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Natuzzi SpA Message Board

  • lloyd_barclay lloyd_barclay Oct 15, 2005 6:26 PM Flag

    $18 is reasonable value.

    Natuzzi (NTZ) is a logical choice for contrarian and value investors. I calculate its value to be roughly $18.

    NTZ is less than 50% of the average of its high and low over the last 10 years. In 1997, it reached a high of about $28 and in 1993 hit a low of about $8. If this average price is a reasonable approximation of fair value, it has 100% on the upside.

    The upside potential is supported by its value.
    At $8, NTZ is trading at a price/book ratio of 0.78, compared to an average of 2.93 in the Home-Furnishings-and-Fixtures Industry. Its price/sales ratio is 0.53. A price/earnings ratio is not currently available from Yahoo! But using the average net profit margin of the industry of 4.3% to caluculate price/earnings, produces a p/e of 11.3. This compares favorably with the industry average of 18.5.

    Granted it is likely to take a few years to get to $18. But if it takes 3 years to double, that works out to an annualized compound rate of return of 26%. If it takes 5 years, it still works out to 15%.

    To view a portfolio of well-researched value-contrarian stocks, please visit my contrarian website at:

    Lloyd Barclay

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