that fell man-Stock (WKN: 577220) has not been successful in the past few weeks and months. The share certificate even fell from EUR 57.80 at the beginning of the year to EUR 32.96 at the end of September. A minus of almost 43% shows that the optician chain’s allegedly defensive class is not in impressive top form.
However, I am happy to turn the tables: I see the Fielmann share as a one-off opportunity at the moment, for which we had to wait a long time. Let’s dive deeper into fundamental valuation and what makes the stock so exciting. At the end of the day, I still see consumer products that are at least not so cyclical that consumers have the luxury of not having them.
Fielmann share: the business model at a glance!
The Fielmann share is about glasses and other visual aids such as contact lists. The relatively young management around CEO Marc Fielmann is currently embarking on a digitization offensive, i.a. But the focus is also on regional expansion and conquering new markets in Europe. In addition to visual aids, there are also hearing aids and acoustic solutions as side jobs. Both constitute one thing: the “luxury” of leaving one’s own senses razor sharp.
Consumers may postpone the purchase of glasses for a few years. Just like now, in times of inflation and rising costs of living. However, if vision continues to deteriorate, consumers are likely to buy again out of necessity. To me, this is the foundation of constant, timeless sales. After all, behind Fielmann stands the leading optician chain in the DACH region, which is constantly expanding in Europe.
The market is currently looking at Fielmann stock in the short term. The fact that there should be no growth in 2022, but at best stagnation in earnings, led to the sale. As a result, the broader market does not see the value proposition behind the stock. With a yield of 4.5%, a price-to-cash-flow ratio of 8 based on 2021 numbers, and a price-to-earnings ratio of 19.5 based on 2021 numbers, the valuation is quite cheap. For a family business operating in what is effectively a defensive market, this is a pretty good opportunity.
The valuation of the Fielmann stock is quite interesting. Foolish investors should ask themselves how stable the business model is. From a long-term perspective, I sense the chance of the market exaggerating in the short term rather than serious existential problems. Or cyclical issues that are not priced in.
Ultimately, it’s your decision. But when was the last time we saw Fielmann stock with a 4.5% dividend? At least I can’t remember that.
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Vincent owns shares in Fielmann. The Motley Fool does not own any of the stocks listed.