First buy this year: BASF

Hello everyone

As the year just started and markets are quite depressed, I saw once again a quite undervalued stock. I bought 25 shares BASF @ EUR64,48 a piece. This German company is the largest multinational chemical producer in the world. Roughly 20% of their revenues comes from oil & gas production which is why they have had quite a nosedive the last couple of months. They produce more than 8,000 different chemicals and have a market capitalisation of 65 billion dollar.

Each stock pays a nice EUR 2,89 dividend, so after the double taxes I am left with EUR 1,59. This still has a 2,45% div yield after taxes. The current PE for the stock is a little under 13. I plan to hold this stock for a very long time.

Schermafbeelding 2016-01-09 om 21.32.35.png

As you see, sales should decrease a bit due to the low oil price. Nonetheless the EPS still stand strong and the oil isn’t taking a very big chunk in the company’s revenues so I don’t foresee big problems. The current ROE is 16% and the cashflow/sales is 11,5%.

I still have a small amount left in the war chest, but as I think the markets will be quite volatile this year and I already purchased for a big amount last weeks, I will wait to start new positions and strenghten old ones if they go down by a certain percentage.

 

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