“When the wolves bite” is the story about Herbalife and the fight between Bill Ackman, the Activist Hedge Fund manager who publicly shorted the company and Acitivist legend Carl Icahn who became a large shareholder mainly in order to annoy Bill Ackman.
A quick update on the Metro case. This is how I ended the Metro post from a few days ago:
For me, it is currently too early to do something. It is not clear to me if the stock price has overreacted or if more trouble is coming along especially from Russia.
Selling now would be clearly an uninformed decision as well as buying more. The next step will be the release of the 6M report next week. I think I will then still wait and see how Russia develops. If, for instance there would be a further profit warning because of Russia, then this would be a clear sell signal.
So let’s quickly check out the half-year report.
- Real, the German Supermarket chain is doing batter than last year. However the improvement in Q2 was smaller than in Q1 and might have been aided by early Easter holidays
- Delivery & Real Online do well, but are small
- Asia stable despite negative FX impact
- Metro Germany is still losing money
- Eastern Europe less profitable despite good growth
- FCF Q2 lower by -130 mn (reason given: Store openings)
- Restructuring charges at Real of up to -40 mn EUR (over 2 years if I understood correctly)
- EBITDA in Russia in Q2 dropped -50%, Like for like sales by almost -9%
Metro, the spin-off stock I bought last year, doesn’t look very good at the moment. The stock priced tanked significantly over the last weeks and the stock is now a proud member of “V&O Flop 10“:
When a stock price moves like this, the fist thought is always: I need to do something, either to sell, or more often, to buy more. This was for instance one of the mistakes I made with Silver Chef, where I Increased my position at least temporary.