Monthly Archives: August 2023

Half year 2023 Portfolio Review Part 1/2

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I had mentioned it several times in the past: I don’t think it makes sense to do quarterly updates on portfolio companies, as some of my holdings don’t even report quarterly and it would take away a lot of time.

It is also weirdly fascinating to watch how many investors seem to see quarterly earnings as something of a holy grail that you must follow and react on as quickly as possible (“Beat -buy” etc.). Personally, I prefer to let the dust settle and then, with a time lag of a few weeks have a look at earnings if they are roughly in the direction I had initially envisaged. Sometimes you might miss the best time to sell, but more often in my opinion quarterly earnings are very “noisy” and distract from a longer term picture. I also deliberately ignore analyst expectations and only measure earnings against my own expactions.

Nevertheless, looking at the portfolio every 6 months or so makes some sense. As not all companies report timely, I split this into 2 parts.

So let’s jump into the first part (in no particular order, sorry for that. I will look at Admiral, Alimentation Couche-Tard, Logistec, SFS, TFF Group, Thermador, Solar Group, DCC, Sto, Italmobiliare, Sixt, Nabaltec and Schaffner.

  1. Admiral

Admiral had reported  6 months results a few days ago and the market seems to have been positively surprised. In Admiral’s case, which is a long term holding (~9 years), I actually did “re-underwrite” the stock last year in July, so it makes sense to compare against my business case from last year.

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Some links

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Prof. Damodaran throws in the towel for the rational valuation of Sports Franchises

The Wintergem Blog has an excellent introduction into the payments industry in its part 1 post on Adyen

Nice Write-up on Ashmore Plc, a stock I also owned in the past

Interesting Forbes Feature on TransDigm and its CEO

Todd Wennings new “Flyover Stocks” blog starts with an interesting Spin-off story (Worthington Industries)

A very interesting look at how net interest margins at banks behave during and after increases in overall interest rates

A great reminder why Insurance Loss Reserves are crucial for understanding Insurance companies

Tamburi Investment Partners (ISIN IT0003153621) – NAV vs. “Intrinsic Value”

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Tamburi Investment Partners (TIP) is kind of a “secret star” in the area of European Holding companies. I looked at it briefly within my Italmobiliare write-up friom last week. The stock price has performed extremely well especially over a 10 year horizon:

TIP has been founded in 2000, listed in 2005 and the history is well documented on TIP’s homepage.

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Italmobiliare (ISIN IT0005253205) – Buying “Italy’s Finest” for only 50 Cents on the Euro ?

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

What better day to publish a post about an Italian company than Ferragosto, the Italian Public Holiday where virtually any Italian family is somewhere close to a beach and Italian offices only are staffed with the most junior person to take up the telefone in order to say: “No one here, please call next week/next month”.

With Italmobiliare, I fell deeply into a rabbit hole, which lead to a quite extensive analysis. Due to some problems with the WordPress editor, I wrote it with a different Editor and have attached the PDF with the full version. In the blog post I’ll focus on the executive summary, the Pro’s and Con’s and the return expectations. The rest of the gory details can be read in the attached PDF document.

vo-im-write-up-15.08.2023Download

Executive summary:

Italmobiliare (IM) is an Italian Holding company with a market cap of ~1 bn EUR that underwent 2 pivots in its 40 year history as a listed company. The first pivot, in the 1990s, from conglomerate to Cement (Italcementi) and then once again in 2017 after a 2 bn sale to Heidelberger into an Italy focused, “Quality-growth small/mid cap PE” style investment company.

What makes the company very attractive to me, is a very interesting portfolio (including at least two potential “Super Star” holdings), decent value creation, good strategy/transparency  and especially a 50% Discount to NAV. 

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Some links

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The hype around LK-99 was short lived. Nevertheless, the history of Superconductors is really fascinating and I think there is reason for optimism.

Some interesting thoughts on why “Generative AI” could go the same way as LK-99

Interesting long read on the concept of “Late Bloomers”, which are people that find their true calling later in life.

ANother interesting long read on everything you need to know about subsea internet communication cables

“White Hydrogen”, i.e. Hydrogen naturally trapped underground, might become a thing

Seth Klarmann has been leading the effort to update Graham& Dodd’s “Security Analysis”

Hunter Walk predicts “more pain to come” for the valuation of VC portfolios, despite the public market rebound