Category Archives: capital management

Saga PLC (ISIN GB00BLT1Y088) – High Quality Travel / Insurance Hybrid ?

The company:

Saga Plc is a UK company that combines two business that I have looked at quite often: Insurance and Travel.

Saga has its origin as a Seaside Hotel in England and then became a travel company before then moving into insurance in the 1980s. Saga caters specifically for the “over 50” market and claims to be the “leading provider” to people over 50 in the uK.

After a PE financed management buyout in 2007, he company was IPOed in May 2014 at a price of 185 pence / share.

Looking at the stock chart, IPO investors at first saw a decent outperformance before things went south this year:

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Boiron SA (ISIN FR0000061129) – Boring enough to invest ?

It’s no secret that I like French family run companies. TFF Group, G. Perrier, Installux, Dom Security are just the main examples of these kind of companies.

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Boiron SA is a French company which Bloomberg lists as “Specialty Pharmaceutical” company. Although “Specialty Pharma” is not exactly what they do. in fact, Boiron SA ist the only listed company that I know that exclusively produces and sells Homeopathic “pharmaceutical” products. The call themselves “World leader” of this field.

A few words on Homeopathy

From Wikipedia:

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Softbank Part 2: Sum-of-parts Valuation and don’t forget the Taxman

A couple of days ago, I looked at Softbank more from a strategic point of view. This time I want to focus more on the actual assets and a sum-of-parts valuation

What is Softbank ?

Essentially the company at its core is a Telco company in Japan and US plus a lot of “extra assets” like the Alibaba stake, Yahoo Japan and then all the other stuff including the vision fund. The initial Software distribution business (this is where the name Softbank comes from) doesn’t play a big role anymore.

I will now try to walk through the major Softbank Assets in more detail:

  1. The Alibaba stake

Let’s start with the largest position first, the now so famous Alibaba stake. From a technical perspective, Softbank doesn’t own the listed shares but this:

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Short cuts: Provident Financial, Topdanmark

Provident Financial

Wow, that was fast. In November I looked at the stock but luckily dismissed it. This is what I wrote back then:

However for me, despite I do like financial companies, I don’t want to invest into a company which in my opinion runs an ethical questionable business. Some might argue that Lloyds Banking is not much different but I think that there is still a big difference between a well run main street bank and an aggressive subprime lender.

I do belive that in the long run, a company which takes advantage of clients has a higher probability to get into troubles than one which actually benefits the customer.

Although the “Crook” is out, the stock tanked an incredible -70% alone on Tuesday

So what happened ?

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Travel series part 7 – Tripadvisor (TRIP) follow up & more thoughts on online travel

This is the follow-up post on the intitial Tripadvisor post from last week.

So where is the upside ?

After “bashing” them in the first post, the question is: Is there an upside and if yes where ?

CEO & Capital management

With Steve Kaufer, the CEO, one of the founders is still on board. His salary is rather modest but he got plenty of options awarded in the previous years. According to Bloomberg, he received option in the original value of ~33 mn USD in 2014 to 2016. He owns  shares in an amount of 17 mn USD, which is not huge but still not insignificant.

In his 2016 letter to the shareholders he writes the following:

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Majestic Wine (GB00B021F836) – Nothing to see or potential UK “Outsider” company ?

DISCLAIMER

As always: this is not investment advise. Please DO YOUR OWN RESEARCH. Never trust any “stock tips” from anyone.

A few weeks ago I already mentioned that I had invested into a UK small cap company. Because of a lack of time I had to delay finishing the write-up but now I happily reveal the “UK mystery stock”:

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Majesic Wine Plc is the dominant wine retailer in the UK for “medium to higher priced” wines, from 5 GBP/bottle upwards. They run a retail chain plus a commercial service for restaurants and a “fine wine” subsidiary. They recently purchased online only wine trader “Naked Wine” but we come to that later.

Charly Munger’s mantra is “Invert, always invert”. So let’s start this one with a couple of reasons why you shouldn’t buy Majestic Wine at the moment:

  • BREXIT: This has potentially multiple negative impacts on Majestic. With a lower Pound, imports get more expensive plus a general potentially weak consumer climate could make things really difficult and squeeze margins and/or reduce volumes. On top of that, many of the bankers who might need to leave the City might be target customers
  • The overall wine market in the UK hasn’t been growing in the last years so any growth needs to come from competitors. If Wine importers need to raise prices there is also the potential of a “substitution effect” towards other, cheaper alcoholic beverages like for instance craft beer which can be made locally.
  • Current numbers do not look that good, even if one adjusts for one-offs etc. the stock is not “cheap”. The company cancelled the dividend for the current year.
  • Even before the Brexit discussion, the business had weakened. The earnings peek has been the business year 2013/2014
  • As everywhere in retail, online is definitely an issue for the wine trade.

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