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.
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”:
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.
Coface SA is a relatively simple contrarian “mean reversion” case:
- the company at the moment has some specific issues which in my opinion can be solved
- the industry as such is attractive (within the generally problematic insurance space) with significant barriers to entry and little exposure to interest rates
- Even in a bad case, the downside at current depressed levels is small. A conservative “mean reversion case” would indicate ~75% upside without assuming any growth
- no hard “catalyst” and fundamentally it could get worse before it gets better
- For exposure management reasons, NN Group will be sold and replaced by Coface
- As always the reminder DO YOUR OWN RESEARCH. THIS IS NOT INVESTMENT ADVISE !!!!
Coface SA is a French “Trade Credit Insurance” company and one of the Big 3 players of this industry which together have 80% market share.
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:
This is something that ran over the ticker today with regard to the Kuka case:
CFIUS Likely to Challenge Midea-Kuka Deal, Height Says
By Kasia Klimasinska
(Bloomberg) — CFIUS will likely challenge this deal “because Kuka has a direct relationship as a primary robotics supplier to Northrop Grumman,” Height analyst Nils Tracy says.
- “At a minimum, we expect the transaction will face an extended CFIUS review timeline and a number of divestures”
Waddell & Reed is a Kansas based Asset Manager (mostly listed equity) & Financial Advisory firm. The company became somehow infamous during the 2010 “flash crash” when they were initially blamed that one of their order had caused the crash. Later, the SEC blamed a guy in London for it.
W&R looks like an interesting “High quality mean reversion” type of value stock.:
Market Cap: 1,4 bn
P/E (2015): 6,9
Div. Yield: 10,3%
10 year avg. ROE: 33,4%
10 Year avg. NI margin: 14,1%
So we have a high ROE/ROCE, high margin business with significant net cash that trades at a ridiculously cheap level (based on 2015 earnings). There is a relatively recent SeekingAlpha “long” pitch with the following summary: