Another batch of 25 randomly selected German stocks. This time with some quite interesting or even strange underlying businesses. Five candidates are worth “watching”.
526. VTG AG
VTG is a 1.1 bn market cap company that is renting out/ leasing railway cars and was taken over by a Morgan Stanley infrastructure fund in 2018 at 53 EUR/share. The company has been de-listed and is trading only on the “Pink sheets”. Interestingly the stock price suffered after the crisis but has recovered in the past weeks as well:
Disclaimer: This is not investment advice. PLEASE DO YOUR OWN RESEARCH !!!
Agfa-Gevaert was on my research list for some time now. Fellow blogger Undervalued Shares than triggered my renewed interest with their post from a few days ago and one of my best “Special situations” ideas ever was a Belgian company (Sapec).
I’ll try to summarize the part of the post that deals with Agfa:
- Active Ownership, a relatively new but successful German activist fund (Stada) has build up a position (~14%] and board membership (actually the Chairman) in Agfa Gevaert, the traditional German-Belgian film / imaging company
- Despite having some interesting assets, Agfa didn’t create shareholder value over a long time
- opaque reporting and a 1 bn EUR pension liability made it unattractive to stock market investors
- In 2020, Agfa managed to sell part of its Healthcare IT segment for 975 mn EUR
- Initially, the stock went up to ~5 EUR based on the first info on the sale but hasn’t fully recovered yet
New year, same series. This time the 25 stocks contain 5 watch list candidates. At 200 stocks I have managed now to cover already 25% of the universe.
176. Puma SE
Puma SE, the iconic German sportswear brand founded by the brother of Adi Dassler (Adidas) is a very interesting case. The now 10 bn EUR market company was one of the real hot growth stocks in the 90ies early 2000s, then nothing happened for a long time as we can see in the chart:
System1 (or under its old name Braijuicer) is a good example for a stock where it didn’t pay off to hold if we look at the chart:
I had looked briefly at them when Ben from Wertart bought them in early 2016 but back then didn’t take the time understand what the company was all about. After the huge drop I decided to have a deeper lok at the company.
Performance Q1 2018:
In Q1 2018, the Value & Opportunity portfolio lost -1,38% (including dividends, no taxes) against -3,90% for the Benchmark (Eurostoxx50 (Perf.Ind) (25%), Eurostoxx small 200 (25%), DAX (30%), MDAX (20%)).
Some other funds that I follow have performed as follows in Q1 2018:
Partners Fund TGV: -10,79%
Squad European Convictions +0,19%
Ennismore European Smaller Cos -1,40% (in EUR)
Frankfurter Aktienfonds für Stiftungen -0,47%
Evermore Global Value -3,03%
Greiff Special Situation +0,65%
Squad Aguja Special Situation -5,38%
Paladin One +0,57%
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.
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
As mentioned a few days ago, ALD SA has been IPOed by parent SocGen on June 16th. SocGen sold ~23% of the stock and remains majority shareholder. The first question of course is: why did they do this ?
The official reason was the following:
The IPO confirms the strategic nature of ALD within Societe Generale group. It will allow ALD to accelerate its development and become a leader in a rapidly changing mobility space.
A logical follow-up to lastminute.com is clearly Expedia. Why ? Well, firstly because I use it personally (for flights) and secondly because it is one of the leading “OTAs”.
Expedia started in 1996 as a division of Microsoft and did an IPO in 1999. They have a pretty detailed company history web page.
When I looked at Novo Nordisk 3 months ago, I found the stock too expensive at 315 DKK/share. That was my summary back then:
What could make the stock interesting again ?
Well, that’s simple: Either a lower stock price or higher growth. Maybe management has low-balled growth ? Who knows. Maybe the market over reacts if the next quarters don’t look that good ? According to Bloomberg, analysts officially still expect double-digit earnings per share growth well into 2019. Even adjusting for share buy backs, this will be difficult to achieve based on the growth rates communicated by management.
For me, the stock would become more interesting at around 250 DKK under the current growth assumptions. I think I would also like to see more negative comments from analysts.
With the stock now trading at ~229 DKK, it is clearly necessary to revisit the stock again.