Monthly Archives: July 2022

Admiral Plc – Deep Dive and Re-underwriting the Stock

Disclaimer: This is not investment advise but some rather incoherent ramblings of an extremely incompetent former value investor. DO YOUR OWN RESEARCH AND NEVER TRUST ANONYMOUS DUDES ON THE INTERNET!!

On “re-underwriting” an existing position

While writing part 1 of the UK Insurance update and even earlier, during the analysis of Naked Wines, I realized that my investment process has (among other issues) one serious gap: I have no systematic way to reassess or “re-underwrite” a position, especially for those who are in the portfolio for a longer time.

I do a short review every year in my “xx stocks for 20xx” series, but I do not seriously analyse my longer term holdings unless there is a problem.

In some cases that works well, but in other cases, I have been missing things or the case goes far away from the original case. Due to time constraints, doing this every year is not realistic, but going forward, I plan to do this on a 3 year rolling basis for each long term holding.

Review of my initial Admiral case

My original Admiral investment case was from 2014 and can be read here. The initial “underwritten business case” was as follows:

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Insurance vs. Inflation & Interest rates (Admiral, Sabre, DirectLine) – Part 1

Spoiler: Readers only looking for “actionable investment advice” might skip this post as this is about the basics. The short summary is: Inflation is not good for P&C insurers.

Background: Inflation is back

Last week, especially UK insurance stocks were rattled by news from Sabre Insurance that inflation was hurting them both, through rising claims but also rising reinsurance costs.

Sabre lost -40% that day Admiral and DirectLine were down double digits. On Monday, DirectLine, another UK direct insurer issued a very cautious Trading Update which again led to further losses. The whole disaster can be seen in this chart:

admiral comps

Inflation and Insurance

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Some links

The Rational Walk blog on why researching companies that are too expensive might actually make a lot of sense

The “Uber leaks” picture a horrible company

SPACs were never a good idea for anyone except the promoters and even Bill Ackman is sending money back to investors

Interesting post on AMETEK, a company that compounded nicely over several decades

Companies with difficult to pronounce names might be systematically undervalued

Chrysalis and other “listed VCs” seem to be far behind the curve in valuation of their holdings

Some interesting details on “Twitter vs. Musk”






Performance review 6M 2022 – Comment “The Siren’s Song of Fallen Angels and (very) low P/E stocks”

In the first 6 months of 2022, the Value & Opportunity portfolio lost  -14,4% (including dividends, no taxes) against a loss of -20,2% 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 2022:

Partners Fund TGV: -33,5%
Profitlich/Schmidlin: -18,1 %
Squad European Convictions -13,1%
Ennismore European Smaller Cos -2,5% (in EUR)
Frankfurter Aktienfonds für Stiftungen -14,1%
Greiff Special Situation -2,5%
Squad Aguja Special Situation -12,7%
Paladin One -17,0%

Performance review:

Overall, the portfolio was more or less in the middle of my peer group. Looking at the monthly returns, it is clear that June was one of the worst months in the 11 1/2 years of the blog in absolute terms:

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All Danish Shares part 9 – Nr. 81-90

And on we go, another 10 randomly selected Danish stocks. In the current batch, there are some very interesting and unique business models, however only one made it onto the “watch list”. We are now at ~50% coverage of the universe. Once again a quick reminder: Thank you for any requests to look at a specific company, but the random generator determines in what order I look at companies.

81. Scandinavian Medical Solution A/S

Scandinavian Medical is a 17 mn EUR market cap company that seems to be active in trading second-hand medical equipment that was IPOed in late 2021. Not my area of expertise. “pass”.

82. ChemoMetec A/S

ChemoMetec is a 1,9 bn EUR market cap MedTech company that offers Equipment to count cells which, among others is used for  Advanced Cell Analysis, Counting of Mammalian Cells, Yeast Cells, and Sperm Cells.

The stock has performed very well over the last 5 years:


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