Monthly Archives: June 2016

AQ Group (ISIN SE0000772956) – a 15 year “42- bagger” without a Moat ?

Would you consider to invest into a company which at every occasion states the following:

AQ possesses no amazing patents or other security, we rely on having the best crew.

For a “Buffett/Munger” style value investor, this would be tough as there is clearly no moat or anything close and according to Buffett, the business economics always win in the long run, no matter how well a company is run.

Welcome to AQ Group, a Swedish “non moat” manufacturing company

 

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Some links

Great insights how the event ticket market works (hint: You’re screwed)

Armstrong Flooring could be an interesting small cap Spin-off (h/t AR, market folly)

Is there a mattress store bubble ? Plus Jeff Mathews on Mattress Firm (MFRM)

Interesting letter from Gator Capital, a HF focused on financial services companies with an analysis of post-reorg Ambac

Jim Chanos sees big issues in online and auto lending in the US 

Shipping Parties in Greece are not as much fun anymore

 

 

Exor SpA: Buying a Reinsurance company doesn’t mean that you’re the “next Bershire”

Following my Old Mutual “sum of parts” valuation I saw the following Ira Sohn presentation of Exor Spa, the Agnelli family holding (FiatChysler, CNH etc.) as a potential  “Sum of part” value investment.

exor_logo_dec_2013

To summarize the presentation  in my own words:

  • Exor Spa is basically a “Berkshire like” company at a “Graham” valuation
  • Exor is managed by a “great capital allocator” and trades at a discount as people see it as an Italian company
  • After the acquisition of Reinsurance Partner Re Exor should trade at similar valuations as Berkshire or Markel
  • Big upside potential as FiatChrysler, Ferrari (and CNH) are severely undervalued (“Coiled springs”)

The study sees a potential upside of several times the current share price. They forecast a 150 EUR NAV per share (vs. ~50 EUR now and 30 EUR share prices), driven by a quadrupling in value of the FCA and the CNH stakes.

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From the archive: Emak Spa, Sol Spa, Piquadro – The Italian update

From time to time I check on previous investments how they performed and if they might be interesting again. I find  this a very efficient way to create potential (re)investment ideas as only relatively little effort is needed to get up to speed.

EMAK SpA

EMAK SpA was an Italian “special situation” investment I made in 2011 following an “italian style” capital increase in 2011 and then sold end of 2013 and early 2014 for a decent profit. Looking at the chart we can see that the timing of the sale was not that bad, as after a peak of around 1 EUR in early 2014, the stock is now trading ~30% below that price:

emak

Optically, EMAK looks very cheap now:

P/E 12,8
P/B 0,7
EV/EBITDA 7,0

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Old Mutual Plc (ISIN GB00B77J0862): Buy one, get four ?

In the blog I looked in the past at a couple of “sum of parts” situations (Alstom, Viel, CIR SpA but I never invested in one. Why ? Because if nothing happens, a perceived discount can remain for a long time. So for a sum-of-part investment, a “catalyst” has to be on the horizon.

Old Mutual

As many other Emerging Market exposed financial companies, Old Mutual did not create a lot of shareholder value over the last couple of years as the chart clearly shows, although they performed better than the overall index:

old.

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