value and opportunity

Introduction

After the great fun of doing the “All German shares” Series in 2019/2020, It is time to start the new “All Swiss Shares” series in 2021. According to the Swiss Stock Exchange, there are currently 220 Swiss based listed companies, so the series will be a little bit shorter. The reason for choosing Switzerland is that I actually own already two Swiss based companies (Richemont, Zur Rose) and that I think there is an interesting mixture of companies in Switzerland, several of which I have covered over the last 10 years.

Again, mostly for my own entertainment, I will use a random approach in looking at the companies.

One difference to the German series is that I’ll try to better define what I am looking for. In principle, my portfolio comprises three different styles/buckets:

1. “Long term holdings” – Stocks where I think there is good long term potential. For this group, I require high quality with regard to the business model, leadership and balance sheet
2. “Value Trades” – Stocks where I think for some specific reasons there is a significant undervaluation that will materialize in a period of up to 3 years. This could be a “sum-of-part” situation, a spin-off, activist involvement or another situation where I think that I can identify the reason for the undervaluation and where I have a different view. Due to the shorter time horizon, the requirements for “quality” are a little bit lower.
3. “Special situations”  – in my definition, special situations are based on corporate actions (M&A, Squeeze out etc.) where the potential outcomes are clear and the main task is to assess probabilities and an expected value.

 

So now let’s jump into the first 10 stocks. Surprisingly, I found already 4 stocks worth “watching” out of the first batch.

1. BVZ Holding AG

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Finally !!! This post will cover the remainder of the German stock universe. These remaining “newish” companies only yielded two watch list candidates Overall, I need now to slim down the watch list significantly to maybe 25-30 companies that I want to keep on my radar screen, but that will take some time.

As for the next country series (as time allows): My next target will be Switzerland. First, it is a smaller market with only around 240 local stocks according to the SIX, Secondly, I have currently  3 Swiss stocks in my portfolio (Zur Rose, Richemont, Dufry), so I have some hope that there are more interesting stocks on the Swiss market.

So enjoy the last batch of German stocks !!!!

776. Centogene AG

Centogene is a “rare disease” reseacrh company that seems to be a mixture of German/Dutch locations. The company went public on the Nasdaq in November 2019 at USD 14/ Share but lost around -30% since then. The market cap seems to be around 250 mn USD. Unfortunately not my area of competence, “pass”.

777. Cyan AG

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And another 25 (almost) randomly selected stocks. This time 5 stocks were in my opinion worth “watching”. As it looks now, there will be only one more post in this series.

726. Smart Equity AG

A 1.7 mn EUR market cap company that calls itself “Experts on Crypto currencies”. “Pass”.

727. InnoTec TSS AG

Innotec is an 88 mn EUR market cap supplier to the construction industry. The company had a nice run up, increasing more than 10x from its low in 2009 until early 2017 as we can see in the chart:

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And again 25 more randomly selected German shares with short analysis for each one. This time, seven (!!!) candidated were worth “wacthing”.

Maybe one remark: I asked last time for suggestions for the next series. however before I move on, I will also need to thin down the watch list to an amount that I can handle going forward. At the moment, the extended watch list comprises 141 (!!) stocks which I want to slim down to something like 25 or so.

676. mwb fairtrade Wertpapierhandelsbank AG

mwb is a 33 mn EUR market cap securities trading company. For some reasons, the stock price doubled in 2020, mabye a result of overall trading activity. As I do not undertand their business model, I’ll “pass”.

677. Bayerische Motorenwerke AG 

BMW is clearly one of the most famous German brands and one of the most successful car manufacturers in the world. With a market cap of ~39 bn USD, it is valued at a fraction of Tesla and the stock price is on a pretty long lasting downtrend:

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Time flies, it’s more than a month since the last posting of this series. So another 25 randomly selected German stocks. Despite the usual duds, the dices this time brought up 6 stocks that I found in principle worth watching.

With “only” around 100 stocks left, I need to think about another market/area that I will cover in this systematic way. Suggestions highly welcome !

651. IFA Hotel & Touristik AG

IFA is a 242 mn EUR market cap company that has rarity value: I think it is the only remaining listed German stock that represents a “Hotel pure play”. However there are a few specialties to consider: The company is majority owned by the Spanish Lopesan Group. Lopesan did a lot of related party transactions with other Lopesan entities and IFA did a couple of capital increases without real necessity.

So far, there doesn’t seem to be any indication that Lopesan has screwed minorities. Some of the “Trades” were actually quite profitabel. Nevertheless, the stock is on a 2 years downtrend that just accelerated due to Covid-19:

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Another week, another 25 randomly selected German shares. This time, I only found 3 of them to be interesting, however one stock became the biggest position in my German basket yet.

626.Pommersche Provinzial-Zuckersiederei AG

Pommersche is a 2.3 mn market cap company that is very illiquid and only releases very intransparent information. “Pass”.

627. Netfonds AG

Netfonds AG is a 63 mn EUR market cap company that could describe itself as a “Fintech” if they wanted. The company listed directly (no IPO) in 2018 and at first struggled:

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