Category Archives: Anlage Philosophie

Mikron Group AG – Super Cheap (EV/EBIT ~4) and +33% EBIt 6M 2023- what is not to like ?

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

Spoiler: If you are short on time: I did not buy a position here. No need to read everything.

Mikron is a company that I had on my (passive) radar since my “All Swiss shares” series some years ago (since I passed on it, it made around +100%, so keep this in mind for the rest of the post). It is a Swiss based machinery manufacturer with a market cap of 200 mn CHF and has some connection to SFS (SFS is a client, same Chairman in the past).

These were the main items that motivated me to looks deeper into Mikron this time:

+ currently very (very !!) cheap (P/E 7,5, EV/EBIT 3,5)
+ currently VERY good business momentum (6M 2023: Sales +22%, EBIT +33%)
+ better customer/product mix than in the past
+ Rock solid balance sheet (100 mn CHF cash vs 200 mn CHF market cap)
+ good share price momentum

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The Social Chain Cash Flow Shenanigan- Could that one have been spotted ?

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Disclaimer: This is not investment advice, just a tiny little bit of “forensic analysis”.

The Social Chain, an initially hot, but now busted “Social Media DTC” company was recently subject to an intervention from German regulator BAFIN, claiming the 2021 accounts contained a material error in the Cashflow statement.

In essence, BAFIN said that The Social Chain’s Operating Cashflow did contain ~60 mn EUR of non-operating cashflow items that should have classified either as Financing and Investing Cashflow.

Why is that important ? Many investors (myself included) consider “Free Cashflow” as a very important metric. Free cashflow consists of Operating Cashflow minus Capex and is generally considered to be less easily manipulated than accounting numbers (“Adjusted EBITDA before costs to build the product”).

Looking at the headline numbers from the 2021 annual report, we can see that despite the “adjusted pro-forma” numbers, the +22 mn Operating cashflow compares to -23mn EUR in EBITDA and -82 mn EUR Net income and seems to generate the impression that the underlying business is cash generating, as the investment cashflow was mostly M&A:

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The return of the “Freedom Energy basket”: ABO Wind vs Energiekontor (BUY)

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

Background:

Some of my readers might remember, that I bought into a “Freedom energy” basket in March 2022 in order to “hedge” against potentially catastrophic effects from the Russia/Ukraine war. After a first nice run, I sold 3 out of the initial 4 (7C Solar, PNE, Energiekontor and ABO Wind) and only kept ABO Wind because I considered it the most undervalued stock.

Looking at the chart we can see that for some of the stocks of that basket, not so much happened, only PNE is still significant above the level of March 2022 (ABO Wind is the solid Yellow chart):

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All Norwegian Stocks Part 11 – Nr. 151-165

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And on we go with yet another 15 randomly selected Norwegian share. Despite many uninteresting or crappy companies, again 2 made it onto the preliminary watchlist. Have fun !!

151. Sogn Sparebank

With around 8 mn EUR market cap, Sogn Sparebank seems to be the smallest Sparebank so far. Maybe interesting for people who live in Årdalstangen, where it is loctated, but not for me. “Pass”.

152. Aqua Bio Technology

From the name alone, I assumed that this 5 mn EUR market cap company would be a crappy 2021/2022 IPO and ….I was wrong. Rather it seems to be a crappy company that has been around for a little bit longer. The company has little income but consistent losses. “Pass”.

153. Norsk Solar

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All Norwegian Stocks part 10 – Nr. 136-150

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And on we go. With this post, I have passed the 50% threshold, so I am very optimistic to finish this before year end. This time, two stocks qualified for the preliminary watch list. Let’s go:

136. Norbit

Norbit is a 305 mn EUR market cap company has three distinct segment of which “Oceans delivers tailored technology to global maritime markets, Connectivity provides wireless solutions for identification, monitoring and tracking, while PIR offers R&D services, proprietary products and contract manufacturing.”

The company IPOed in 2019, and contrary to the 2020 IPO vintages, the share price has done quite well:

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Handelsbanken revisited – Learnings and what to do now ?

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This has become a quite long and somehow rambling post. If you look for “actionable investment advice”, then you don’t need to read this.

