Author Archives: memyselfandi007

The curious case of the imploding UK Battery Storage Funds (GRID, GSF)

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Management summary:

If you are looking for actionable investment insights, you can skip this post. This post is more about satisfying my own curiosity why the two UK traded battery funds have been doing so badly in the recent months. In the unlikely case you are interested in that, I invite you to read on.

The UK was for some time a lighthouse country for rolling out “grid scale” Battery Energy Storage Systems (BESS) in Europe. Relatively benign regulation and support schemes allowed a significant amount of BESS capacity to be developed in the UK, well ahead of other European countries.

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Some links 14/2024

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Prof. Damodaran with some reflections on how AI will impact the investment analyst profession

Nice deep dive into recently UK listed CK Infrastructure from Bos Invest

Cliff Asness from AQR thinks that markets have become less efficient over time

Remitly looks like a potentially interesting Fintech stock

The boom time of dating apps is (long) over

The rise and Fall of NFT trading venue OpenSea mirrors the NFT market

In the US, “professional whistle blowing” seems to be a very lucrative career path

Admiral post mortem & Sto SE 6M results

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Admiral Post mortem:

A few weeks ago, after the 6M numbers, I sold out of Admiral, after holding it for ~10 years. I already had updated my thesis in 2022 where I “re-undwerwrote” the stock for 3 more years.

So why now selling it just after 2 years ? First, the stock price nicely recovered from 17,5 GBP per share 2 years ago to around 30 GBP when I sold after the earnings announcement. Secondly, it seems that Admiral is really not able to “copy&paste” its formula outside the UK.

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A quick look into the Lineage Cold Storage IPO prospectus

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As mentioned in my STEF write-up, US Cold Storage company Lineage went public a few days ago and was able to do so quite successfully.

As IPO prospectuses often contain some quite interesting information, I wanted to quickly look through and extract what I find interesting. Especially on a hot day like today, reading a lot about cold storage is quite comforting 😉

Valuation

Let’s look at the new price point we got through the IPO. Unfortunately, Lineage Cold Storage is not yet available in TIKR, so let’s hae a quick look at comps “by hand”:

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All Belgian Shares – The Grand Final

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As promised last time, this is the summary post for the “All Belgian Shares” series. If you click this link you will see all 10 posts as Blog search results.

In the end, I put 28 stocks onto my larger watchlist.

As my watch list got honestly too long and unproductive, I started to manage my watchlist more systematically so that I can hopefully prioritize things better in the future. The main feature of my new watchlist design are 2 main inputs:

  1. A Quality score between 0 (shitty) and 9 (perfect) based initially on a high level assessment of factors that I find relevant
  2. A rudimentary caclulated fair value and a resulting upside potential

In a later post, I will this explain a little bit more in depth, but here is the result for the 28 Belgian shares that I will continue to track in one way or the other:

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Private Equity Mini Series (1): My IRR is not your Performance

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These days, more and more offerings for Private Investors are popping up to participate in Private Equity, which until now was mostly exclusive for Institutional investors and very wealthy people. In Europe, the socalled ELTIF II format allows now fund companies to directly target individual investors from as low as a few thousand EUR.

Private Equity in my opinion has its place. The good Private Equity funds are indeed “value investors” that have a decent ability to identify undervalued assets. However, Private Equity Investing also is not directly comparable with investing into public markets.

In particular, any prospective investors should take any returns stated by PE funds with a grain of salt and I want to explain why these “PE IRRs” cannot be directly compared with Stock market performance. This is due to 2 main differences:

Critical point 1: IRR calculation – critical assumption: Reinvestment at the IRR is possible

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Some links 13/2024

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TGV Partners 6M letter (Midwich, Fila)

Pernod Ricard is selling its Wine business and an interesting summary on how restaurants price their wine lists

Margins of Asset Managers continue to shrink due to high costs

Interesting and very bullish presentation from Coatue on the “Gen AI Super Cycle”

Very interesting post from Klement on Investing on the optimal size and discance to the coast of Offshore windfarms

Sweetstock investing with a write-up on an Australian Filling station operator called Viva Energy

Emerging Value with a quick look at Swatch Group

All Belgian Shares part 10 – Nr. 181-196

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This is the last batch of randomly selected Belgian stocks. As in the other “All Shares” series, there wil be a summary post where I will trim down the preliminary watch list to a more manageable short list. This time, 5 companies made it onto the preliminary watch list. So far I haven’t decided on a new country yet.

181. Reibel

This seems to be an almost zero worth shell of a bankrupt company. “Pass”.

182. Oxurion

This 1 mn EUR market cap Biotech company doesn’t look very convincing. “Pass”.

183. Tetrys

This 4 mn market cap company unfortunately has nothing to do with the famous Tetris game but is some kind of real estate development company. “Pass”.

184. Recticel

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Performance review 6M 2024 – Comment: “How do you know if your horse is dead ?”

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In the first 6 months of 2024, the Value & Opportunity portfolio gained  +1,4% (including dividends, no taxes) against a gain of +2,2% 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 2024:

Partners Fund TGV: +6,9%
Profitlich/Schmidlin: +5,4%
Squad European Convictions: 5,5%
Frankfurter Aktienfonds für Stiftungen: -0,9%
Squad Aguja Special Situation: +3,8%
Paladin One: +3,0%
Gehlen & Bräutigam: +4,3%

Performance review:

Some Performance reviews are more fun to write, some less so. This one is clearly in the second category.

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STEF S.A. (ISIN FR0000064271) – An “Ice Cold” Quality Compounder at a “bonkers bargain” price

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

As always with my more detailed writeups, I will focus on the general sections in the post and attach the full pdf for anyone interested in the details. And of course the Bonus Sound Track.

  1. Elevator pitch:

STEF SA is a pretty unique listed French company that runs a “temperature controlled” agrifood supply chain and logistics business across 8 European countries. Majority owned by its Directors and Employees (~72%) the company has compounded book value, earnings and dividends by 12% p.a. over the past 22 years with little or no impact from any of the big crises (GFC, Euro, Covid, Ukraine) that hit Europe in the meantime.

This business trades at an incredible low 8x trailing P/E which in my opinion, considering the track record, their growth opportunities and the “essential infrastructure” character is a “bonkers bargain”.

Some shorter term headwinds exist (interest rates, French politics, agrifood inflation), but in the mid- to long term the set.up for very decent shareholder return is excellent, with very limited fundamental downside, 

  1. Introduction:

I have looked superficially at STEF from time to time but for some reason, I never went deeper but kept it on my watch list. Only recently, when I scored my watchlist more systematically, STEF came out as pretty attractive. In addition, the current political tensions in France motivated me to dig deeper.

  1. The Company & The business

3.1. What Problem does STEF solve ?

STEF is active in “temperature controlled” storage and transport of food from the manufacturers to either wholesalers, retailers or restaurants. Many food items are perishable and the warmer the environment, the faster these items will go bad. In many cases, going bad can effect severe health problems for the ultimate end customer. STEF, with its triukcs and especially warehouses helps to keep food cool and fresh without incurring too high costs for this service.

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