JustEat Takeaway.com (JET) is one of my riskier bets as I outlined in my initial post from January. In a nutshell, the thesis was that JET has reached a dominating position in running a food delivery market place in many countries (among them Germany, UK, Canada etc.), has got an extra kick from Covid-19 lock downs and will begin to make money soon, similar to their home market Netherlands. Within JET’s business, Germany clearly looked like the most promising market as it is a big and growing market and they are the only player left.
This is supported by the assumption that JET’s main competitors (Uber, Deliveroo, DoorDash) are now stock listed and need to stop burning money. The assumption was also, that despite offering own delivery as a feature, in the long run JET will manage to dominate the Market place business model which is more profitable than actually employing drivers.
Since then, the stock hasn’t done that well, despite having released very encouraging top line growth numbers which motivated me to even increase the position from 2% of the portfolio to 3% (at cost).
With today’s closing of the Grubhub deal I think it is worth trying to do a quick update.
New competitors – It’s getting crowded
Disclaimer: This is not investment advice. PLEASE DO YOUR OWN RESEARCH !!!
I am currently trying to build up exposure to what I expect to be a long term trend towards electrification (see the first post). As I am still learning on the way, I decided to start with a “basket” approach where I try to build a basket of (lower weighted) potentially interesting stocks and then dive deeper during the following months/years So the initial analysis will be a little bit more shallow than usual.
This should be seen as a “scientific experiment”, so it could easily be that I find out that some (or all) of the positions don’t make any sense and I will sell them.
An alternative would be to read for months/years, write down a lot of stuff and then come out with a few “conviction investments” but that path is more difficult for me to implement. I prefer to get my toes into the water early in order to remain motivated.
As the whole effort in this sector/industry is about building up the infrastructure of the future, many of the companies will have a capital intensive business model. Of course I would prefer capital light business models at super low valuations but I haven’t been able to identify any yet.
Finally I am aware that I am maybe a little bit late to the party, but my expectation is that the party will last for a long time.
Are Cables the new shovels ?
During the Wild West Gold rush, there was the famous saying that the surest way to get rich in the gold rush was not to dig for gold but sell shovels to gold diggers. The deeper meaning of this saying is in my opinion, that in a situation similar to a gold rush you can make a lot of money by selling relatively ordinary things to people who desperately need them if there is a (local) shortage of these items.
Another week, another 10 Swiss stocks, this time with one stock to “watch”.
31. Plazza AG
Plazza is a 581 mn CHF market cap real estate company that invests in and around Zurich. The company seems to trade close to NAV and as a rule I normally don’t consider listed real estate as part of my investment universe, therefore I’ll “pass”.
32. Komax AG
Komax is a 831 mn CHF market cap company that supplies cable automation machines to mainly car manufacturers but also the Aerospace industry as well as other industries. As a automobile supplier, business suffered already in 2019 before getting hit again in 2020.
The stock chart shows a significant cyclicality which is not a surprise:
Another week, another 10 randomly selected Swiss stocks. This time, two of them made it onto my watch list.
21. Basilea AG
Basilea AG is a 569 mn CHF “biopharma” company that was spun off in 2000 from Roche. Other than for instance Actelion, Basilea doesn’t seem to be a big success when looking at the share price:
And the next batch of randomly chosen Swiss stocks, however this time I only identified one potential “watch list” candidate.
I do have to say that I enjoy this kind of research a lot. After looking now at 20 stocks so far I have to say that reporting quality is generally a lot better than for German companies, independent from the size of the company.
11. Varia US Proporties
Varia is a listed property company that only invests in US real estate with a market cap of ~380 mn CHF. They seem to own a diversified portfolio of resdidential units. The company seems to be a “yield vehicle”, with relatively large distributions but little increase in NAV. As I am not a fan of listed real estate in any case, I’ll “pass”.
12. Lonza Group
Lonza is a 42,3 bn CHF “large cap” chemical and pharmaceuticals Group. What makes the company interesting is the fact that over the last 10 years, the share price has risen by around 10x: