This is not investment advice. PLEASE DO YOUR OWN RESEARCH !!!
Extra Health Warning
I guess some old time readers will think: Now that guy really lost his marbles or so. I have very little knowledge about Biotech companies and the industry in general and nothing qualifies me to write about a Biotech stock. My only experience with Biotech companies during the 10 years of the blog was Swiss based Actelion, but only as a special situation with a Spin-off component. So you might take this post as a warning signal that markets have become overheated and the author of this blog has indeed lost his marbles.
Despite my limited experience and understanding of the sector, I do think that BioNTech represents an interesting “bet” on the success of the underlying mRNA technology and the ability of BioNTech to establish (or having already succeeded) a platform that will yield much more than just this one blockbuster Covid-19 vaccine but many other successful vaccines and cancer drugs (and more). Their intention to become a “full fledged” pharmaceutical company could be the start of a long “Compounding story” if successful, but there are also clearly many risks involved.
BionTech history IPO & “Pivot”
The Auto1 IPO
Tomorrow, Auto1, the new German “Mega Unicorn” will go public and trade for the first time. At the upper end of the current book building range (38 EUR/share), which turned out to be the IPO price, the company is valued at almost 8 bn EUR. And that is before the expected “pop” at the IPO.
The company has currently 173 mn shares outstanding and will will issue 31.25 mn new Shares for around 1 bn that will go to the company. Another 15,625 mn shares will offered by existing shareholders, including the founders and the management.
As I will line out in the post, despite the very different sector (used cars), the underlying business model is somehow similar to Just Eat Takeaway.com (JET), a stock I have written about recently. The aim of this post ist to compare the business models of Auto1 and JET and to also compare the valuation the market grants to these 2 companies.
Spoiler: there will be no “actionable insights” in this post.
Auto1 business model
By coincidence, I downloaded this book before I got interested in Play Magnus a few months ago. However this clearly motivated me to move the book to the front of the reading list…..
Garry Kasparow has been named as one of the greatest Chess players of all time and became Chess world chmapion in 1985 at the age of 22 and held the title over 15 years. After his chess carreer, he surprisingly went into politics. As a funny side note: Kasparov was involved in founding the first online chess company in 1999. In between he coached younger chess players, for instance Magnus Carlsen in 2009.
In this book, Kasparov tries to transport strategic lessons from Chess into fields like business, politics and investment. In between he also covers his greatest matches, hardest opponents (Karpov !!) and the lessons he learned both, from victories and defeats.
Disclaimer: This is not investment advice. PLEASE DO YOU OWN RESEARCH !!!
Alimentation Couche-Tard (“CT”) is one of the historically best performing Canadian companies, operating gas stations and convenience stores around the world with a focus on North America.
The company currently looks like a very interesting GARP (growth at a reasonable price) stock. Over the last 10 years, the company showed exceptionally good numbers: 23% EPS CAGR and 10 year average returns on capital >20% (23% ROE, ~20% ROCE). The business model is very resilient, Covid-19 actually led to an increase in margins and profits, both on the convenience store segment as well as in fuel despite declining sales.
As part of an improved investment process, I will try to write better “post mortem” analysis after exiting an investment. I did this in the past especially for bad investments but I plan to do this now for every investment that I fully exit. Interestingly, very few fund mangers talk or write in detail why they have been selling.
Installux post mortem:
As mentioned in the comments of the original post, I sold my Installux shares yesterday at around 390 EUR, netting a total gain of 206% or ~13,7% p.a. over ~ 8.5 years.
Installux was my second longest standing position in the portfolio. I was able to buy the shares cheaply mostly on a “mechanical basis” in 2012. This was my summary back then:
We have a consistently growing and profitable business with very low volatility, attractive ROE and ROIC and a valuation of 2x EV/EBITDA and 5x P/E adjusted for cash (7.8 unadjusted) which produces a large amount of free cashflow despite growing nicely over the years.
So what happened since then ? This is how the stock price looks like for the last 10 years: