Search Results for: watch series

Travel series (3): Trivago (ISIN US89686D1054)- Ultra fast growing Hotel search engine, but what about profits ?

The company / IPO


Trivago is an interesting company. Founded in Germany (where succesful startups are very rare anyway), Expedia acquired the majority (61%) in 2012 for 477 mn EUR. Then, in December 2016 Expedia decided to IPO Trivago on NASDAQ at 11 USD per share (down from an initial range of 13-15 USD).

Interestingly. it is not so easy to find out how many shares are outstanding. The IPO itself comprised 30 mn shares, 20,8 mn new shares and 9,2 mn shares from the founders. Expedia didn’t sell any shares.

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Short cuts: Kuka, Swatch & Silver Chef


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”

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Book review: “Mister Swatch -Nicolas Hayek and the secret of his success”


This is basically part 4 and a half of my “watch series”. The founder of Swatch Group, Nicolas Hayek who died in 2010 was such an interesting character so I thought it made sense to read this biography.

The biography is unauthorized, Hayek was against it. The author is one of the most well-known Swiss Journalists. I actually read the German version because it was 10 EUR cheaper as hardcover than the English version.

Hayek was born in Lebanon into the “affluent middle class”. He went to Switzerland because he fell in love with a Swiss Aupair girl. His parents would not let marry him because of”low status” of the girl, so he left and went to Switzerland.
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Emerging markets series part 1: Ashmore Group PLC (ISIN GB00B132NW22)

As I have written a few weeks ago, I am trying to extend my circle of competence a little bit with regard to Emerging markets. The first company in this series is Ashmore Group.

Ashmore Group is a kind of “intermediate” step in this regard: They are a UK-based asset manager who specialises exclusively in Emerging markets.

The history of the company is well described on their homepage:

Based in London, the business was founded in 1992 as part of the Australia and New Zealand Banking Group. In 1999, Ashmore became independent and today manages $75.3bn (as at 31 December 2013) across a range of investment themes in pooled funds, segregated accounts and structured products. Ashmore Group plc has been listed on the London Stock Exchange since 2006.

Asset Management as a business

Asset management in general as a business used to be as good as it gets. Asset Management is an “asset light” business model. You collect fees and sometimes even participate if things work out well. Once money is invested, it is often surprisingly “sticky”. So it is no surprise that among the richest people in the world, a surprisingly large number of people are Hedgefund asset managers.

On the other side, “normal” active portfolio management is squeezed from different sides. Cost efficient Index ETFs from one side and hedge funds from the other. Also, with overall lower yields it is clearly more difficult to achieve the same fee levels as relative to the yield they represent a much bigger percentage

Back to Ashmore, this is how they have done historically since they went public:

EPS FCF ROE Net margin
2006 0,14 0,15 62,5% 60,7%
2007 0,21 0,22 60,2% 58,3%
2008 0,17 0,15 39,6% 46,8%
2009 0,24 0,26 47,1% 56,9%
2010 0,28 0,21 43,5% 55,1%
2011 0,27 0,18 35,0% 54,3%
2012 0,30 0,18 34,7% 56,9%

So no complaints here, ROE went down somewhat as equity was built up, but nevertheless it looks like very very attractive business. Compared to those numbers, Ashmore’s current valuation looks like a joke (at 330):

P/E 11.1
Div. Yield 5.35%
P/B 3.8
Mkt Cap 2.4 bn GBP
No debt, net Cash 500 mn GBP or~0.71 GBP per share

Plus there is more to like:

– the CEO owns 42% of the shares and with an age of 54 not close to retirement
– they seem to have some sort of “Outsider” qualities for instance fixed salaries are capped at 100 k GBP which keeps down fixed costs

But there is of course a reason why the stock is “cheap”:

– clients are pulling money from the funds
– average fees have been declining for 5 years in a row (until recently compensated by higher AuM)
– Performance fees will be low or non-existent for the foreseeable future
– revenues will decrease with falling market valuations for EM

Why I like the company anyway:

+ It is an easy way to “play” the entire Emerging market universe without incurring country specific risk
+ the company does not have any valuable own assets locked in difficult emerging markets, the assets are owned by the clients
+ long-term, EM capital markets will grow
+ EM are difficult to replicate via index ETFs, especially for bonds. Index ETFs are not really a competitor in the EM bond area (too illiquid, to many different bonds per issuer etc.)
+ As an EM specialist, they are much more credible than a large asset management company with some EM funds among many other offerings

Is there a “moat” ?

In theory, setting up any fund management company is relatively easy. Yes, one needs licences but they are easy to obtain. However, Emerging markets are a little bit different. While it is relatively easy to gain exposure to some assets, like EUR or USD bonds from EM issuers, getting access to local markets is much harder. Ashmore with its long EM market experience does have some advantages here, for instance they are the first non-Hongkong based fund manager to get a license to invest directly into the China “On shore” market early this year.

The current problems with EM led already to the exit of some high-profile AM companies from that area, among others, famous hedge fund Brevan Howard closed its once high-flying EM funds just recently.

