Draeger Genußscheine (ISIN DE0005550719) Update
No real news but a very interesting developement at my largest portfolio position, Draeger Genußscheine.
As a refresher: The “Genußscheine” include the right to receive 10 times the dividend of the pref shares (DRW3, ISIN DE0005550636). I started the position as a long Genußschein / Short pref shares “carry trade”. I decided to cover the short when Drager issued a EUR 210 offer and keep the Genußscheine as this put a floor under the price.
Now, in the last view days one can see something interesting happening: The Pref shares trade lower while the Genußscheine jumped.
If we look at the 10 year history of price of the Genußscheine divided by price of the prefs , we can see that the relation has increased significantly to a 10 year high at currently around 3.7 times.
I didn’t find any real news, however in some internet boards there is a speculation that either Draeger might increase the dividend or even come out with a higher offer. I am not sure about that if they will really do something.
Back then I wrote the following:
For the patient investor, I think the Genußscheine will be still an intersting medium term investment. For the portfolio I will hold them unless I find something better, there is no need to sell.
I think this is the same lesson as from the AIRE KGaA example as well as with the Bertelsmann Genußschein: If someone really wants to have a company or a certain share class / security , it usually pays off to wait and not jump on the first offer.
In the past, I often used to sell at the first offer, being happy to make a nice gain quickly. But as those two example show (so far), the risk /return relationship of just doing nothing and wait further seems to be quite good.
The only “problem” now is that the position is currently 10.2% of the portfolio. a ~10% is kind of the maximum I can stand for a single position, I will have to decide to sell if the Genußschein moves further.
value and opportunity 
Hi mme,
what’s your view on the dividend policy of Draeger in 2014 ? Management has stated several times, that they will increase the pay-out ratio from 15% of EBT to 30% of EBT once the have reached a 40% equity ratio. To me it seems, that they could have surpassed the 40% equity ratio by the end of 2013, i.e. I guess that the dividend should increase significantly in May 2014, which implies that the pay-out ratio for the Genussschein should increase significantly as well.
Hi there,
love your blog. Was looking into Draeger.. it seems the positive carry is back (Long: 1 profit cert, short: 4.7 pref) given the current dividend (with my brokers cost to short the pref it seems the positive carry is about a quarter of a percent (.25%). Nothing to retire on, but interesting that its seemingly costless to put on the market neutral position. Any updates thoughts on the profit certs vs preferred?
hi,
thank you. For some reason, gs seems to be totally decoupeled from the market, so long/short will have quite some volatility….for the time being I stay long the gs.
In der FAS von heute ist ein Interview mit dem Finanzvorstand. Derzeit würden 15% des Gewinnes ausgeschüttet. Wenn 40% Eigenkapitalquote erreicht werde, sollen 30% des Gewinnes ausgeschüttet werden.
congratulations on this great development