Essanelle Hair Group AG (EHX.F) was founded in 1914 and operates franchised hair salons in Germany with its brands ESSANELLE Friseur, SuperCut, HairExpress, as well as its Beauty Hair Shop points of sale. The company also sells products in its hair salons and specialty stores. As of December 31, 2011, the group owns and operates 686 salons and points of sale in department stores and shopping centers. The company is based in Düsseldorf and has 4,000 employees who serve 7 million customers annually.
With just over two percent market share in Germany, Essanelle Hair Group is the largest company in the industry and the only one that is publicly traded. The company's different brands vary in terms of prices, services offered and salon locations. The goal is to cater to a specific audience. According to Essanelle, this constitutes a significant competitive advantage over independent salons.
The company's average return is particularly generous, at 7.03%. Despite this, the distribution ratio remains correct, with 56.4%. The price/earnings ratio confirms this attractive valuation, with 10.6 and the price on net assets goes in the same direction, with 1.25.
The company can boast an average return on equity of 12.12%, a liquidity ratio of 1.59 and a debt to capital ratio of 0.12. The stock displays quite affordable volatility, with a relative standard deviation of 11% and a beta of 0.38, indicating that EHX.F is not very sensitive to market fluctuations.
Essanelle Hair Group is a company like I like them. : a simple, durable product that is not very popular in financial circles. The company is solid and has a substantial margin for growth. And then a little Germanic rigor in a portfolio can't hurt... So I'm considering buying EHX.F soon.
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Hi Jerome. Have you studied the company's balance sheet? Why EHX.F and not EHX.DE?
Hi Lopazz You could also buy it in Dusseldorf, Munich, Stuttgart, Hamburg, Berlin, it doesn't matter... I'm not focusing on that. Regarding the balance sheet I'm focusing on the indicators listed in the article. I'm not an accountant and I prefer to target the numbers that speak to me.
Hi Jerome. This value is a discovery for me. Apparently, they are also active in life insurance but after looking at their annual report, I see that this activity is not consolidated: it must therefore be managed in the form of a fund (?). The dividend and the distribution ratio are very attractive. The only downside (in my opinion): the free float is only 10%, the rest is owned by the Saxonia holding company. Surely a family holding company. I have nothing against the fact that a family or a group of investors owns a company, on the contrary. Only in the current state, it is very easy for the holding company to completely buy back the 10% on the market, to the detriment of the small investor who would have for example bought at a price higher than the repurchase price. This happens from time to time, we should not exclude this possibility.
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Thanks for the clarification birdienumnum. It is indeed a risk, personally I can live with it.
I have a question about this title, I have been following the EHX:GR rating for a few days, and I have the impression that it is not continuous rating but fixing... is that right?
It could be fixing but I think it's because the volumes are low. In Frankfurt it's a bit more liquid.
It's a small box. The advantage is that the title is not very sensitive to speculation, the advantage is that you have to be careful to place limit orders for buying and selling.
Good evening,
I just looked at the number of shares traded today and the least we can say is that it is a very illiquid stock. It is better to buy it from a broker with low transaction fees in Frankfurt.
See you soon.
NB: I discovered your blog and I think it's great.
Hello Patrick
Thank you for your compliment 😉
Yes, this is the problem with small companies like Essannelle, or others from my second strategy like JFN or PAXN. But the game is worth the candle because these types of securities are little monitored, not very volatile, not very sensitive to the market and often undervalued. The trick is to be able to buy it at the desired price, and for that you have to put a fairly low limit order, if possible when the market mood is oriented towards selling (even if I just said that these securities are not very sensitive to it!). I did it last summer, and it feels a bit like going on a miraculous fishing trip. Sometimes you get the desired quantity of securities at the desired price, and sometimes if you are too greedy, the desired price is there, but only with a part of the desired quantity. For that, it is indeed better if the transaction fees are low.
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