Category Archives: Anlage Philosophie

Just Eat Takeaway.com (JET) Update – “The attack of the 10 minute delivery services”

Intro/Background:

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.

What changed

New competitors – It’s getting crowded 

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The Energy Transition basket: Are Cables the new “Shovels” ? (Prysmian, Nexans, NKT)

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

Background:

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.

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All Swiss Shares Series Part 4 – Nr. 31 – 40

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:

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All Swiss Shares series Part 2 – Nr. 11-20

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:

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Tekmar PLC – Hidden “Off-shore” Champion or Cheap for a reason ?

Introduction:

At a very first glance, Tekmar Plc, a AIM listed UK company looks like a very interesting “hidden Champion”:

The company is active in a very attractive market: their main business is to provide sub sea protection systems for cables with its biggest entity providing this service to the fast growing off-shore wind farm market.

In addition, Tekmar claims to have 75% market share. the combination of a company providing an essential, relatively small ticket item to a large installation with a dominating market share makes many investors water their mouths I guess.

Even more mouthwatering looks their chart from the 2020 annual report (from August 2020):

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The new “Energy Transition” Basket Part 1 – (Siemens Energy, Orsted, AKer Horizon)

Background:

As some of my readers might have noticed, I have been looking deeper into the topic of renewable energy and connected topics such as Climate change, Net Zero targets etc.

My current conclusion is that we might have reached a real “Tipping point” towards a significant increase in “Electrification” which in my opinion is driven by a confluence of several factors:

  • The cost of renewable energy (esp. Solar) has been dropping by -90% over the last 10 years and is still dropping further. Solar is (c.p.) now the cheapest available resource of electricity on the planet
  • Battery technology is making leaps and prices are dropping as well quickly, very similar to solar energy
  • A few major electric appliances are already better or almost equal compared to fossil alternatives (Electric heat pumps already now, EVs in very short time, DRI & Electric arc furnaces for steel, Green ammonia etc.) 
  • Money is flowing into the sector like never before, driven by ESG considerations
  • Governments are pushing into the same direction. Europe so far has been leading, but under Biden the US is pushing hard
  • interest rates are low which makes creating new infrastructure cheaper than never before

There remain a lot of challenges, especially the “intermittency” of renewable energy and the current lack of solutions for longer term storage. However, especially in the battery space there is significant progress made. Plus, all the billions now flowing into “Green tech” will create a “Cambrian explosion” of new technologies in a few years time. 

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The “All Swiss Shares” Series Part 1 – Nr. 1-10

Introduction

After the great fun of doing the “All German shares” Series in 2019/2020, It is time to start the new “All Swiss Shares” series in 2021. According to the Swiss Stock Exchange, there are currently 220 Swiss based listed companies, so the series will be a little bit shorter. The reason for choosing Switzerland is that I actually own already two Swiss based companies (Richemont, Zur Rose) and that I think there is an interesting mixture of companies in Switzerland, several of which I have covered over the last 10 years.

Again, mostly for my own entertainment, I will use a random approach in looking at the companies.

One difference to the German series is that I’ll try to better define what I am looking for. In principle, my portfolio comprises three different styles/buckets:

  1. “Long term holdings” – Stocks where I think there is good long term potential. For this group, I require high quality with regard to the business model, leadership and balance sheet
  2. “Value Trades” – Stocks where I think for some specific reasons there is a significant undervaluation that will materialize in a period of up to 3 years. This could be a “sum-of-part” situation, a spin-off, activist involvement or another situation where I think that I can identify the reason for the undervaluation and where I have a different view. Due to the shorter time horizon, the requirements for “quality” are a little bit lower.
  3. “Special situations”  – in my definition, special situations are based on corporate actions (M&A, Squeeze out etc.) where the potential outcomes are clear and the main task is to assess probabilities and an expected value.

 

So now let’s jump into the first 10 stocks. Surprisingly, I found already 4 stocks worth “watching” out of the first batch.

  1. BVZ Holding AG

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Panic Journal – Final edition

It is now 14+ months since the “Covid-19 panic” set in and that I started the “Panic Journal” mini series. After season 1 and 4  episodes of Season 2, I think it is now time to close the series. Of course, Covid-19 is not over yet and currently in India the Virus is rampaging as never before.

However for the stock market it seems, the Virus and the pandemic is “last year’s news”. I think there is some small risk that some of the virus mutations could be a problem, on the other hand, the “magic” of the mRNA vaccine seems to be a decent risk mitigation factor.

So looking back, what are the major learnings/surprises for me from a investment perspective ?

  1. Buying the dip has worked again beautifully

A whole generation (or even two generations) of investors now has first hand experience that for the market overall, buying the dip always works. Personally, I have started my first “baby steps” in 1987 and even back then buying into the crash was a good opportunity.

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Performance review Q1 2021 – Comment: “Age and Investing skills”

In the first 3 months of 2021, the Value & Opportunity portfolio gained  +7,6% (including dividends, no taxes) against a gain of +7.9% 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 2021:

Partners Fund TGV: +17,5%
Profitlich/Schmidlin: 5,34 %
Squad European Convictions +9,52%
Ennismore European Smaller Cos +6,08% (in EUR)
Frankfurter Aktienfonds für Stiftungen 7,27%
Evermore Global Value  7,85%USD)
Greiff Special Situation 1,87%
Squad Aguja Special Situation 6,49%
Paladin One
4,75%

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