Business & Business model:
Amaysim is a 320 mn AUD market cap Australian company which went public in July 2015 and offers mobile subscription plans without owning the physical network in Australia. So they are effectively a reseller (like Freenet in Germany). As a specialty, they do not package the plans with “free” phones and long lock in periods, but offer “clean” and customer friendly contracts which can be canceled on a monthly basis.
Essentially, this is a distribution / billing service. Their value proposition both, for the networks and end clients is that they can offer this service better and cheaper than the networks. If they can do this, then it is “win win” for both sides.
This is part 2 of the Flight Centre analysis after the book review last week.
The “old” business model
The Australian based company is a classic “travel agency”, both, running physical agencies as well as offering airline tickets and tours over web sites.
A traditional travel agency usually works like this: They offer flights from preferred airline partners and hotels or packages also mostly from certain partner companies. Traditionally you would go into a travel agency and ask if they can recommend you a destination, then you would be offered some colorful catalogues where they list the offered hotels (with prices mostly depending on the official “star system”) and then gladly sell you the “Bundle”.
Already a couple of weeks ago, Handelsbanken issued their 2016 annual report. On the surface, the numbers look like a small disappointment with flat profit and a slight decrease in EPS.
Behind the surface however, some things happened. The CEO was fired in 2016 for “too much centralization”.
Some highlights of the annual report from my side:
- the number of branches in Sweden went down from 474 to 435
- the 4th quarter was very weak, but most likely driven by cost for branch closures in Sweden which happened in Q4. I liked this comment:
As I was trying to research a little bit how to value a pipeline of drugs still in development (Actelion spin-off), I stumbled across the so-called “Contingent Value Rights” (CVRs) which are often used in Pharma takeovers.
A CVR is somehow similar to a tracking stock with the exception that the CVR often tracks a more specific item such as a single product or in case of many Pharma M&A transactions, the outcome of a certain drug development project.
Acquirers and sellers sometimes use this instrument if they cannot agree on the value of an under development drug. The idea behind is that the seller keeps the upside and the buyer doesn’t need to pay upfront for some very risky future cashflows.
Sanofi/Genzyme Lemtrada CVR
When Sanofi took over Gynzme in 2011 such a situation crystalized. This is from a 2015 NYT story:
DISCLAIMER: THIS IS NOT INVESTMENT ADVICE. DO YOUR OWN RESEARCH !!!!!!
Almost exactly 1 year ago I started my exploration into the Australian stock market with DWS Ltd. and Silver Chef.
As some readers know, I didn’t buy DWS (I only put it on my watch list) and bought Silver Chef instead. Now, 1 year later it seems to be that I backed the “wrong horse”:
DWS is up +42,5%, SIV is down -19% (in AUD). So let’s look at DWS first.
Camellia Plc is a pretty odd company for UK standards. It is a conglomerate with interest in plantations around the world, as well as some engineering businesses, a UK cold storage business, a fish trader in the Netherlands and a private bank plus an art collection, a stock portfolio and other stuff.
Some UK blogs have covered Camellia like Richard Beddard and Expecting Value.
Camellia seems to be a favourite among deep value or “assets at a discount” investors and as I do like strange companies (and conglomerates) , I decided to take a deeper look at it. Also as it is in the same sector as ACOMO makes it easier to get “into it”.
Amsterdam Commodities (Acomo) is a Dutch based company which “trades and distributes agricultural products”.
The company went on my “to-do list” some time ago because at first glance it looked like a company which managed to grow nicely over many years by maintaining very health returns on capital.
This resulted in very healthy shareholder returns over the last years as we can see in the chart:
Including dividends, ACOMO Shareholders made 27,2% p.a. over the last 10 years and (10-bagger), 25,2% p.a. over 15 years (29 bagger) and 22,5% p.a. (60-bagger) over 20 years. So a real success story. Interestingly, despite these mind-boggling returns, only 2 analysts cover the stock according to Bloomberg.