Monthly Archives: October 2013

Missed opportunity: Autogrill SpA spin-off

Sometimes, the good old-fashioned simple ideas still work very well. One very recent example, which for some reasons I totally missed, was the recent spin-off of Word Duty Free from the parent Autogrill in the beginning of October.

The remaining business is the well-known restaurant business along Freeways, the duty-free business is the international business in most of the world’s airports.

If one looks at the Autogrill stock, the spin-off was a fantastic success:

A more than 50% outperformance against the index. The spun off stock World Duty Free now trades at a P/E of around 20, reflecting the assumed growth potential, the market cap is with 2 bn EUR higher than the parent (~1.5 bn). The CEO of the parent by the way is now CEO of the spin-off company.

I remember having read about the spin-off some months ago but I didn’t really follow-up. It is very interesting to see, how in this case this has unlocked value so quickly. It clearly shows also in my opinion, that some PIIGS companies with international exposure might still be heavily discounted by the market.

Unfortunately, I think the Autogrill spin-off is rather an exception than the rule for PIIGS companies, but I think it still makes sense to look for similar deals in the future.

Performance review September 2013


September was a very strong month in most markets. The Benchmark (50% Eurostoxx, 30% Dax, 20% MDAX) gained 5.6%, this is the best month for the market since January 2012, where the BM started into the year with an 8.4% gain. Interestingly in September, the Eurostoxx outperformed both, DAX and MDAX.

The portfolio gained 4.9%, an underperformance of -0.7%. As discussed many times, I expect the portfolio to underperform in these markets, especially now when I own around 25% cash.

On a year-to-date basis, the portfolio is still ahead the benchmark with a gain of 26.6% against 17.5%.

The September performance was boosted significantly by two special events: The new buy out attempt for Rhoen Klinikum (+8.6%) and the minority buy out of EGIS (+30%). Other outperformers were Sol (+9.1%), Tonnelerie (+9.7%) G. Perrier (+9.5%), IGE (+7.1%). Underperformers were April (-1.3%) and Miko (+1.6%).

Nevertheless it is also important in my opinion to assess the own performance as objectively as possible with regard to skill and luck. Yes, 26.6% YTD sounds like a lot of skill. But in reality, there is a huge percentage of luck (in the form of BM performance) involved as well. European small and mid cap indices are performing like crazy (MDAX +30% YTDT, French mdi/small caps +22%, Italian Small/midcaps +31% and +37)%. As I am investing mostly into those small and midcaps, my performance doesn’t really look so good compared to those benchmarks. Yes, the decision to invest half of the portfolio in French and Italian small and midcaps was a good one, but the stock selection was rather mediocre and the cash allocation so far value destroying.

Portfolio activity

Portfolio activity was rather high with 3 transactions. I sold Pharmstandard after a few days because I overlooked an important aspect (record date). I increased the Rhoen Position and I added Trilogiq as a new “half” position. I am actually considering putting a “hard” limit on portfolio transactions per month in place (maybe 2 or 3)

Portfolio as of 30.09.2013:

Name Weight Perf. Incl. Div
Hornbach Baumarkt 3.9% 8.8%
Miko 2.5% 4.3%
Tonnellerie Frere Paris 5.9% 99.9%
Vetropack 3.8% 7.3%
Installux 2.8% 24.5%
Poujoulat 0.8% 11.4%
Cranswick 5.5% 44.7%
April SA 3.8% 33.0%
SOL Spa 2.9% 54.9%
Gronlandsbanken 1.8% 12.3%
G. Perrier 3.7% 50.3%
IGE & XAO 2.1% 18.5%
EGIS 3.2% 35.0%
Thermador 2.6% 8.2%
Trilogiq 2.4% 8.4%
KAS Bank NV 4.9% 45.7%
SIAS 5.1% 75.1%
Drägerwerk Genüsse D 8.2% 169.2%
DEPFA LT2 2015 2.6% 67.3%
HT1 Funding 4.1% 49.9%
EMAK SPA 4.6% 54.2%
Rhoen Klinikum 4.6% 12.1%
Short: Prada -0.9% -17.5%
Short Lyxor Cac40 -1.1% -17.5%
Short Ishares FTSE MIB -1.9% -15.4%
Short CHF EUR 0.2% 6.4%
Cash 21.9%  
Core Value 48.0%  
Opportunity 33.9%  
Short+ Hedges -3.8%  
Cash 21.9%  
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