value and opportunity

Again a quick upfront comment: Why did I start that series right now ? I guess it is a combination of bad experience in some foreign stocks (Cars.com, Silver Chef), the expectation of a more economically difficult situation in Germany (which will probably provide some opportunities later on) and curiosity. So far I have to say it is great fun, at least for me.

Nr. 40: Solutiance AG – ISIN: DE0006926504

Another renamed/reactivated company, now something with real etsate management software. 10 mn market cap, around 1 mn sales. “Pass”

Nr. 41: Surteco AG – ISIN: DE0005176903

360 mn market cap “Mittelstand” company producing mostly surface panels for the furniture industry. The company is majority owned by a family and looks relatively cheap. However company is stagnating since a long time and unacceptable low returns on capital (low single digits). The stock price hasn’t moved since 20 years now,

Surteco is also a good examle that just family ownership itself does not create superior long term returns.  “Pass”

Nr. 42: Klepper Faltbootwerft AG – ISIN: DE0006051949

0,3 mn market cap company that produces foldable boats. Loss making and legal issues. “Pass”.

Nr. 43 Mediclin AG – ISIN: DE0006595101

270 mn market cap Hospital chain which is majority owned by Asklepios. Little free float. Difficult market although company is doing somehow better than in the past, however not my area of expertise. “Pass”.

Nr. 44: Your Family Entertainment AG – ISIN: DE000A161N14

10 mn market cap children TV company owning the rights for “Fix & Foxi”. However in the last few years business seems to be in a steep decline. CEO is one of the heirs of recently deceased Volkswagen honcho Ferdinand Piech. “Pass”

Nr. 45: a.a.a. allgmeine anlageverwaltung ISIN: DE0007228009

45 mn EUR market cap real estate developer. market cap equals NAV, doesn’t look interesting. “Pass”.

Nr. 46: Edding AG – ISIN DE0005647937

80 mn EUR market cap company producing text markers and other equipment for presentations plus office supply. Normally this is a decent business with ~10% EBIT margins and relatively steady growth. At the moment, the  Company is struggling with its subsifdiary in Argentina and other foreign market like Turkey., whereas the German business is actually doing very well. They just released 6 month report shows a lost and they adjusted downwards their expectations both for 2019 and 2020. Nevertheless in principle interesting.

The company has net cash of around 10 mn. If they would reach their reduced 2020 plan (EBIT of 11-15 mn) , the company would be quite cheap.  There is however only thin trading and only the non-voting pref shares are listed. Could be one for the “boring” bucket, “Watch”

Nr. 47: Deutsche Telekom AG – ISIN DE0005557508

72 bn market cap German Telecom leader. As almost all other TelCos struggling. Capital intensive business, especially with the introduction of 5G. Not my expertise. “Pass”.

Nr. 48: SLM Solutions Group – ISIN DE000A111338

3D Printer company with a market cap of 267 mn EUR. Very interesting case, company had a offer of 36 EUR per share from GE in 2018. Hedgefund Elliott took a stake in order to get a better price but then the take over went bust. Plunging sales and big losses these days. still a “watch” for me as a potential special situation at some point in tiem ?

Nr. 49: Freenet AG – ISIN DE000A0Z2ZZ5

2.7 bn Mobile phone service reseller. Highly cash generative and cheap but stagnating market and risky capital allocation decisions (Ceconomy). They are trying a lot of things (online TV, high speed cable networks etc.) but sofar little worked. Somehow charismatic CEO but also a guy who takes a lot of risks. Nevertheless a “watch” candidate as I expect that the company will become active if they thnk that the stock price is too low.