Ashmore doesn’t have any “star portfolio managers” who might be able to jump to another company and take a lot of client money with them. Still, the single most important factor for any asset manager ist the historic track record. Performance is normally measured both in absolute and relative terms. For many so-called “asset allocators”, relative performance to other asset managers is the most important number. In order to find out how Ashmore scores in this regard, I looked at the publicly traded Ashmore funds. Bloomberg shows the relative ranking of such funds within their category over different time horizons. Those are the results for the traded Ashmore funds:

mn USD 1y 3y 5y fee
Ashmore Emerging Markets Corporate Debt 3690 84% 69% n.a. 1,15%
Ashmore Emerging Markets Liquid Investment Portfolio 3910 78% 96% 81% 1,50%
Ashmore Emerging Markets Local Currency Bond 2340 5% 23%   0,95%
Ashmore SICAV – Emerging Markets Debt Fund 1400 46% n.a. n.a. 0,95%
Ashmore SICAV – Emerging Markets Global Small-Cap Equity 100 86% n.a. n.a. 1,50%
Ashmore Asian Recovery Fund (“ARF”) 224 37% 1% n.a. 1,50%
Ashmore Emerging Markets Total Return 684 32% n.a. n.a. 1,10%
AshmoreEMM Middle East Fund 449 97% 97% 79% 1,50%

The number have to be interpreted the following way: The 84% under the 1Y column for the Ashmore Emerging Markets Corporate Debt fund says that the fund performed BETTER than 84% of all fund in that category , which, by the way is a very very good score. We can see that not all the funds are doing well, but at least the big flagships are doing well and some of the smaller specialist funds. Overall, from a performance perspective, it looks like Ashmore has at least some “edge” in its core mandates which will help them a lot, once money is flowing back into EM mandates.

Funnily enough, everyone knows that past performance is not a very good indicator of future performance, bt the majority of institutional money gets allocated based only on past performance.

How much would I be prepared to pay ?

To keep ist simple, I would think a “full” price for a company like Ashmore would be around 15x P/E. If I could buy it for (cash adjusted) at 10 x P/E based on potentially depressed next 2-3 year earnings levels, this would leave a decent upside.

Current estimates for 2014 are ~ 0,24 GBP per share, including 0.70 GBP net cash per share, this would mean I would be a buyer at around 310 pence per share or some -10% lower against the current share price to give me my required upside. So for the time being I will stay on the sidelines and watch and buy only below 310 pence per share.

As I am not a Chartist it is still interesting to look at the chart:

My target level for the purchase does look a little bit like a “support” level for the stock, which, if broken, might lead to a larger drop in the share price. So for the time being, I will watch Ashmore going forward but wait if either, business turns out to be better as expected or the price drops below 310 pence.

Investment philosophy: How to cope with less time available ?

For several personal reasons (don’t worry, all of them VERY positive !!), I already have less time and will have even less time for detailed company analysis in the future. So the question for me is: What do I need to do with my portfolio (and the blog)?

A few questions I have been asking myself were:

Should I

  1. have more positions to diversify or should I have less positions to concentrate on the remaining ones ?
  2. allocate more money to other money managers or even start investing into ETFs ?
  3. try to focus on less risky stocks ?
  4. just do shorter company analysis and focus on the essentials ?
  5. or even go back to a more mechanic approach (BOSS Score) ?
  6. focus more on my Circle of competence and skip trying to extend it ?
  7. Or even focus only on  a small universe of the highest quality stocks ?
  8. increase my minimum holding period to slow down turnover ?
  9. Avoid “Higher maintenance” positions like M&A arbitrage etc ?
  10. Do more “shadowing” of investment managers I admire ?
  11. What should I do with the blog ?

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7 Years of Value & Opportunity – THANK YOU !!


Exactly 7 years ago now, the first (German) blog post appeared on this site.

As I have done in the past years, this is a good time to reflect about happened over the year. Again a huge THANK YOU to all readers and especially those who actively contributed by commenting (critically) or sending Emails. And those who are suffering my sloppy spelling and grammar….

I am still surprised that I manage to keep this level of activity in the 7th year, but knowing that a lot of really smart people read my post is a fantastic motivation to keep going and try to become better.

Thank you again !!

The 10 most popular posts written in 2017

Read more (ISIN NL0010733960) -cheap flights and a cheap stock ?

Quick Intro:

The idea to look at came from my gocompare post, this is what I wrote back then:

Peter Wood hired the former CEO of, Mathew Crummack.

He seems to be a smart guy, however I haven’t seen anything from him about the future strategy yet. The new CFO of GoCompare ist the old deputy CFO from Esure. So the top managers from Esure seem to have preferred to stay.

I haven’t looked that deeply into but it seems to do better since he left…(note to myself: check

As I have quite a lot of travel related companies on my ToDo list, I decided to start a kind of “mini travel” series, similar to my “Watch series”. As I like to travel myself a lot, I think this should be lots of fun to look into those companies.

The company

lastminute-group-logo is a company based in Switzerland which initially went public in 2014 under the (strange) name “Bravofly Rumbo”. They started out as a website to offer cheap flights in Italy and Spain.-

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American Express (AXP) – Cheap “Buffett” Blue Chip or Value trap ?

Executive summary: Although American Express looks cheap based on their historic profitability, the company is subject to rapid technological change and fierce competition in the payment industry. To me it is not clear how this will work out going forward, so for the time being I will not invest but look deeper into the industry.


American Express is well known in value investment circles because Buffett owns ~15% of the company and made a lot of money with it.

Recently the stock price came under pressure mainly because:

  • they lost a big co-branding contract (Costco) which will materialize in 2016
  • EPS shrank for the first time since 2001
  • lost a court case (vendors steering clients to cheaper cards)
  • “fintech hype”: mobile payment & peer-to-peer lkoan platforms as disruptors

The stock price clearly has suffered and is down more than -40% from its peak in late 2014 /early 2015:

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All German Shares part 22 (Nr. 451-475)

Another batch of 25 randomly selected German stocks. This time I identified 5 candidates for my watch list amongst them.

451. Biofrontera AG

BioFrontera is a 151 mn EUR market cap specialty pharma company in the field of dermatology (skin cancer). The company actually has a product in the market and shows decent grows, especially in Germany and the US. The company is still loss making in the first 9M 2019, but the loss narrowed significantly. The “Corona Crash” pushed the stock price back to before sales went up:

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