value and opportunity

Another 10 randomly selected Swiss shares. This time, two share made it into the watch list.

41. WISeKey AG

WISekey is a 102 mn CHF market cap Cybersecurity firm that went public in 2016. The company made some headlines pre IPO as Kevin Spacey was one of the investors. The first quoted price has been 12 CHF/share, in the meantime, the stock lost -90%. The company investor presentation manages to have 27 pages without a single hard number.

The company claims to be in the midst of Blockchain, IOT and AI. However Sales have been shrinking and losses are at a level of 2x sales. “Pass”.

42. Banque Cantonal de Jura SA

Banque Cantonal de Jura SA is a 142 mn CHF market cap local bank. The stock looks relatively cheap (P/E 14, below book), however profit has been declining for some time despite balance sheet growth and the stock price has been doing absolutely nothing for the last 12-13 Years. Local banking with negative rates is no fun. “Pass”.

43. New Value AG

New Value AG is a 2 mn Nano cap that seems to somehow invest in start-ups. They seem to be looking for new capital, but they won’t get this from my side. “Pass”.

44. Bell Food AG

Bell Food is a 1,8 bn CHF market cap company that is active in the food sector. The companies core business has been meat and sausages but in recent years they diversified into convenience food like Sandwiches and even salads.

The company showed very good resilience in 2020 and managed to both, increase top line and profit. The share price looks boring but with a clear long term upwards trend:

2/3 of the companies sales are in Switzerland which protects local meat producers by high tariffs. They managed to shift the mix from meat and sausage to convenience in the recent years.

The company doesn’t look expensive, with a P/E of ~15-16, however the company plans to spend all of the cash flow in the coming years into Capex.

The company reminds me a little of Cranswick, the UK equivalent, nevertheless I am hesitating here as I see long term headwinds to meat and sausage consumption which is still 80% of their business. Therefore I’ll “pass”.

45. Züblin Immobilien Holding AGAG

Züblin is a 97 mn CHF market cap real estate company that owns primarily office buildings. The company is another one that is controlled by Russian Oligarch Viktor Vekselberg (via a HoldCo in Panama) which adds another reason not to look deeper here. “pass”.

46. Bachem AG

Bachem is a 3,7 bn bio-chemical/pharmaceutical company whose stock price took off like a rocket over the past 3 years after doing nothing for the  past 20 years:

Bachem produces peptides and “oligonucleotides” which seem to be important ingredients for new kind of pharmaceuticals. They had a fantastic 2020 with sales up 28% and net income +55%. EBIT margin reached 24%. However, with the share price increase, the company trades at a P/E of 46.

For me it was not easy to see at first sight why they are now so successful and what did change, but I find the company interesting. Maybe their 2015 US acquisition has made that difference but I want to learn more. Therefore I’ll put them on “watch”.

47. HIAG Immobilien AG

HIAG Immobilien is a 860 mn CGF market cap real estate company that only invests in Switzerland. The company seems to specialize on larger scale developments and trades near NAV. A dividend yield of >2% migth make it interesting for yield starved Swiss investors. “Pass”.

48. Von Roll AG

Von Roll is a 305 mn CHF market cap industrial company focused on Energy generation and energy transmission. Looking at the share price, the company clearly has seen better days:

What I find interesting is that their business consists of some business lines that are related to the big electrification story, mostly insulation solutions for hig hand low voltage lines.

However 2020 looked really ugly and they made a lot of losses over the years.

In the past, there seems to have been a fight between Vekselberg and the German Finck billionaire family over the control, with the Fincks finally winning, owning around 67% of the company. However that didn’t really improve the actual business.

Von Roll is clearly a difficult stock but I put it on “Watch” due to the electrification angle.

49. Vaudoise Assurance

Vaudoise Assurance is a 1.4 bn CHF market cap insurance company that is majority (2/3) owned by a mutual cooperative.  Vaudoise is only active within Switzerland with the majority of the business in the Life/Financial business. The stock looks quite cheap (~0,7 times book value, 12x earnings), but profitability is also relatively low. However EPS is lower than in 2014 which shows in the stagnating share price:

For local investors, a dividend yield of >3% might be attractive but from my perspective, there is no upside in such a company/stock. “Pass”.

50. Zwahlen & Mayr SA

Zwahlen is 14 mn market cap maker of steel tubes. The company got hit hard in 2020 by Covid and had to post a loss, However looking back, the company seems to be struggling for a long  time. The company is owned 70% by an Italien company. Nothing to see here, “pass”.