7 Portugese Stocks, that may be worth looking at

2012-07-16 06:10 -  , Value Investing


I focused on german stocks for a long time. But as I am more and more at the point, where I looked at almost everything, that could be interesting, I have to expand my circle of competence.

What seems more rewarding, than searching in some depressed countries in southern europe? Portugal is one of them. So I looked on Bloomberg and worked through the list of portugese stocks.
Not a lot of work, there are just over 60 portugese stocks.

I read the company description, checked the earnings and visited the company website to find out, if there is an english annual report.

I excluded everything that seemed not easy to understand. So no banks and other complicated businesses (although it must be noted, that it is highly subjective, which business is complicated and which not).
Everything with continous losses was also excluded, I am no turnaround investor.

So here is, what made it through my filter. These companies could be worth looking closer at. I don’t know if they are cheap and I don’t know if they are good businesses. But I think chances are high, that I’m able to come to a sensible judgement about these companies. I will certainly have a closer look at some of them later.

Brisa Auto-Estradas de Portugal

market cap: 1500 Mio. €

Operates motorways mainly in portugal. Furthermore active in India, Netherlands and Northern Europe. An electronic toll payment system is one of its products.

Brisa could be a stable company due to high barriers to entry and constant revenues (at least I think that could be the case, needs further examination).

A first look at the balance sheet shows mainly intangibles in the form of rights. Financed by a huge load of debt. I don’t like that at first glance, but could be ok, if revenues are stable.

Earnings statement is highly influenced by investment results. One other point to look clother at.

Portugal Telecom

market cap: 3200 Mio. €

Is active in the field of…well, the name says it.
Dividend yield seems to be good. P/B a bit below 1. P/E 2011 is about 10. The earnings 2010 were highly influenced by one-time income.

Corticeira Amorim

market cap: 180 Mio. €

Amorim is a world leading cork producer. Little Debt on the balance sheet. Earnings seem a bit unstable, but at least positive in the last few years.

Trades at 7 times earnings of 2011, but there were years with much lower earnings in the near past.

You can find a good analysis of Amorim at neatvalue.com.


market cap: 80 Mio. €

Operates restaurants in Portugal and some in Spain. Trades at about 5 times earnings of the last years, but earnings where more than cut in half in 2011.

Jerónimo Martins

market cap: 8500 Mio. €

Holds a portfolio of businesses operating in the food sector in portugal and poland.
Looks not cheap at all at first glance (P/E above 20). Another negative point: too big. There are certainly dozens or hundreds of other people digging through the annual report. But it seems to be a successful company with high returns on assets. So maybe still interesting.


market cap: 850 Mio. €

A retail company with operations in food, sport goods, apparel, consumer electronics and appliances.
Traded at lower than P/B 0.5, P/E 2011: about 8, earnings 2010 were much higher.

Toyota Caetano Portugal

market cap: 60 Mio. €

Is an importer and distributor of Toyota cars. Also builds cars (Toyota commercial Vehicles and some others).
Traded at about half book value and six times earnings 2010. 2011 produced losses due to dramatically declining revenues. But costs declined impressively fast also, so the loss was not that big.


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