value and opportunity

As many other investors, I think it is currently much more difficult to find new convincing ideas. On the other hand, many of my portfolio stocks performed very well and are now near or past my inititial target. Let’s look first at some of the portfolio stocks:

Rhoen Klinikum

As I have said before, once the share price of Rhoen approaches the initial bid price of 22,50 EUR, I will sell this “special situation” investment which I did last week with an overall return of +32%. Clearly, it would be tempting to “ride” the current momentum, but honestly, I do not know why investors are suddenly so “hot” about the stock.

Fundemantally, at least in my opinion, Rhoen is now fairly valued. Compared to the initial deal, the “rest Rhoen” has to prove if they are a valid company. Sure, it looks like that the party is just getting started but still, the risk/return profile was a lot better at 15 EUR ……

EMAK

I also sold out the remaining EMAK stake. Unfortunately, EMAK did not profit so much from the “January effect” as much as I hoped. As with Rhoen, the “special situation” status has now expired somewhat and long term, EMAK is for me only an “average” company at an “average” price, so no reason to hold it further. I sold yesterday at around 0.85 EUR per share with a total profit of +89% for the whole position.

Sol Spa

Finally, I sold out of Sol Spa last week at well at a price of ~6,10 EUR per share, netting a 55% gain over a holding period of around 14 months. Sol Spa was a hard stock for me to hold. Although I really like the company, the stock price advanced much qicker than the business. Since I looked at them back in April 2012, clealry the health care business continued to grow, but the traditional gas business has to struggle much harder than i thought. The profit declined both, in 2012 and 9m 2013, but the share price still increased by 50%.

At a current P/E of 19, P/B of 1.5 and EV/EBIT of 14, I think the risk/return relationship is not exciting any more. Again, I will most likely regret this in the short term, but mid- to longterm, I cannot justify the investment.

What now ?

The above mentioned transactions generate ~9% additional cash. As I do not have any investible new ideas available, should I just let the cash lie around until I find something better ? Well, thankfully I still have room in my already existing portfolio positions. For two of the stocks I do have a very positive opinion:

TGS Nopec

TGS Nopex has issued surprisingly good Q4 numbers plus they announced a new stock buy back. So a good opportunity to upgrade this to a full (5%) position which I did at around 177,5 NOK per share

MIKO

As I have written before, I expect MIKO to significantly improve profitability for 2013. Therefore I increased the stake in February at a price of around 68,20 EUR per share to increase the stake from around 3.5% to 4.2% of the portfolio. Unfortunetly, there is not enough trading to make it a full position yet.

That still leaves me, even after the new Energiedienst position, with around 19% in cash which suspicously looks like market timing but is not or only indirectly. It is just hard these days to find good stocks at cheap prices. But I am working hard on new (or old) ideas. Further candidates for a potential postion increases are Van Lanschott and Trilogiq.