Monthly Archives: July 2019

Idea generation: Q2 2019 Investment letters


A few days ago, I posted the link to a Reddit collection of Q2 investment letters. Many of these letters plus some others in my opinion are good inspirations to lok for new ideas.  With less time available for me to create “original” ideas, I mentioned some time ago that I will use these letters much more to find interesting cases than in the past.

Inittially, I wanted to create my private “to do”list of companies that I want to look at. The criteria for selcting ideas is quite subjective.

However in order to leverage my readership, I  decided to create a post with my selected “stolen ideas” and hope for some constructive feedback from my readers. Here is the list what I found interesting and why.

Selected ideas from Q2 letters:

Choice Equities: Par Technology
Interesting case of a “sum-of parts” company with a SaaS business hidden behind other stuff

Tweedy: BASF
One of the better managed German companies. Cyclical but potentially good opportunityin a real economic downturn. Business is hard to disrupt

Alta Fox: Keyword Studios
Interesting business model (outsourcing of Video Game prodcution) and European based company. Expensive but potentially very interesting.

Read more

Special situation Quickie: Acacia/Cisco & Grandvision/ EssilorLuxottica

First of all thanks to the readers that mentioned these two potential M&A arbitrage situations.


Acacia, a US based received a take over offer from Tech Giant Cisco valuing the company at 2.6bn or 70 USD per share. The offer price included a 46% premium on the undisturbed price. The stock traded at the time of writing at 64,75 USD, indicating a 5,25 USD or a 8,1% premium.

The transaction is expected to close at the end of Cisco’s Q2 FY 2020 which if I have read it correctly translates into January 2020.

Read more

Some links

My friends from Langfrist have issued their half year reports:
TGV Partners 6M 2019
TGV Truffle 6M 2019
TGV Rubicon 6M 2019 

Interesting analysis why Value Investing seems to underperform in times of technological revolutions

A great deep dive into the current state of streaming video

Good summer reading list from A16Z

SaaS mania: Recent IPO Zoom now trades at ~62 times revenue

Machines these days can play online poker really well

Ray Dalio on Paradigm shifts

Special situation Quickie: Axel Springer voluntary tender offer EUR 63/share

A few weeks ago, PE big weight KKR had announced to make a voluntary tender offer for German publisher Axel Springer at EUR 63 per share.

It is an interesting case as the offer is targeting only a minority stake. The threshold for the offer is set at only 20%.

The background seems to be that the biggest shareholder, Friede Springer and the CEO Döpfner, who own together ~45% want to make sure that they control the company together with KKR as they have entered into a shareholder agreement.

Looking at the stock price we can see that the offer has been made at a significant premium (~40%) but still below 2018 prices:


There seem to have been other attempts to make sure that Friede and Döpfner control the company but they didn’t succeed.

Read more

Special situation quickie: Osram take-over at EUR 35 /share

This will be a very short one:

Bain Capital and Carlyle want to take over Osram at 35 EUR per share. The offer is friendly as Managment and Supervisory board have agreed to the takeover.

The offer runs until beginning of September and minimum acceptance level is 70%.

There is no detailed offer document out now yet.

Nevertheless I established a 2,5% position at ~33.1 EUR, providing a 5,7% potential return.

Major risk is in my opinion politics (loss of jobs), chances to the upside could come form activists pushing for a higher price. In the meantime there could be clearly hick-ups (not reaching the 70% because of activist involvement) but Bain and Carlyle are pros.

The buyers are top tier PEs who execute this kind of offers well and have the money.

For those investors who remember: I looked at the Osram spin-off 6 years ago, but then failed to buy the stock because my limit was a few cents too low. So I know the company relatively well. This doesn’t of course guarantee any success ……

Performance review 6M 2019 – Comment: “Not enough Tech ?”

In the first 6 months of 2019, the Value & Opportunity portfolio gained 12,4% (including dividends, no taxes) against 17.7% for the Benchmark (Eurostoxx50 (Perf.Ind) (25%), Eurostoxx small 200 (25%), DAX (30%), MDAX (20%)).

Links to previous Performance reviews can be found on the Performance Page of the blog.

Some other funds that I follow have performed as follows for 6M 2019:

Partners Fund TGV: 6,8%
Profitlich/Schmidlin: +9,2%
Squad European Convictions +11,2%
Ennismore European Smaller Cos +6.09% (in EUR)
Frankfurter Aktienfonds für Stiftungen -0,5%
Evermore Global Value  +13,42% (USD)
Greiff Special Situation +2,6%
Squad Aguja Special Situation +8,5%

Read more