Background: Handelsbankon on the blog since 2015

One of the great things of an Investment Blog/Journal is that one can easily revisit everything that one has written years ago when I want to look at a stock again.

Handelsbanken is a stock that I have covered quite often since 2015. Initially, I compared Handelsbanken to Deutsche Bank in 2015, claiming that Handelsbanken is a much better run “quality bank” compared to Deutsche Bank and that Deutsche Bank, despite the much cheaper valuation, most likely the worse investment. This is how Handelsbanken has performed against Deutsch Bank and the European Banking index.

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Lopgistec Update – “Strategic review” consideratios

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With a small delay, a few thoughts on the “strategic review process” at Logistec, a stock I had written up and added to my portfolio two months ago.

Govro has already published an excellent post about the situation in his Wintergem Blog here. He estimates that a sale at ~9xEV EBITDA could result in an offer of CAD 76 per share. However, he points out that this is just the start of a process and it could well be that there will be no sale at the end, especially as due to the high interest rates, the infrastructure sector is not super hot at the moment.

The Logistec share price has increased from around 43 CAD per share before the announcement to around 60 CAD at the time of writing. Funnily enough, this is almost exactly half way between the “undisturbed price” and Govro’s sale price estimate.

Correcting a mistake: Extra Asset

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“Freedom Insulation” – Follow up and Basket Update (Sto, Steico)

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

Some days ago, I made the case for a significant increase in demand for insulation in Europe for the next several years. In this post, I want to dig a little bit deeper into the main listed players and which I find more interesting. In general, even only for the German speaking region there are many companies that offer insulation, among them very large, diversified groups such as BASF, Dow Chemical and St. Gobain.

However, the following listed companies are those who do the majority of sales in insulation to my knowledge:

Kingspan, Irleand/UK
Rockwool, Denmark
Recticel, Belgium
Steico, Germany
Sto SE, Germany

Sto, Rockwool and Recticel are already in my portfolio with relatively small weights.

Before jumping into the companies, I have compiled a table with a few KPIs that i find interesting. One quick coment upfront: As Recticel is undergoing a signifcant transformation, their numbers are curently not comparable.

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Schaffner Group AG (ISIN CH0009062099) – Is this “Meier & Tobler 2.0” ?

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

Summary:

If you would ask me about the most boring stock of my generally very boring portfolio, I would possibly name Schaffner Group. I had bought a first position back in 2021 during my “All Swiss Stocks” series.

However, I have never written a more detailed write-up despit my annual summaries (2021/2022 , 2022/2023), maybe becasue I always got bored when I started writing about it ? Over time I added to the position and after the most recent 6 months numbers, I decided to increase into a full position. Time to explain the investment case a little bit better.

  1. The Company – Transformation

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“Freedom Insulation” update – A Deeper Dive & Top Down market estimate

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Disclaimer: As I am an investor and not a Building & Construction specialist, this post might contain a lot of wrong or even misleading information. All I can say is that I do this on a “best effort” basis. DO YOUR OWN RESEARCH !!!!

Time flies. Already more than 7 Months ago, I introduced my “Freedom insulation” basket. Since then I had pruned the basket, mainly because of the contraction in the construction industry and currently I only hold Rockwool (1,1%), Sto (1%) and Recticel (0,6%). Back then, the underlying case for insulation was a very high level one, this time I want to dig a little deeper and substantiate it if possible.

Regulatory background:

Just a few weeks ago, the EU Parlament passed a quite impactful law, basically requiring the “energetic renovation” (and insulation) of old buildings within the next 4-10 years. The most important part is that for each EU country, the worst 15% of buildings must be thoroughly renovated by 2027 (commercial) and 2030 (residential), with even stricter rules after another 3 years.

As this is Europe, the details of this law now need to be discussed with each and every member country and for sure, there will be excemtoptions and delays, but the direction is clear: There will be a strong push towards renovations which in turn will require a lot of insulation. Naturally, with the Green Party in charge, Germany has passed already some laws that require property owners to do something quickly, like for instance baning Oil and gas heating from 2024

What happened to insulation stocks since then ?

Interestingly, this hasn’t helped insulation stocks at all, as the stock charts below show. Over 1 year, insulation stocks significantly underperformed the broad construction index, since my post in September performance was on average “in line” (yellow is Steico):

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