Author Archives: memyselfandi007

The German Mittelstand is maybe Down but not Out: Hermle AG – Hidden Automation Champion from the “Ländle”

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As always with my longer write-ups, I will attach the full PDF below. In the post itself I will focus on the Exec summary, Pro’s and Con’s and the conclusion. And the Bonus Track of course at the end.

Executive Summary

Hermle AG is a typical “Hidden Champion” Mittelstand company from Southwestern Germany (Baden Wuerttemberg, the “Ländle”) that managed to carve out a very nice niche in 5- Axis CNC machines and connected production automation.  The company is able to earn industry leading EBIT margins (>20%) and Returns on Capital (>30%), has a Fortress Balance sheet and trades only at a relatively modest valuation of around 7,7x EV/EBIT.

The business is exposed to the economic cycle, but a combination of competitive advantages, a flexible cost base and a structural tailwind (Automation) make the stock attractive in the mid- to long term

Full PDF can be read & downloaded here:

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Performance review Q1 2024 – Comment: “Contrarian Investing – Easier said than done”

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In the first 3 months of 2024, the Value & Opportunity portfolio gained  +3,2% (including dividends, no taxes) against a gain of +6,0% 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 3M 2024:

Partners Fund TGV: +9,0%
Profitlich/Schmidlin: +4,0%
Squad European Convictions: 3,4%
Frankfurter Aktienfonds für Stiftungen: +5,9%
Squad Aguja Special Situation: +1,2%
Paladin One: -5,9%
Alphastars Europe: +0,6%
Gehlen & Bräutigam: -1,3%

Performance review:

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All Belgian Shares part 5 – Nr. 81-100

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Back from the Easter break with 20 freshly selected random Belgian stocks. This time, four made it onto the preliminary watch list.

81. MAATSCHAPPIJ VAN DE BRUGSE ZEEHAVEN (Expert Market)

At first I got excited, as this seems to be the Port of Brugge and the port seems to have grown over the years according to Wikipedia. And I do like ports.. But this stock traded last in 2015. It seems that at a higher level, the port has already merged with Antwerpes.

Unfortunately I did not find any financial information. “Pass”.

82. Mazaro NV

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All Belgian Shares Part 4 – Nr. 61-80

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And on we go, turning rocks and kissing frogs in the Belgian stock market. This batch of 20 randomly selected stocks yielded 4 watch list candidates, among them a stock I owned in the past.

So far, the “Expert Market” is a littlebit disappointing. For many of the companies there it is really hard to get infromation. But be assured, i won’t give up easily !! Let’s go:

61. Orange Belgium

As the name says, this 745 mn EUR market cap stock is the listed Belgium subsidiary of Orange Group, which owns 77% of the shares.

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Some links 09/2024

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Treasure Hunting with a nice write-up on Cornerstone FS

The Giverny Capital 2023 letter with some important lessons after investing for 30 years

Despite a few good IPOs, the PE industry is still struggling

Really nice write-up on UK specialty Chemical company Croda

Former Bond King Bill Gross is still writing letters

Interesting FT article on the development of Private infrastructure Equity as major asset class (search result)

A fantastic “Business model breakdown” of retailers from Edelweiss Capital

Some links 8/2024

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Rob Vinall’s RV Capital 2023 letter as always is a great read with soem controversial views (China, PDD, Carvana)

I have to admit that Augustusville “outbored” me with its write-up on German small cap Nordwest-Handels AG

Great list of the necessary attributes for a long term successful investment process from Flyoverstocks

A great reminder: Patience is key for long term investment success

Ben Carlson with 20 great lessons from 20 years of investing

Joachim Klement on “post eanings drift” in stocks that are dominated by retail investors

Good write-up on Var Energi from the “modern Investing” substack

Amadeus Fire AG (AAD.GR) – Come on and rock me Amadeus !!!

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

As in the previous write-ups, the full 13 page document is attached as PDF. Within the post I will present the Elevator Pitch, Stock Price/Valuation, Risks and Summary. And of course a bonus music track !!

Elevator Pitch:

Amadeus Fire is a 590 mn EUR market cap small cap business service company that offers temporary staffing and training for finance and IT professionals in Germany. The company is well managed, has a strong track record with 10% p.a. growth for many years, decent double digit margins, high returns on capital and strong cash generation combined with a clear capital allocation strategy. The current valuation at an EV/EBIT below 10x and an even lower EV/FCF at looks quite compelling for such a boring but high quality company. GARP at it’s best in my opinion.

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All Belgian Shares part 3 – Nr. 41-60

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Another month, another 20 randomly selected Belgian shares. This time, I found 3 stocks worth watching. The Expert Market so far is quite disappointing, but let’s see if there is maybe a gem or two among all the other stuff.

41. BPost

BPost with a market cap of 700 mn EUR seems to be the former state monopoly mail and parcel company in Belgium which is still majority owned by the Belgian Government. The stock looks cheap, but looking at the share price it seems to be more like a melting ice cube. Operating margins have been declining from 18% in 2013 to 5% in 2023.

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Some links 07/2024

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Wintergems Blog with another interesting Japanese Small cap write-up (Takeuchi)

Mat Roiss with a list of potentially interesting HK stocks

Some interesting takeaways from Fundsmith’s anual investors meeting

According to Stratechery, Google is at an existential crossroad

Great portfolio review from Carsten at Augustusville

A very interesting story on why Women in South Korea don’t want to have children anymore

Ted Giola on the “Dopamine Culture” promoted by the Big Tech companies

Some Links 06/2024

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Interesting Microcap-Turnaround idea from Treasury Hunting Substack – Innovation Food Holdings (IVFH)

Roland Head looks at Diageo as a potential Dividend stock (Spoiler: not yet)

Hong Kong looks even more dead than Germany these days (search result)

FTAlphaville on the recent “AI superstar” Super Micro Computer (Search result, Spoiler: No so super duper)

A good summary on what we know about long term Private Equity performance (Spoiler: It isn’t special after fees)

It seems that retail noise traders (aka “Apes”) have made shorting stocks systematically more dangerous

Interesting “post mortem” from Forager on a distressed deep value investment in Finland (Blancco Technology Group)

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