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Cheap in Portugal

When a country is negatively in the news my ears perk up, Portugal is no exception.  I ran a quick screen for companies trading at EV/EBIT < 8 and pay a dividend, I got three.  Three isn't terrible considering there are only around 65 stocks that trade on the Euronext Lisbon.  I have a quick summary of the companies below, and will have a follow on post about one of them.

I should note Portugal is a great country to tackle if you want to take a list of stocks and start with the As and work to the Zs.  The Euronext Lisbon exchange page has enough financial information for each listed company to see if it's worth proceeding.

Two of the stocks are selling below NCAV where the working capital is greater than market cap.  All three of the companies are profitable and have nice ROEs.  Companies like these are fertile hunting grounds for deals.  For an investor who is maybe a bit wary of investing in Portugal or overseas buying equal amounts of each of these stocks will probably give good returns, along with a nice margin of safety.


Conduril Construtora Duriense S.A. 
Revenue: 380,767,966
P/E: 1.42
Market Cap/NCAV: 87%
ROE: 44.93%

COPAM - Comp. Portuguesa de Amidos, S.A.

Revenue: 38,595,795
P/E: 7.24
Market Cap/NCAV: 278%
ROE: 18.34%

Novabase SGPS SA

Revenue: 337,726,681
P/E: 7.12
Market Cap/NCAV: 83.5%
ROE: 14.02%

Here are the companies and a bit more information in Excel:

2 comments:

  1. AnonymousApril 19, 2011 at 8:58 PM

    Hi.I'm from Portugal and try to be an value investor. Regarding your list I say check Novabase which is the only from those 3 with enough trading volume,the other 2 don't have liquidity(and Novabase only recently started to pay an dividend). Also I must say that in Lisbon there are some interesting companies who have half of the revenue coming from emerging countries(specially Brazil).Those are the ones I try to analyze. Check Cimpor,EDP,Mota-Engil,Portugal Telecom,Jeronimo Martins.All these companies have English presentations on their website. Right now none of these are net-net :-(, and I think that Portugal has some bad years ahead of us(with the bailout). Happy investing!

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  2. Nate TobikApril 19, 2011 at 10:10 PM

    Thanks for the comment, I was looking into Novabase, I'm hoping to have a post about them soon. I also had Cimpor on my list to investigate further, I'll check out the others as well.

    I like your approach, looking for companies trading in Portugal which have a portion of revenue from outside the country.

    Thanks for reading my blog!

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