New Buy: Moury Construct – Undervalued stock with massive cash reserves

Today I went off the beaten path by buying some shares of Moury Construct (EBR:MOUR), a largely forgotten small cap on the Brussels stock exchange. This construction firm is 95 years old and gained a bit of popularity thanks to the recent wave of delisting attempts in Belgium (Pairi Daiza, CMB, Spadel).

Optically expensive, but massive pile of cash
Moury Construct is optically expensive, it trades around 135EUR and with earnings of 5.9EUR per share for 2014 this results in a trailing P/E of 22.88. At first sight there’s nothing special about the stock, so what’s the big deal with Moury Construct?

One of the reasons why the company is so attractive is its huge pile of cash. Moury Construct’s balance sheet is debt free and contains a massive 91EUR per share in cash reserves! To put it in other words, 2/3rds of the company’s share price is backed by cash on hand. Excluding the cash reserves, Moury Construct’s P/E is in the mid-single digits.

The company’s financials are sound too, in the first half of 2015 its net profit per share soared 15.3 percent to 4.24EUR. Moury’s backlog is at a record height of 124.5 million EUR in upcoming projects and margins are improving too.

Owned for over 60% by the Moury family
Moury Construct  is a family-owned company, just 39.43 percent of the shares are owned by the public so investors have been speculating for years on a potential delisting because this is a company that seems to have little reasons to remain on the stock market.

Buiding constructed by Moury

While it seems very safe thanks to the huge cash pile, there are some obvious cons:
– It’s a small cap, the shares trade on the fixing market and are illiquid.
– It could take long before the undervaluation is resolved, so far management seems to have no plans with the massive cash pile.
– Site and reports are only available in French, poor communication with shareholders

It’s not a dividend growth stock but I find it to be an interesting value play that pays out a nice dividend while you wait for the stock’s real value to materialize. Last year Moury Construct paid out a dividend of 4.4EUR per share, if this year is the same  amount it would mean a dividend yield of around 3.26%. The dividend is paid out once a year, in the month June.


2 thoughts on “New Buy: Moury Construct – Undervalued stock with massive cash reserves

  1. Geblin

    Hi DaC,

    Seems like a good buy to me. I did also take a quick look to the numbers last week and it does indeed seem like a good value play. I might pick up a few shares next month.




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