Short cuts: Coface & Interactive Brokers
Disclaimer: This is not investment advice, please do your own research !!!
I made two smaller purchase over the last few days:
- Interactive Brokers at ~39,75 USD/Share, 1,4% of the portfolio
- Coface at ~5,70 ER per share, 1,5% of the portfolio
A quick summary of the ideas behind it:
Although I am not a client (yet), i do think that IAB is a very well run company. Clearly there is cost pressure on the fee side but IAB is a leading tech player in that space and is run by an exceptional founder/enterpreneur. Times like these are also great times to acquire new customers. I used today’s announcement regarding a loss due to the Oil price 65 sigma event to buy a starter position for my “Different” bucket of the portfolio.
As a fun fact, founder Thomas Peterfly states in the IR page that he doesn’t want non-users as shareholders because:
Investment by passive investors, and by others who do not use our platform, tends to cause a run up in our share price. This makes it more difficult for our clients to purchase our shares.
You may be considering investing in IBKR. We would like to ask you not to buy our shares unless you become an active user of our platform prior to doing so.
So please don’t tell him that I violated this rule….
I owned the company before as a special situation and made a decent profit. For the business model etc. please read the old post as not a lot has changed, only that the market leader Euler-Hermes is not listed anymore.
Coface will be hit during this crisis badly, this is for sure. How badly, no one knows. However one thing changed over the last few days: Many Governments have created special assistence programs/guarantees for credit insurance for instance:
Although I have no visibility on how this actually play out, I am willing to make a small “punt” here. Why ? Trade Credit insurance over the last years was in competition with other forms of Supply chain finance and more often than not companies asked “why do I need this at all ?”
The current crisis clearly demonstrates the benefits of these policies as funding for alternatives dries up and the Government aid could also be interpreted as a government sponsored customer acquisition program.
As far as I have seen, these Government announcements had zero effects on the share price. I do think this guarantees are worth something.
Plus, the credit insurers have build up some decent buffers and as elsewhere in insurance, a real “cat event” will increase premiums going forward. I was clearly to early but I am willing to add in the coming days for a “counter cyclical” special situation.