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Now Could Be The Right Time To Buy Grifols With Worries Over Trade With China

Apr. 10, 2018 2:14 PM ETGrifols, S.A. (GRFS)
Holmes Osborne profile picture
Holmes Osborne


  • Sales and earnings growth have been tremendous.
  • Profit margins were over 15% last year.
  • The annual report was just released.
  • The stock may be down on worries with China trade.

Plasma biotech Grifols (NASDAQ:NASDAQ:GRFS) just released its annual report and has put up record sales. The Spanish-based company is the second largest producer of plasma in the world. Revenues and earnings growth have been tremendous. It appears the stock may be down because of trade worries with China.

There are 684.2 million shares, the stock price is €22.77, and the market cap is €15.5 billion ($19.1 billion). Earnings per share were €0.97 and the price to earnings ratio was 23.5. The dividend was €0.32 and the dividend yield is 1.4%. There are two classes of stock, which is annoying. The A share receives 100% of the vote and is 36.4% owned by the Grifols family. There are 426.1 million A shares and 261.4 million B shares.

Grifols is a growth beast. Revenues were €2.74 billion ($3.3702) in 2013 and grew to €4.3 billion ($5.3 billion) in 2017. It takes $1.23 to buy one euro. Earnings per share grew from €0.51 to €0.97 over that time frame. Profit margins were over 15% last year. It doesn’t get much better than that.

The balance sheet is a little debt heavy. The asset side shows €886.5 million ($1.09 billion) in cash and €386 million ($475 million). The liability side shows €571 million ($702 million) in payables and €5.9 billion ($7.3 billion) in debt. Cash flow from operations were €841.7 million ($1.035 billion) and capex was €251.5 million ($309 million) for a free cash flow of €590.2 million ($726 million). Free cash flow is often low because so much money has been invested into new operations. The company recently announced another $210 million investment in North Carolina.

How Grifols works is like this. You go to one of Grifols' 190 centers in the United States and give plasma. This is the best part of the blood. You get

This article was written by

Holmes Osborne profile picture
Holmes Osborne is the principal of Osborne Global Investments. Holmes holds the Chartered Financial Analyst designation and a degree in finance from Syracuse University. He has been featured in the Wall Street Journal, Fortune Magazine, and Investors' Business Daily. Holmes has written financial columns for Seeking Alpha, the Motley Fool, theStreet.com, Gurufous, and several other publications.  Osborne Global focuses on fixed income, value investing, and international stocks.  Holmes is the father to two daughters, Adelaide and Emily.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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