VIE: MAN – Josef Manner Stock Analysis – Illiquid!

Josef Manner stock has one of the most stable charts I have even seen when it comes to the stock market.

Josef Manner stock price chart
Josef Manner stock price chart

Unfortunately, the volume is really low and with just a few trades in a month it would be hard to build up a position anyways.

Josef Manner stock liquidity – less than 7,500 shares traded in 2019 - Source: Annual Report 2019
Josef Manner stock liquidity – less than 7,500 shares traded in 2019 – Source: Annual Report 2019

The reason for the low liquidity is the ownership structure where the unions control the company (88.41% of the stocks). 11.59% is owned by another Austrian company and just a handful of small shareholders. So, really hard to accumulate.

However, I got intrigued by the stock chart, so I’ll take a look at the stock and give an overview of the situation. Who knows, perhaps you will wish to slowly accumulate this and hold forever? Also, low liquidity stocks can sometimes trade at large discounts to intrinsic value. Let’s take a look at the business, fundamentals and investment thesis.

Josef Manner business overview

Josef Manner & Comp AG is an Austrian conglomerate founded in 1890. It produces a wide assortment of confectionery products including wafers, long-life confectionery, chocolate-based confectionery, sweets, cocoa and a variety of seasonal products.

Josef Manner products
Josef Manner products

Most of the products are sold in Austria and the EU.

Revenue distribution – Source: Annual Report 2019
Revenue distribution – Source: Annual Report 2019
The Manner brand
The Manner brand

We could compare this to Buffett’s See’s Candy, his beloved sweets company that gave excellent returns on capital thanks to the pricing power of his brand.

Josef Manner stock fundamentals

A first look at the fundamentals shows how the company is a slow growth company, paying a dividend and making approximately 5 million EUR per year.

Josef Manner stock fundamentals – Source: Josef Manner Stock Quote Morningstar
Josef Manner stock fundamentals – Source: Josef Manner Stock Quote Morningstar

Their free cash flow in 2019 was much higher than net income at reached 9.75 million EUR. As EBITDA reached 16 million EUR in 2019, and I have seen such companies taken over at EBITDA ratios of 12 I would say that with the current stock market capitalization of 206 million EUR the stock is fully priced from all perspectives.

Josef Manner stock investing conclusion

Despite the ok cash flows, the dividends are really small and don’t really justify an investment. So, I would quickly conclude that Josef Manner stock is controlled by the unions, both the business and the stock price. Perhaps there could be an acquisition ahead that could push the stock higher, but that is unlikely if the above control is correct. Katjes acquired 5% of the company in 2017.

So, there is no discount due to liquidity, the stock price is controlled and this is not really an investment to follow.

However, I have enjoyed looking at this as this is what I do, look at companies and look for attractive investment opportunities. You can check my Austrian stock list where I make an investment analysis on all the stocks listed in Austria with the goal of finding a few good businesses that I can follow over the years and hopefully find some low risk high reward investment opportunities from time to time. Companies that will likely be better investments that Josef Manner stock are At&s Austria stock due to its exposure to 5G, Frauenthal Holding AG and Lenzing AG as cyclical stocks to watch. Another Austrian stock that offers high potential is Kapsch TrafficCom stock that is also in a downturn now, but can have good upsides.

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