Some links 11/2024

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A nice deep dive into Agfa-Gevaert from the “Healthy Stock Picks” Substack

And another analysis of a Belgian stalwart, Bekaert from Alex Sweet

The WinterGems substack with a write-up on Monarch Cement plus an extra North America “Cement deep dive”

A good reminder: You probably don’t need Alternative Inevstments to become rich

Another good reminder that high concentration in portfolios is not always beneficial

The (container) shipping industry once again is looking strained due to bottlenecks (FT, search result)

MIT Superstar Economist Daren Acemoglu is vey sceptical on any major benefits from AI (FT, search result)

All Belgian Shares part 8 – Nr. 141-160

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After a short vacatation break, I am back with the next “All Belgian shares” post. Besides the usual Real Estate and non-traded Expert market stuff, this time three stocks made it onto the watch list. For one of them I even started a 1% position in order to motivate myself for a deep dive rather sooner than later. Enjoy !!

141. EVS Broadcast Equipment SA

EVS is a 411 mn EUR market cap stock that I analyzed almost 10 years ago as a potential “high quality compounder”. This was my summary back then:

Looking at the chart, this is also one of the stocks where the “shiny new HQ curse” fully hit:

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All Belgian Shares part 7 – Nr. 121-140

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It’s Belgian Power Week on the blog this week with a second post in the “All Belgian Shares” series. From these 20, randomly selected shares, 7 made it onto the preliminary watch list, including some really interesting companies. Let’s go !!

121. Galapagos

Galapagos has nothing to do with the Islands in the Pacific but is a Biotech company that has spiked during Covid and lost -90% since then. They do have sales and even some earnings and according to TIKR, they have a negative EV of -1,8 bn.

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All Belgian Shares part 6 – Nr. 101-120

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With this post, we crossed the “half-time” mark for the Belgian Stock Market. Among these 20, in random order selected stocks, 6 made it onto the watch list, among them a former holding of mine. Let’s go:

101. Newtree

According to TIKR, this 17 mn EUR market cap company “provides chocolates, spreads, snacks, gifts, and coffee products. It also offers products through online”. On their investor website, annual accounts are only available to 2018. “Pass”.

102. Elia Group

Elia is th 6,6 bn EUR market cap operator of the Belgian Electricity transmission network. They also own and run 50 Hertz, one of the larger German transmission network operators. Electricity transmission networks are fully regulated assets, i.e. if the network is working, the owner gets a guaranteed return based on the “Regulated Asset Base (RAB)”.

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Some links 10/2024

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An interesting collection of 3 “Oddball stock picks” form the Bargain Stock radar Substack

Interesting write-up on market research firm YouGov Plc from Robin Research

The WinterGems substack with a portfolio update and the “50% draw down” test

“Every stock has a shelf life” – very good thoughts from Ian Cassel

Very interesting FT article on the “Private Equity Winter” (search result)

Some deep thoughts from Ben Evans on why Generative AI has not produced real use cases (yet)

Michael Mauboussin dropped a great paper on how to interpret and compare valuation multiples

The German Mittelstand is maybe Down but not Out: Hermle AG – Hidden Automation Champion from the “Ländle”

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As always with my longer write-ups, I will attach the full PDF below. In the post itself I will focus on the Exec summary, Pro’s and Con’s and the conclusion. And the Bonus Track of course at the end.

Executive Summary

Hermle AG is a typical “Hidden Champion” Mittelstand company from Southwestern Germany (Baden Wuerttemberg, the “Ländle”) that managed to carve out a very nice niche in 5- Axis CNC machines and connected production automation.  The company is able to earn industry leading EBIT margins (>20%) and Returns on Capital (>30%), has a Fortress Balance sheet and trades only at a relatively modest valuation of around 7,7x EV/EBIT.

The business is exposed to the economic cycle, but a combination of competitive advantages, a flexible cost base and a structural tailwind (Automation) make the stock attractive in the mid- to long term

Full PDF can be read & downloaded here:

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Performance review Q1 2024 – Comment: “Contrarian Investing – Easier said than done”

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In the first 3 months of 2024, the Value & Opportunity portfolio gained  +3,2% (including dividends, no taxes) against a gain of +6,0% for the Benchmark (Eurostoxx50 (25%), EuroStoxx small 200 (25%), DAX (30%), MDAX (20%), all TR indices).

Links to previous Performance reviews can be found on the Performance Page of the blog. Some other funds that I follow have performed as follows in the first 3M 2024:

Partners Fund TGV: +9,0%
Profitlich/Schmidlin: +4,0%
Squad European Convictions: 3,4%
Frankfurter Aktienfonds für Stiftungen: +5,9%
Squad Aguja Special Situation: +1,2%
Paladin One: -5,9%
Alphastars Europe: +0,6%
Gehlen & Bräutigam: -1,3%

Performance review:

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All Belgian Shares part 5 – Nr. 81-100

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Back from the Easter break with 20 freshly selected random Belgian stocks. This time, four made it onto the preliminary watch list.

81. MAATSCHAPPIJ VAN DE BRUGSE ZEEHAVEN (Expert Market)

At first I got excited, as this seems to be the Port of Brugge and the port seems to have grown over the years according to Wikipedia. And I do like ports.. But this stock traded last in 2015. It seems that at a higher level, the port has already merged with Antwerpes.

Unfortunately I did not find any financial information. “Pass”.

82. Mazaro NV

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All Belgian Shares Part 4 – Nr. 61-80

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And on we go, turning rocks and kissing frogs in the Belgian stock market. This batch of 20 randomly selected stocks yielded 4 watch list candidates, among them a stock I owned in the past.

So far, the “Expert Market” is a littlebit disappointing. For many of the companies there it is really hard to get infromation. But be assured, i won’t give up easily !! Let’s go:

61. Orange Belgium

As the name says, this 745 mn EUR market cap stock is the listed Belgium subsidiary of Orange Group, which owns 77% of the shares.

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Some links 09/2024

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Treasure Hunting with a nice write-up on Cornerstone FS

The Giverny Capital 2023 letter with some important lessons after investing for 30 years

Despite a few good IPOs, the PE industry is still struggling

Really nice write-up on UK specialty Chemical company Croda

Former Bond King Bill Gross is still writing letters

Interesting FT article on the development of Private infrastructure Equity as major asset class (search result)

A fantastic “Business model breakdown” of retailers from Edelweiss Capital

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