Hello Graham Value Team,
Why is The Swatch Group (0QM4.L) considered a 333% net-net? According to the financial statements of Fiscal Year:
2022-12-31 that were used, the NCAV is about 8B CHF versus a market cap of about 13B CHF? Is there a bug in your calculation?
With kind regards,
Untje
Stocks Discussed:
Submitted by untje. Created on Thursday 17th August 2023. Updated on Thursday 17th August 2023.
Discrepancy on Google
Dear untje,
Thank you for your forum post!
GrahamValue follows the standard formula for NCAV, and the calculation is automated and so unlikely to be wrong. The problem is usually with the values used for the calculation.
The standard formula for Market Capitalization (Current Share Price * Total Number of Shares Outstanding) would yield a figure of approximately 2.5B CHF (49.15 * 51.84M) for Swatch Group AG (0QM4.L).
But while Google shows similar numbers for Current Price and Shares Outstanding (47.55 * 51.84M), it shows a Market Cap of 12.80B CHF.
Google thus appears to be contradicting its own values, as per the standard formula shown by Investopedia. It's this value of 12.80B CHF shown on Google that requires further investigation.
GrahamValue does not display a Market Cap value anyway, and the values shown are in agreement with standard formulas.
Update
Such a discrepancy is usually caused by Preferred Stock, but that does not seem to be the case here as indicated by MarketWatch, Barron's or the Wall Street Journal.
Any Preferred Stock would have been accounted for in the NCAV calculation as well.
Thank you again for your forum post!
No idea where the 51.84M
Thank you! No idea where the 51.84M shares comes from. There are registered and bearer shares, two separate stocks. Both market caps need to be added together:
SWATCH GROUP I (bearer shares)
251,70 CHF * 29M shares = 7,3B CHF
SWATCH GROUP N (registered shares)
49,15 CHF * 115M share = 5,7B CHF
Total market cap of common stock is about 13B CHF
So not a net-net if I'm not mistaken.
Two Listings
Dear untje,
Thank you for your comment!
There are a total of 21 listings for Swatch on GrahamValue. There appear to be two listings for Swatch on the LSE - Swatch Group AG (0QM4.L) and Swatch Group AG (0QJV.L).
Both of them have the same value for Shares Outstanding (51.84M), and so does Google Finance as mentioned above. But the second LSE listing has a stock price which yields a Market Capitalization close to to the 12.80B CHF shown on Google.
This pattern appears to repeat itself in the Swiss listings of Swatch as well - with Swatch Group AG (UHR.SW) and Swatch Group AG (UHRN.SW).
Also, Google too appears to be contradicting its own values as explained above. So it's hard to say what's going with this stock.
A Seeking Alpha article appears to indicate that the UHR shares are the bearer shares while the UHRN shares are the registered shares. So perhaps the two are being accounted for and traded as two separate stock listings, with an actual total Market Cap closer to 15B CHF.
Thank you again for your comment!