carefully randomly selected German stocks.
576. TDMI AG
Zombie stock, “pass”.
577. New Work AG (XING AG)
New Work AG (former XING AG) is a very interesting company. The 1.3 bn market cap company is the German speaking version of LinkedIn. I used to be a (happy) member of XING until they began flooding me with tons of unwanted adverts. I still maintain an account there but since then have moved to LinkedIn. That’s maybe one of the reasons why the B2C side seems to be stagnating, but they compensate with increasing B2B revenues. They also run the German version of “Glasdoor” called kununu.
Disclaimer. This is not investment advice. PLEASE DO YOUR OWN RESEARCH !!!!
More than five years ago I wrote about why it could make sense to invest into other actively managed funds even if one considers oneself an active investor. I would summarize the criteria that were important to me as follows:
The interests of the manager should be long term aligned with investors and the manager should possess specific skills to complement the own portfolio as well as to enable some learning.
Disclaimer: This is not investment advice. Please do your own research !!!!
German Startups Group – Sell
As mentioned in the comments of the original post, I sold out the complete position today at an average price of ~1,71 EUR per share.
When I established the position in December 2019, the case was simple:
My assumption was that the intrinsic value of the portfolio was higher than the ~ 1,40 EUR share price, that the management would continue to liquidate the portfolio and that there would be a catalyst in form of share repurchases.
From an incentive perspective, the CEO had a big incentive to move the share price above 1,80 EUR so that the management fees would kick back in.
Implicitly however there was always the risk, that the CEO would hesitate to reduce the asset base as this would reduce the AUM and management fees accordingly, but the risk/return profile looked OK for me.
After a 4 week break, a new batch of 25 randomly selected German shares. Seven of them I found worth “watching”, although none of them with super high priority. And only 200 more stocks to go 😉
551. Pfeiffer Vacuum AG
Pfeiffer is a 1.7 bn company that specializes in vacuum technology and especially vacuum pumps. the stock price recovered quickly after the crisis despite a pretty disappointing 2019 and is still within the long term growth path:
In the first 6 months of 2020, the Value & Opportunity portfolio gained +0,9% (including dividends, no taxes) against a loss of -9.6% for the Benchmark (Eurostoxx50 (25%), Eurostoxx small 200 (25%), DAX (30%), MDAX (20%), all TR indices).
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 in the first 6M 2020:
Partners Fund TGV: +0.9%
Squad European Convictions -4.7%
Ennismore European Smaller Cos –7.49% (in GBP)
Frankfurter Aktienfonds für Stiftungen -13.5%
Evermore Global Value -23.6%(USD)
Greiff Special Situation -4.2%
Squad Aguja Special Situation -0.2%
Since inception (01.01.2011), this translates into +193,0% vs. 93.1% for the Benchmark.
As promised last time, the follow up to the follow up. Let’s look at a few other “actors” in this developing crime story.
A few updates:
Yesterday, the German authorities started searching offices and private homesa second time with a big team of over 50 people. The new CEO in a feature story of Manager Magazin seems to have found out on his first day that the fraud started at least 5 years ago. After the crazy
idiot speculator orgy the last two days, the stock seems to approach back its intrinsic value of 0,00 EUR per share.
The local newspaper SZ “discovered” that the escrow accounts were not the only fraud and and a lot of well known clients & cooperation partners leave the sinking ship rapidly, for instance Aldi Süd, Allianz and Softbank.
My new prediction is that not only the stock is a zero but all debt at TopCo level is essentially worthless.
There is also a very good interview with Dan McCrum on finanz-szene.de which covers a lot of aspects that I have been writing about. Most interestingly, McCrum promises to “tell the bigger story”……
The German Regulator BAFIN and what went wrong there