All Swiss Stocks – Final edition

Condensing the watchlist and some general remarks:

As the ultimate climax (or anticlimax), my readers will find below a table with all Swiss stocks that I identified in round 1 as worth to “watch” including a second flag if they made it into my 20 stock “priority” watch list. Those who manage to read to the very end will also find my next target country for the “All Stocks” series ūüėČ

Overall, I prioritized companies that are already in my portfolio or have the chance to become a member of my high quality “GARP” bucket at some point in time in the future or undergo a potentially value enhancing transformation process (ABB, Metall Zug, Holcim).

I am in general very positively surprised, both on the quality of the businesses that I have seen as well as the quality of the reporting of many companies. I always thought that Switzerland is mostly about banking and tax evasion.

This is speculation on my part, but I do believe that the high costs in Switzerland have forced many local industrial companies to focus on high value add activities and dispose everything that can’t be done competitively in Switzerland. R&D seems to be a big strength, maybe because of an attractive package for global researchers that want to relocate to a nice country.

I also found it interesting that many companies have quite solid balance sheets with only limited use of debt. In a country with a low tax rate, debt doesn’t have a big after tax advantage and many companies (correctly) focus on ROIC or ROCE instead of ROE which further diminishes the requirement for debt.

Of course, this has not been unnoticed by investors and Switzerland is clearly not heaven for Graham investors. However, for “Quality growth” investors, there is a quite decent choice of companies from a variety of sectors.

On the other hand, a little bit similar than in Germany, Switzerland seems to be somehow weak in Software and Internet related businesses. Even the “crypto valley” in Zug hasn’t produced that many listed DLT companies yet.

So this is then the final list, only those with Prio “YES” will be considered:

Serial No Nr. of Analysis Name Watch Round 1? Prio Description
1 77 ABB YES YES Electrific. refocusing /spin-off story
4 205 ADECCO YES NO Not top 20
12 88 ALUFLEXPACK YES YES Interesting product, OK valuation
20 46 BACHEM YES NO too expensive
27 105 BB BIOTECH YES NO not top 20
32 165 BELIMO YES NO Not top 20
41 169 BURCKHARDT YES YES Good company, inter. products
47 82 CEMBRA YES NO Not top 20
55 14 CPH YES YES Interesting packaging sub
58 171 DAETWYLER YES YES Very interesting company
59 58 DATACOLOR YES NO Not top 20
64 143 EDISUN POWER YES NO too speculative
70 9 ENERGIEDIENST YES NO no real growth prospects
81 208 GEBERIT YES NO Too large
83 55 GLARNER KB YES NO too little growth potential
92 22 HUBER+SUHNER YES YES Deeper dive
104 98 KARDEX YES YES Deeper dive
110 125 HOLCIM YES YES Potential long term turn around
113 133 LECLANCHE YES NO Too speculative
114 103 LEM YES YES Electrification
121 28 MEDACTA YES YES Interesting Medtech
122 132 MADARTIS YES YES Interesting Medtech
123 59 MEIER TOBLER YES YES Portfolio
124 198 METALL ZUG YES YES Interesting transformation story
125 64 MEYER BURGER YES NO Portfolio
146 126 POENINA YES NO Not top 20
151 156 RICHEMONT YES YES Portfolio
154 6 ROMANDE YES NO limited growth potential
156 142 SCHAFFNER YES YES Portfolio
159 4 SCHWEITER YES NO Covid one-off ?
160 135 SENSIRION YES YES Interesting company
162 95 SFS GROUP YES YES Interesting company, deeper dive
163 79 SGS YES YES expensive, but interesting company
177 168 SWISS LIFE YES NO Not attractive enough
179 124 SWISS RE YES NO Not attractive enough
183 191 TEMENONS YES NO issues with Mgt. Comp
186 128 TITLIS YES NO Chinese tourism ?
190 54 UBS YES NO No
198 40 VETROPACK YES YES Old portfolio comp
201 48 VON ROLL YES NO to unclear
202 212 VONTOBEL YES YES potentially interesting
203 120 VZ HOLDING YES NO not enough growth
207 119 YPSOMED YES NO too expensive
208 97 ZEHNDER YES NO Not clear if sustainable
212 136 ZUR ROSE YES YES Portfolio

Good bye Switzerland for now and hello….

Next country in line: Denmark !!

Denmark

I have also chosen the next country to look at which is Denmark. Why ? One reason was clearly that it has only a number of limited stocks (something like 70 in total), so I can complete this hopefully within a few months in early 2022. The second reason is that I hope to find again some very high quality companies for my watch list. I own already two Danish stocks (Orsted, NKT) and I know a few that I had looked at in the past (Novo Nordisk, Coloplast).

Watch out Denmark, I’m coming……

10 comments

  • Hello hello,

    in retroperspective, you ran your analysis really at the height of swiss stock valuations.
    Would be interesting to run through your top20 again now – some are really on sale …

    Thanks for sharing so frequently ūüôā

  • Denmark is an interesting pick. I look at them some two years ago. A little like the Swiss I think. Good quality, reporting and so on but different industry tilt than the Swiss. Will be interesting to see if the valuation is lower, I doubt it.

  • I received some feedback on Aluflexpack and its controversial Austrian majority owner. They go off the watchlist, Adecco goes in instead.

  • Simcorp…

  • Surprisingly 2 of my former employers made to the 2nd round :-). Yet, I do not see Holcim turnaround… as higher profitability would basically require going back to cement cartels. Or explosion in distribution costs, locally allowing price increases without competition pressure…

    Considering the increased costs of fuels, I see even less turnaround….

    But anything can be.

    • I think their idea ist to integrate vertically into higher value aggregates, along the path that SIKA has taken….
      But let’s see, it is not my highest conviction watch position ūüėČ

  • Come to think of it, Edward Chancellor‚Äôs book ‚ÄúCapital Returns‚ÄĚ mentioned Swiss companies such as Geberit, Straumann, Sonova(Phonak), he also mentioned a bunch of Danish companies like Demant A/S, GN Store Nord, Coloplast, Novozymes. Maybe time to read his book again…

  • Kudos! I am very impressed with your patient, thorough, diligent approach.¬† Best,Steve¬†

  • Nice end of a great series and great choice of the next Country. Already looking forward to it in anticipation of a few names (that I will keep to myself for the chance of an unbiased look)

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