Category Archives: Anlage Philosophie

Home Capital Group (HCG) – Contrarian Opportunity in Canada after being rescued by Buffett ?

hcg-logo-200x72

Background:

Home Capital Group is a Canadian bank/mortgage lending company founded in 1986 and run by the same CEO for 30 years, which came into the spotlight over the past few months. It ran into trouble, almost imploded and then got saved by no one other than Warren Buffett (and Ted Weschler).

There is good coverage following this link. The story in short:

Home Capital wanted to aggressively expand into insured mortgages. However at least one underwriter collaborated with mortgage brokers to get mortgages approved without proper documentation. At some point regulators reigned in but management did not tell shareholders about it. Then the regulator got tough and management had to go. In the meantime, short-term financing was pulled and the company got into real liquidity troubles.

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Trisura (TSU) – Interesting spin-off opportunity or intransparent minority mess ?

trisura

A friendly reader had mentioned Trisura as a potential Spin-off opportunity in the comments and the stockspinoffinvesting blog mentioned it a few days ago  and linked to a  Seeking Alpha write-up.

At first sight, Trisura indeed looks interesting:

  • it’s a small cap specialty insurer currently mainly active in Canada
  • it hasn’t been “discovered” by sell side analysts yet
  • only mini spin-off dividend for Brookfield holders (1 Trisura stock for 170 Brookfield stock(~0,3%)
  • the company has been growing very quickly over the last few years

This is from the listing prospectus:

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Venture Capital / Start ups: Why should you give a s*** as Value Investor ?

Disclaimer: It might easily be that If I look back at this post in 10 years and that this marks the peak of the current Venture Capital boom but who knows ?

Let’s start with a quick reflection on how to distinguish Value Investing vs. Venture Capital:

What is Value Investing ?
There are many opinions on what Value Investing actually is. There is “Graham” or “Klarmann” style value investing where one tries to buy existing assets at a discount, or ” Buffett style” where one tries to buy great and “moaty” companies at a discount to future earnings. My personal interpretation is to buy good companies at decent prices (something like a GARP strategy) or misunderstood companies. What all those approaches have in common that one tries to protect the downside by getting a “discount” on some perceived value. With regard to portfolio management, full diversification is rather the exception. In its more extreme version, concentrated value investors concentrate on mostly making sure that they don’t have losers in their portfolio and transact very infrequently.

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Northgate Plc (NTG): Just another vehicle rental/leasing company ?

northgate_logo

Business / Background:

Northgate is a UK based company that specialises in what they call “flexible rental” of smaller delivery vans to small businesses. My main interest in Northgate is not that I am so bullish on the UK and this sector, but that this company is somehow similar at least to the GoGetta part of Silverchef and I was looking for a peer company in order to be able to compare some metrics.

On a stand-alone basis, Northgate looks cheap:

Market cap: 570 mn GBP
P/E: 9,3
P/B: 1,1
EV/EBITDA 3,7
Div. Yield 4,1%

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Ashmore update – SELL

A few days ago, Ashmore issued their 2016/2017 annual numbers and annual report. Ashmore was my first Emerging Market investment three and a half years ago and I think it makes sense to check and update the investment case.

Performance so far was not exciting. Including dividends, I earned around 21,6% over those 3,5 years in GBP, in EUR around 12,7%. Compared to my overall portfolio performance of ~+48% in the same time period, Ashmore was clearly a underperformer.

This is how I justified the potential investment case back then:

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Bitcoin for (Value Investing) Dummies like myself

Background:
Some of my readers might have noticed that starting in the last year I have become more interested in Bitcoin and Cryptocurrencies. Don’t worry, I will not invest gamble with them but I do think it is important to understand what is going on in this area as this could change many things especially within financial services. As this blog functions primarily as my own diary, I have decided to do a few posts about my own learnings so far.

Bitcoin explained (maybe wrongly) in 10 Points:

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Universal Insurance Holdings (UVE) – Just punched by “Irma” or potentially knocked out ?

Universal Insurance is an US-based P&C Insurance company which has been on my extended watch list for some time now. Why ? Well, the company always traded cheap (single digit P/E), was very profitable (~31% ROE for the last 9 years on average) and growing strongly year by year (400% over 9 years). So from the outside this looked like a cheap but highly profitable growth stock.

The main reason why I didn’t analyze the stock further is that Universal is a specialized homeowner insurance company which almost exclusively operates in Florida.

The company has a market cap of currently ~620 mn USD.

Not surprisingly Universal now is in a tough spot as “Irma” is creating havoc on Florida as I write this post. The stock price has dropped by around -30% by Friday:

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