Berkshire Letter to Shareholders 2020
Broyhill Q4 Letter including a write up on Sam Zell’s Equity Commonwealth (EQC)
YetAntotherValueBlog with its wide ranging monthly post (Virtu, SPACs etc.)
Sneakers have become a financial asset class including, indices, exchanges and of course HFT bots
Digital block chain linked videos seem to become a “hot” asset as well
Clark Street Value on the Technip Energy Spin-off situation
RagnarisaPirate really likes Thryv
Disclosure: I have no exposure to Grenke nor do I plan to have no exposure for the foreseeable future.
Grenke is a company I have written about quite often in this blog. My only investment had been the purchase of Grenke Bonds after the “Short Attack” in September 2020. I divested them relatively soon after the first rebound with a decent profit.
Since then a couple of things happened: The COO suddenly resigned on Feb. 8th, with an understandable explanation given only one day later. The story that was also communicated via some back channels was, that everything was fine and the main issue was that the German regulator BAFIN is over eager after the Wirecard Fiasco and there is no reason to worry. Another story is that Grenke is still an “innocent” inexperienced company and therefore communication is not so professional but the company as such is a great company with a great future.
Personally, I always had issues with Grenke. Yes the numbers always looked great, but I found the reporting very intransparent, for instance their “Free Cash Flow” definition which included debt issuance which at least in my “old school” thinking is not even close to free cash flow.
Last week now, Grenke came out with an update which at first sounded like what we in Germany would say is a “Persilschein” or a proof that everything is great. It starts as follows:
This is not investment advice. PLEASE DO YOUR OWN RESEARCH !!!
Extra Health Warning
I guess some old time readers will think: Now that guy really lost his marbles or so. I have very little knowledge about Biotech companies and the industry in general and nothing qualifies me to write about a Biotech stock. My only experience with Biotech companies during the 10 years of the blog was Swiss based Actelion, but only as a special situation with a Spin-off component. So you might take this post as a warning signal that markets have become overheated and the author of this blog has indeed lost his marbles.
Despite my limited experience and understanding of the sector, I do think that BioNTech represents an interesting “bet” on the success of the underlying mRNA technology and the ability of BioNTech to establish (or having already succeeded) a platform that will yield much more than just this one blockbuster Covid-19 vaccine but many other successful vaccines and cancer drugs (and more). Their intention to become a “full fledged” pharmaceutical company could be the start of a long “Compounding story” if successful, but there are also clearly many risks involved.
BionTech history IPO & “Pivot”
The Auto1 IPO
Tomorrow, Auto1, the new German “Mega Unicorn” will go public and trade for the first time. At the upper end of the current book building range (38 EUR/share), which turned out to be the IPO price, the company is valued at almost 8 bn EUR. And that is before the expected “pop” at the IPO.
The company has currently 173 mn shares outstanding and will will issue 31.25 mn new Shares for around 1 bn that will go to the company. Another 15,625 mn shares will offered by existing shareholders, including the founders and the management.
As I will line out in the post, despite the very different sector (used cars), the underlying business model is somehow similar to Just Eat Takeaway.com (JET), a stock I have written about recently. The aim of this post ist to compare the business models of Auto1 and JET and to also compare the valuation the market grants to these 2 companies.
Spoiler: there will be no “actionable insights” in this post.
Auto1 business model
By coincidence, I downloaded this book before I got interested in Play Magnus a few months ago. However this clearly motivated me to move the book to the front of the reading list…..
Garry Kasparow has been named as one of the greatest Chess players of all time and became Chess world chmapion in 1985 at the age of 22 and held the title over 15 years. After his chess carreer, he surprisingly went into politics. As a funny side note: Kasparov was involved in founding the first online chess company in 1999. In between he coached younger chess players, for instance Magnus Carlsen in 2009.
In this book, Kasparov tries to transport strategic lessons from Chess into fields like business, politics and investment. In between he also covers his greatest matches, hardest opponents (Karpov !!) and the lessons he learned both, from victories and defeats.
Disclaimer: This is not investment advice. PLEASE DO YOU OWN RESEARCH !!!
Alimentation Couche-Tard (“CT”) is one of the historically best performing Canadian companies, operating gas stations and convenience stores around the world with a focus on North America.
The company currently looks like a very interesting GARP (growth at a reasonable price) stock. Over the last 10 years, the company showed exceptionally good numbers: 23% EPS CAGR and 10 year average returns on capital >20% (23% ROE, ~20% ROCE). The business model is very resilient, Covid-19 actually led to an increase in margins and profits, both on the convenience store segment as well as in fuel despite declining sales.