Monthly Archives: July 2023

Collectors Corner Series Part 1: Laurent-Perrier SA (ISIN FR0006864484)

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Disclaimer: This is not investment advice. PLEASE DO YOUR OWN RESEARCH !!!

Collector’s Corner Introduction

I always wanted to introduce this category of stocks that normally I would not buy as a larger position, but for some reason or the other I want to own nevertheless. Many of such stocks I had passed on in the past and they often performed better than I would have thought. So instead of a typical Investment portfolio, that part would rather be a “collection of fine stocks” and this series will therefore be the collector’s corner. The goal here would be a small pocket of “special” stocks that might look not so attractive from a purely financial perspective, but still have are attractive to me. This could be luxury stocks but also some very strange stocks that I find interesting for other reasons. I am now long enough in the stock market that I cannot afford myself a few “guilty pleasures”.

I don’t have a target allocation here but this should stay below 10% overall at portfolio level. Also, don’t expect a super detailed analyis as with bigger positions.

And, by coincidence, I already have the first stock for the “collector’s corner:

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Mikron Group AG – Super Cheap (EV/EBIT ~4) and +33% EBIt 6M 2023- what is not to like ?

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Disclaimer: This is not investment advice. PLEASE DO YOUR OWN RESEARCH !!!!

Spoiler: If you are short on time: I did not buy a position here. No need to read everything.

Mikron is a company that I had on my (passive) radar since my “All Swiss shares” series some years ago (since I passed on it, it made around +100%, so keep this in mind for the rest of the post). It is a Swiss based machinery manufacturer with a market cap of 200 mn CHF and has some connection to SFS (SFS is a client, same Chairman in the past).

These were the main items that motivated me to looks deeper into Mikron this time:

+ currently very (very !!) cheap (P/E 7,5, EV/EBIT 3,5)
+ currently VERY good business momentum (6M 2023: Sales +22%, EBIT +33%)
+ better customer/product mix than in the past
+ Rock solid balance sheet (100 mn CHF cash vs 200 mn CHF market cap)
+ good share price momentum

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Some links

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It’s 6M report time. Some good ones here:
– TGV Partners (Tucows, Naked Wine)
– TGV Falkenstein (Energiekontor)
– TGV Rubicon (United Internet, Ceconomy, Invision)
– Alluval Capital (Logisteq)
– East72 Dynasty Trust (Bolloré)
– TGV Compound Interest (BionTech, Siltronic, Paypal)

When Seth Klarmann is on a podcast (every 10 years or so) it is worth listening to.

A great look back to the Countrywide/Angelo Mozillo story from Marc Rubinstein

There seems to be plenty of potential for much better heatpumps

Great post on why building a durable goods company these days is quite hard

Many people want to be rich and famous. Morgan Housel is not so sure about the famous part.

Barry Ritholz with good advice on how to get rich in financial markets, sorted by diffculty and likelyhood.

The Social Chain Cash Flow Shenanigan- Could that one have been spotted ?

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Disclaimer: This is not investment advice, just a tiny little bit of “forensic analysis”.

The Social Chain, an initially hot, but now busted “Social Media DTC” company was recently subject to an intervention from German regulator BAFIN, claiming the 2021 accounts contained a material error in the Cashflow statement.

In essence, BAFIN said that The Social Chain’s Operating Cashflow did contain ~60 mn EUR of non-operating cashflow items that should have classified either as Financing and Investing Cashflow.

Why is that important ? Many investors (myself included) consider “Free Cashflow” as a very important metric. Free cashflow consists of Operating Cashflow minus Capex and is generally considered to be less easily manipulated than accounting numbers (“Adjusted EBITDA before costs to build the product”).

Looking at the headline numbers from the 2021 annual report, we can see that despite the “adjusted pro-forma” numbers, the +22 mn Operating cashflow compares to -23mn EUR in EBITDA and -82 mn EUR Net income and seems to generate the impression that the underlying business is cash generating, as the investment cashflow was mostly M&A:

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The return of the “Freedom Energy basket”: ABO Wind vs Energiekontor (BUY)

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Dislaimer: This is not investment advice. PLEASE DO YOUR OWN RESEARCH !!!!

Background:

Some of my readers might remember, that I bought into a “Freedom energy” basket in March 2022 in order to “hedge” against potentially catastrophic effects from the Russia/Ukraine war. After a first nice run, I sold 3 out of the initial 4 (7C Solar, PNE, Energiekontor and ABO Wind) and only kept ABO Wind because I considered it the most undervalued stock.

Looking at the chart we can see that for some of the stocks of that basket, not so much happened, only PNE is still significant above the level of March 2022 (ABO Wind is the solid Yellow chart):

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All Norwegian Stocks Part 11 – Nr. 151-165

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And on we go with yet another 15 randomly selected Norwegian share. Despite many uninteresting or crappy companies, again 2 made it onto the preliminary watchlist. Have fun !!

151. Sogn Sparebank

With around 8 mn EUR market cap, Sogn Sparebank seems to be the smallest Sparebank so far. Maybe interesting for people who live in Årdalstangen, where it is loctated, but not for me. “Pass”.

152. Aqua Bio Technology

From the name alone, I assumed that this 5 mn EUR market cap company would be a crappy 2021/2022 IPO and ….I was wrong. Rather it seems to be a crappy company that has been around for a little bit longer. The company has little income but consistent losses. “Pass”.

153. Norsk Solar

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Performance review 6m 2023 – “AI has saved the day”

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In the first 6 months of 2023, the Value & Opportunity portfolio gained  +5,0% (including dividends, no taxes) against a gain of +12,8% 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 2023:

Partners Fund TGV: 3,6%
Profitlich/Schmidlin: 16,6%
Squad European Convictions +7,6%
Frankfurter Aktienfonds für Stiftungen 6,9%
Squad Aguja Special Situation +5,3%
Paladin One -0,8%
Alphastars Europe + 11,4%

Performance review:

Overall, the portfolio performance was in the lower third of my peer group. As the peer group is mostly Small cap focused, the overall relative low returns correspond with the returns of European small cap indices and are mosly well below Large cap indices. Looking at the monthly returns, it is not difficult to see that especially January and June were in relative terms very disappointing.

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Some links

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The usual ecclectic list of stock write-ups from Capital Employed

If you are a CFO and you want to raise money through a share placement, you better pay attention to the weather

A fantastic “Tour de Force” ride from Prof Damodaran across Chip companies and AI

The seven page memo, that resulted in a 105 mn seed funding round for Mistral.ai (without a product)

6M Portolio Update from the Augustusville blog

A short write-up on Fox Factory, a suspension specialist from Royce

R.i.P. Harry Markovitz, the “Father of Portfolio theory”.