netherlands…

...CVG managed about 5% net margin over the past decade (excluding 2009 and 2010). The huge losses in recent years were mainly write downs of the assets; CVG is not bleeding cash….3% net margin over a full cycle => 5m.

The author also gave me the name of another interesting Dutch stock: DOCdata.

DOCdata (DOCD:NA) – Reports

By the way, I realized in my response to Pierre’s question about finding foreign microcaps, I kind of skirted the issue of finding small stocks in countries where you don’t speak the language. Instead, I just gave a list of interesting stocks from the U.K.

To prove even Americans can find small stocks in France, here are two French micro caps worth looking at: Poujoulat and Precia.

Poujoulat (ALPJT: FP) – Reports

Precia (PREC:FP)

Talk to Geoff About International Value Investing