Performance Q1 2018:
In Q1 2018, the Value & Opportunity portfolio lost -1,38% (including dividends, no taxes) against -3,90% for the Benchmark (Eurostoxx50 (Perf.Ind) (25%), Eurostoxx small 200 (25%), DAX (30%), MDAX (20%)).
Some other funds that I follow have performed as follows in Q1 2018:
Partners Fund TGV: -10,79%
Squad European Convictions +0,19%
Ennismore European Smaller Cos -1,40% (in EUR)
Frankfurter Aktienfonds für Stiftungen -0,47%
Evermore Global Value -3,03%
Greiff Special Situation +0,65%
Squad Aguja Special Situation -5,38%
Paladin One +0,57%
Electrica is the only remaining “Emerging Market” stock in my portfolio. I bought the stock in December 2014 and now after 3 year and some months it maybe time to assess how the situation looks against my initial expectations.
Including dividends, the stock is up ~18% in total since then, in my portfolio however the stock is flat because I bought more of Electrica at higher prices. Compared to a +53% performance of the portfolio in the same period, the stock is clearly a underperformer and the question is clearly if I should keep the stock.
My initial thesis relied on the following assumptions:
- the stock was cheap for a grid company with guaranteed returns on invested capital
- Romania was supposed to grow significantly and Electrica as well
- As a former Government owned company, I expected significant cost savings potential
- I had expected After Tax / After minority Earnings of around 442 mn RON in 2017
What happened ?