ERG SA (ERG) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

ERG SA

KGL SA

Why is ERG SA ?

Poor Management Efficiency with a low ROCE of 2.51%

The company has been able to generate a Return on Capital Employed (avg) of 2.51% signifying low profitability per unit of total capital (equity and debt)

Low ability to service debt as the company has a high Debt to EBITDA ratio of 0.83 times

Poor long term growth as Net Sales has grown by an annual rate of -1.96% and Operating profit at 2.66% over the last 5 years
Low ability to service debt as the company has a high Debt to EBITDA ratio of 0.83 times
The company has been able to generate a Return on Equity (avg) of 4.95% signifying low profitability per unit of shareholders funds

Poor long term growth as Net Sales has grown by an annual rate of -1.96% and Operating profit at 2.66% over the last 5 years

With a growth in Net Profit of 5183.33%, the company declared Outstanding results in Jun 26

The company has declared positive results for the last 2 consecutive quarters
OPERATING CASH FLOW(Y) Highest at PLN 4.81 MM
ROCE(HY) Highest at 2.61%
DEBT-EQUITY RATIO (HY) Lowest at 6.67 %

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to ERG SA should be less than 10%
Overall Portfolio exposure to Packaging should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Packaging)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is ERG SA for you?

Medium Risk, Low Return

Absolute

Risk Adjusted

Volatility

ERG SA

3.18%

-0.38

33.64%

Poland WIG

43.29%

2.67

16.21%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

-1.96%

EBIT Growth (5y)

2.66%

EBIT to Interest (avg)

0.34

Debt to EBITDA (avg)

1.71

Net Debt to Equity (avg)

0.14

Sales to Capital Employed (avg)

1.67

Tax Ratio

Tax Ratio is Negative%

Dividend Payout Ratio

Pledged Shares

Institutional Holding

ROCE (avg)

2.51%

ROE (avg)

4.95%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

0.90

EV to EBIT

-39.32

EV to EBITDA

9.22

EV to Capital Employed

0.91

EV to Sales

0.55

PEG Ratio

0.27

Dividend Yield

ROCE (Latest)

-0.38%

ROE (Latest)

1.50%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

RSI

No Signal

Bollinger Bands

Bearish

Moving Averages

Bearish (Daily)

KST

Bearish

Dow Theory

No Trend

OBV

No Trend

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

29What is working for the Company

OPERATING CASH FLOW(Y)

Highest at PLN 4.81 MM

ROCE(HY)

Highest at 2.61%

DEBT-EQUITY RATIO (HY)

Lowest at 6.67 %

NET SALES(Q)

Highest at PLN 30.43 MM

OPERATING PROFIT(Q)

Highest at PLN 2.87 MM

PRE-TAX PROFIT(Q)

Highest at PLN 1.52 MM

NET PROFIT(Q)

Highest at PLN 1.58 MM

EPS(Q)

Highest at PLN 2.18

-2What is not working for the Company

RAW MATERIAL COST(Y)

Grown by 7.6% (YoY

DEBTORS TURNOVER RATIO(HY)

Lowest at 4.91 times

Here's what is working for ERG SA

Pre-Tax Profit

At PLN 1.52 MM has Grown at 929.05%

over average net sales of the previous four periods of PLN 0.15 MM

MOJO Watch

Near term Pre-Tax Profit trend is very positive

Pre-Tax Profit (PLN MM)

Net Profit

At PLN 1.58 MM has Grown at 941.05%

over average net sales of the previous four periods of PLN 0.15 MM

MOJO Watch

Near term Net Profit trend is very positive

Net Profit (PLN MM)

Operating Cash Flow

Highest at PLN 4.81 MM and Grown

In each year in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (PLN MM)

Net Sales

At PLN 30.43 MM has Grown at 69.66%

over average net sales of the previous four periods of PLN 17.93 MM

MOJO Watch

Near term sales trend is very positive

Net Sales (PLN MM)

Debt-Equity Ratio

Lowest at 6.67 % and Grown

In each half year in the last five Semi-Annual periods

MOJO Watch

The company has been reducing its borrowing as compared to equity capital

Debt-Equity Ratio

Net Sales

Highest at PLN 30.43 MM

in the last five periods

MOJO Watch

Near term sales trend is positive

Net Sales (PLN MM)

Operating Profit

Highest at PLN 2.87 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is positive

Operating Profit (PLN MM)

Pre-Tax Profit

Highest at PLN 1.52 MM

in the last five periods

MOJO Watch

Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (PLN MM)

Net Profit

Highest at PLN 1.58 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is positive

Net Profit (PLN MM)

EPS

Highest at PLN 2.18

in the last five periods

MOJO Watch

Increasing profitability; company has created higher earnings for shareholders

EPS (PLN)

Here's what is not working for ERG SA

Debtors Turnover Ratio

Lowest at 4.91 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling Debtors has slowed

Debtors Turnover Ratio

Raw Material Cost

Grown by 7.6% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has deteriorated; this may lead to a fall in profit margin

Raw Material Cost as a percentage of Sales

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