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.
Novo Nordisk is a company which has been on my radar screen for a long time. The company is well-known and clearly a “high quality” company. A quick list of why the company is a favorite of many investors and has delivered 22% p.a. over the last 20 years:
Readers of my blog know that I do like “outsider” like financial companies and that I do like UK banking (Handelsbanken Lloyds).
Therefore it was highly interesting to read about Metro Bank, a recently listed “UK Challenger bank” in a letter of an investor I greatly respect. I had a look at “online only” UK challenger Bank Aldermore but didn’t like it too much, but as Metro Bank runs a “Branch strategy”, I decided to look into them.
Would you consider to invest into a company which at every occasion states the following:
AQ possesses no amazing patents or other security, we rely on having the best crew.
For a “Buffett/Munger” style value investor, this would be tough as there is clearly no moat or anything close and according to Buffett, the business economics always win in the long run, no matter how well a company is run.
Welcome to AQ Group, a Swedish “non moat” manufacturing company
In my previous post on capital allocation, I had mentioned SAP as a company which might have overpaid for an acquisition. A reader commented that SAP is a good capital allocator because they increased EPS over the last 10 years.
Increasing EPS itself in my opinion is not a “proof” for good capital allocation. Actually, this itself says nothing at all. If you have a stable business, just retaining earnings and doing nothing will increase EPS as long as interest rates are positive. Good capital allocation is when you create value from retained profits.
The best way to find out if value is created is to look at how returns on equity and return on capital develop over time.
Let’s take a look at SAP over the past 17 years with some per share numbers: