Performance review June 2014
In June, the portfolio gained 0,9% against -1,2% for the Benchmark (Eurostoxx50 (Perf.Ind) (25%), Eurostoxx small 200 (25%), DAX (30%), MDAX (20%)) an outperformance of +2,1%. YTD, the score is +10,2% against 4,1% for the Benchmark.
For June, positive contributers were IGE+XAO (+13,2%), Sistema (+7,5%), Admiral (+6,2%). Main loosers were Van Lanschott (-4,2%), KAS Bank (-4%,0%) and Energiedienst (-2,5%).
Interestingly enough, June was the fourth month in 2014 with negative BM performance and significant outperformance of the portfolio. This is how 2014 looks on a monthly basis:
|Bench||Portfolio||Perf BM||Perf. Portf.||Portf-BM|
So whenever the market performs strongly, the portfolio underperforms significantly and when the market retreats it more then compensates. There is certainly some time lag involved here but I cannot completely explain what is happening here. At least it doesn’t look like a lot of beta 😉
June was a very quiet month, the only transaction was to sell the remaining April SA stake. Although I introduced Admiral in June, I had invested already in April. The current portfolio as always can be seen here.
Including all the earned dividends, cash is now at ~11,8% plus the 5% in the Depfa LT2 which I consider very close to cash.
Currently, Portugal Telecom is “under review”. I bought a small position in order to keep my interest in the PTC/OI merger, the recent news about the undisclosed Rioforte investment caught me by surprise. I have sent an Email to PTC IR in order to clarify the accounting, but overall I think this is not a comapny to invest in after this incident.
As I have already written, in early July I already invested another 2,5% of the portfolio into NN Group, the Dutch IPO and insurance subsidiary of ING.
Congratulations to the anticyclical performance.
As much as the PTC story is interesting, I would like to ask the most influential German / international value blog and MME007 on his opinion about the develoment around Marseille Kliniken. I think it is outrageuos and activis, value investors should stick to their stocks despite the planend delisting.
to be honest, I never considered Marseille as investible, so I never really looked at it and have no opinion.
Congratulation., your portfolio behaves really anticyclical. 😉
With your addition of NN-group you dive below a cash-level of 10%. That seems to be less than your average cash-level in 2013. Coincidence or change of strategy?
I consider my Depfa LT2 2015 bond as very close to cash, so I would argue that I have around 15% cash including this position.
Here’s how this might play out: PT will lose – say – 50% of their investment in Rioforte. PTP was valued at 1.75 B EUR as part of the capital increase. Now they lose 450M EUR in Rioforte. That’s a 25% decrease in contributed value and the exchange ratio will be adjusted accordingly.
Secondly PT and OI can’t merge because PT will have a ton of shareholder suits pending. PT only holds OI stock and a couple of OI related entities (PT Portugal is now already 100% owned by OI). They’ll need to defend these suits and sell off OI shares as they pay out suing shareholders. They can’t distribute all OI shares to their shareholders because of these pending liabilities.
So PT is essentially screwed. And they deserve it. OI was bad to their minority shareholders during the capital increase. But this is now open theft. Note that the PT board is full of Espirito Santo affiliated board members. This will become a major scandal.
If OI can keep up the story that they didn’t know anything (not all that credible btw) they could come out unimpacted and the recent selloff should be undone.
There is no excuse for owning PT at this point. Reasonable trades are (a) short PT (b) long OIBR or (c) short PT, long OIBR. If have (c) on in size.
Sell your entire stake at PTC, because PTC will loose more than 50% of their investment at Rioforte.
Rg PTC: short 1 x ptc, long 3.95 x oibr as oibr trades at a ~5% discount to ptc. Company says if rioforte defaults they will adjust the exchange ratio so this gives you the opportunity of a home run in that case. Risk is this just drags on and on, the merger doesn’t close and the spread blows out.