KSB is a leading producer of pumps & valves. It was founded in 1871 in Germany, sells & services globally, p/e of 7.4 and has a highly valued Indian subsidiary.
On the surface co seems cheap, but has been the case forever. Why is Gross margins so high while EBITDA margins so low comparing to peers? Is there a leakeage to related parties? Co is not generous with the minority holders, just paying out some token dividends. Revenues has been around the same levels forever along with margins.. Something just not right about this company.. My two cents.
My explanation around high gross margins & low EBITDA margins was that KSB is more focused on custom solutions. These by their nature are more labor intensive than standardized products. Have not compared them too in-depth vs peers. With which peers would you compare it?
Stock is up more than 200% since covid low and pays a 4% dividend. Historically company might have been run more in the benefit of employees, but those times seem to be behind it. Like the stronger focus on service. Could be wrong off course.
Good H1 results for KSB: Orders with 1.6B are higher than sales at 1.4B. Strongest growth in the most profitable segment (KSB Superserv). 3.7% revenue growth with stable margins. Net income down 4M euros due to non-recurring insurance benefit of 10M in H1 2023.
Thats for sharing. I have one question. At the end you mention that KSB is a "a decent sized position" for you. I dont want to be super specific but can you possibly do tell what % you (roughly) attribute as decent sized for your risk managment ?
Thanks for questioning. Not sure how much I want to disclose sometimes. It is also always changing & potential new inflows can change my position sizing. It's now 5.2% of my portfolio. 6th or 7th position in the portfolio currently.
On the surface co seems cheap, but has been the case forever. Why is Gross margins so high while EBITDA margins so low comparing to peers? Is there a leakeage to related parties? Co is not generous with the minority holders, just paying out some token dividends. Revenues has been around the same levels forever along with margins.. Something just not right about this company.. My two cents.
Interesting.
My explanation around high gross margins & low EBITDA margins was that KSB is more focused on custom solutions. These by their nature are more labor intensive than standardized products. Have not compared them too in-depth vs peers. With which peers would you compare it?
Stock is up more than 200% since covid low and pays a 4% dividend. Historically company might have been run more in the benefit of employees, but those times seem to be behind it. Like the stronger focus on service. Could be wrong off course.
It was more run for family I believe to remember, and thus obviously warrants lower valuation because some doubts remain
True. Good thing is these doubts can dissappear with a couple years of consistent performance.
A small correction - India's currency is the Rupee (Indian Rupee or INR)
Good H1 results for KSB: Orders with 1.6B are higher than sales at 1.4B. Strongest growth in the most profitable segment (KSB Superserv). 3.7% revenue growth with stable margins. Net income down 4M euros due to non-recurring insurance benefit of 10M in H1 2023.
https://www.ksb.com/resource/blob/2017816/1e855b55d24617cb9a3dc2f42698ceb0/dow-earnings-call-06-2024-data.pdf
interesting stock
Thats for sharing. I have one question. At the end you mention that KSB is a "a decent sized position" for you. I dont want to be super specific but can you possibly do tell what % you (roughly) attribute as decent sized for your risk managment ?
Thanks for questioning. Not sure how much I want to disclose sometimes. It is also always changing & potential new inflows can change my position sizing. It's now 5.2% of my portfolio. 6th or 7th position in the portfolio currently.