Category Archives: Anlage Philosophie

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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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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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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Eurokai 2024 Shareholder Meeting & a short look at Hutchison Ports Holdings Trust

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Eurokai Shareholder Meeting in Hamburg

    This week I did something I didn’t do for some time: I visited an annual shareholder meeting, in this case that of Eurokai in Hamburg. The main reason was to get a better impression of Tom Eckelmann, the 6th gneration family CEO who took over last summer.

    Apart from the venue (Hotel Hafen Hamburg) with great views over the harbour in Hamburg, these were my main take aways (AGM presentation in German can be found here) :

    • Business in the first 5 months is doing (much) better than expected. This is the chart from the AGM showing the amount of containers:

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    All Belgian Shares part 6 – Nr. 101-120

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    With this post, we crossed the “half-time” mark for the Belgian Stock Market. Among these 20, in random order selected stocks, 6 made it onto the watch list, among them a former holding of mine. Let’s go:

    101. Newtree

    According to TIKR, this 17 mn EUR market cap company “provides chocolates, spreads, snacks, gifts, and coffee products. It also offers products through online”. On their investor website, annual accounts are only available to 2018. “Pass”.

    102. Elia Group

    Elia is th 6,6 bn EUR market cap operator of the Belgian Electricity transmission network. They also own and run 50 Hertz, one of the larger German transmission network operators. Electricity transmission networks are fully regulated assets, i.e. if the network is working, the owner gets a guaranteed return based on the “Regulated Asset Base (RAB)”.

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    The German Mittelstand is maybe Down but not Out: Hermle AG – Hidden Automation Champion from the â€œLĂ€ndle”

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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 “LĂ€ndle”) 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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    Eurokai KGaA (ISIN DE0005706535) – Playing the “Time arbitrage game” with the possibly cheapest Port Stock in the World 

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

    Some reason for not reading this post:

    • You have already posted YTD Performance numbers on FinTwit
    • You don’t like capital intensive stocks
    • You don’t like cyclical stocks
    • You prefer stocks that have positive share price and/or fundamental momentum
    • You require short term catalysts/Share buy backs/activists etc.
    • You like simple businesses with simple structures
    • You think Germany/Italy/Europe is going down the drain anyway

    In such a case, do yourself and myself a favor and move on.

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    All Belgian Shares Part 1 – Nr. 1-20

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    Hello Belgium, here I am !!!
    As in my previous series, a random number generator will determine in which order I will look at the roughly 210+ shares.

    One initial remark on the “Expert Market” Segment: This is a very illiquid segment of stocks that are traded only once a week (Tuesdays) in an Auction. Some stocks haven’t traded for years. Sometimes very little or no information is available for these companies. In this series, I will only take a closer look at those Expert market stocks that have been trading at least once in 2023. The others I will only mention briefly. As the Expert market is almost 50% of the universe, there will be a lot of very short reviews.

    Let’s go !!!

    1. TPF Contracting (Expert Market)

    TPF Contracting SA provides design, management and supervision, and asset management services for public and private clients in Europe, the Americas, Asia, and Africa. It offers its services for transport and mobility, buildings and cities, and environment and water sectors.

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    A very quick Champagne Peer Group Check (Laurent Perrier, Vranken-Pommery, Lanson BCC)

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    For the new year, one of my todos was to check the other two listed Champagne Houses in France, Vranken-Pommery and Lanson BCC.

    As I mentioned in the original post, my main motivation to buy Laurent Perrier was that it’s name always showed up when I looked up Gerard Perrier.

    Using TIKR as a quick comparison tool, one can see, that the two other players; Vranken-Pommery and Lanson-BCC trade at even lower PEs than Laurent Perrier:

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    My 22 (+1) investments for 2024

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    Following an annual tradition, by the end of the year, I review my portfolio by writing/updating very short summaries for each individual position.  16 of the 23 positions from last year are still in the portfolio and I have added 7 new positions. That turnover has been partially driven by exits/take-overs (Schaffner, Logistec) and by finding new ideas. A more comprehensive Performance review will follow in early January 2024.

    A short user guide:
    My preferred style of investing is a bottom up approach, focusing on 20-30 small/midcap stocks that in my opinion have a good return/risk profile over the next 3-5 (or more) years. Many of these stocks are not household names and are unlikely to make spectacular gains in any single year. Many of them look interesting only after the second or third glance and are rather boring, which is exactly what I am looking for. So if you are looking for a “Hot stock for 2024”, this post won’t help you much.

    And always remember: THIS IS NOT INVESTMENT ADVICE. PLEASE DO YOUR OWN RESEARCH.

    As a special service and to offer something “fresh”, I have created a new portfolio overview chart based on holding periods which I proudly present here:

    The summaries of the previous years can be found here:

    My 23 Investments for 2023
    My 28 Investments for 2022
    My 21 (+6) Investments for 2021
    My 20 investments for 2020
    My 22(+1) Investments for 2019
    My 21 investments for 2018
    My 27 investments for 2017
    My 27 investments for 2016
    My 28 investments for 2015
    My 24 investments for 2014
    My 22 investments for 2013

    Let’s go:

    1. TFF Group (Portfolio weight 7,4%, Holding period 13,0 years)

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