Some Links

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The usual brilliant post from Morgan Housel on 3 character traits that are bad for investors

Undervalued Shares has discovered the “Amazon of Iran” disguised as Swedish stock

Good Investing with a very interesting interview with the CEO of Naked Wines

Profit Hunting with a write-up of SNAM, the Italian natural gas network

The case against food delivery platforms (h/t SL)

Food for my new “passion”: A very good Biotech reading list from A16Z (scroll down)

Interestingly, Tesla is not accounting its Bitcoins as “money” or currency

BioNTech SE – “One hit wonder” or Game changing Biotech platform ?

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This is not investment advice. PLEASE DO YOUR OWN RESEARCH !!!

Extra Health Warning

I guess some old time readers will think: Now that guy really lost his marbles or so. I have very little knowledge about Biotech companies and the industry in general and nothing qualifies me to write about a Biotech stock. My only experience with Biotech companies during the 10 years of the blog was Swiss based Actelion, but only as a special situation with a Spin-off component. So you might take this post as a warning signal that markets have become overheated and the author of this blog has indeed lost his marbles.

Management Summary:

Despite my limited experience and understanding of the sector, I do think that BioNTech represents an interesting “bet” on the success of the underlying mRNA technology and the ability of BioNTech to establish (or having already succeeded) a platform that will yield much more than just this one blockbuster Covid-19 vaccine but many other successful vaccines and cancer drugs (and more). Their intention to become a “full fledged” pharmaceutical company could be the start of a long “Compounding story” if successful, but there are also clearly many risks involved. 

BionTech history  IPO & “Pivot”

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Some Links

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Prof. Damodaran on “Price – Value feedback loops”

Valuesque with an interesting  deep dive on SNP’s order book and POC accounting (IFRS 15)

Telescope Investing with a 2021 “Disruptive portfolio”

Stratechery on Jeff Bezos stepping down and  Amazon

An interesting “reverse engineering” of a Charlie Munger “Deep Value” investment from 2001 (h/t to reader SG) 

Great post from Josh Brown how actually David can beat Goliath in the stock market  (Spoiler: not via wsb)

Mathew Ball on how Apple these days is acting as a typical monopolist and inhibiting progress

 

 

How does The new German “Mega Unicorn IPO” Auto1 compare to Just Eat Takeaway.com ?

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The Auto1 IPO 

Tomorrow, Auto1, the new German “Mega Unicorn” will go public and trade for the first time. At the upper end of the current book building range (38 EUR/share), which turned out to be the IPO price, the company is valued at almost 8 bn EUR. And that is before the expected “pop” at the IPO.

The company has currently 173 mn shares outstanding and will will issue 31.25 mn new Shares for around 1 bn that will go to the company. Another 15,625 mn shares will offered by existing shareholders, including the founders and the management.

As I will line out in the post, despite the very different sector (used cars), the underlying business model is somehow similar to Just Eat Takeaway.com (JET), a stock I have written about recently. The aim of this post ist to compare the business models of Auto1 and JET and to also compare the valuation the market grants to these 2 companies.

Spoiler: there will be no “actionable insights” in this post.

Auto1 business model

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Some links

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Interesting article on the current music rights catalog “gold rush” (Hypgnosis)

Rob Vinall with some deep reflections on “Compounders”

A comprehensive list of Q4 fund letters is to be found in this quiet corner of Reddit.…

Good write-up on Polish game developer CD Project

Cullen Roche on short selling and Citron Research is going “long only”

A very interesting introduction into the “Micro PE market”

A great reminder: Check up on cognitive biases on a regular basis !!

Book review: “How Life imitates Chess” – Garry Kasparov

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By coincidence, I downloaded this book before I got interested in Play Magnus a few months ago. However this clearly motivated me to move the book to the front of the reading list…..

Garry Kasparow has been named as one of the greatest Chess players of all time and became Chess world chmapion in 1985 at the age of 22 and held the title over 15 years. After his chess carreer, he surprisingly went into politics. As a funny side note: Kasparov was involved in founding the first online chess company in 1999. In between he coached younger chess players, for instance Magnus Carlsen in 2009.

In this book, Kasparov tries to transport strategic lessons from Chess into fields like business, politics and investment. In between he also covers his greatest matches, hardest opponents (Karpov !!) and the lessons he learned both, from victories and defeats.

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Alimentation Couche-Tard: Cheap Quality Compounder or Gasoline Dinosaur ?

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Disclaimer: This is not investment advice. PLEASE DO YOU OWN RESEARCH !!!

Management Summary:

Couche-Tard_logo.svg

Alimentation Couche-Tard (“CT”) is one of the historically best performing Canadian companies, operating gas stations and convenience stores around the world with a focus on North America.

The company currently looks like a very interesting GARP (growth at a reasonable price) stock.  Over the last 10 years, the company showed exceptionally good numbers: 23% EPS CAGR and 10 year average returns on capital  >20% (23% ROE, ~20% ROCE).  The business model is very resilient, Covid-19 actually led to an increase in margins and profits, both on the convenience store segment as well as in fuel despite declining sales.

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Some links

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The Brooklyn Investor on Howard Marks, RenTech, Bubbles and other stuff

First year review of “Junto” (h/t searching4value)

Ghost kitchens meet celebrities: Innovation in the Restaurant sector

How Solar Power is “eating the energy world”

Great advice: Just buy stocks that go up and sell when it stops going up

Cathie Wood’s “Agressive growth” fund company Ark Investment is doing great

And some annual letters to investors:
TGV Partners
TGV Rubicon
TGV Truffle
Giverny Capital
Massif Capital

Installux Post Mortem

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Intro:

As part of an improved investment process, I will try to write better “post mortem” analysis after exiting an investment. I did this in the past especially for bad investments but I plan to do this now for every investment that I fully exit. Interestingly, very few fund mangers talk or write in detail why they have been selling. 

Installux post mortem:

As mentioned in the comments of the original post, I sold my Installux shares yesterday at around 390 EUR, netting a total gain of 206% or ~13,7% p.a. over ~ 8.5 years. 

Installux was my second longest standing position in the portfolio. I was able to buy the shares cheaply mostly on a “mechanical basis” in 2012. This was my summary back then:

We have a consistently growing and profitable business with very low volatility, attractive ROE and ROIC and a valuation of 2x EV/EBITDA and 5x P/E adjusted for cash (7.8 unadjusted) which produces a large amount of free cashflow despite growing nicely over the years.

So what happened since then ? This is how the stock price looks like for the last 10 years:

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Some links

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Great long read on Jack Ma and Alibaba

“The friendly Bear” thinks Lemonade is a “ESG Pump and Dump”

Rob Vinall with a great post on Conspiracy theories 

Absolutely must read: Howard Marks on the useless divide between “value” and “growth” investing 

Great summary of Nick Sleep’s (Nomad) investment wisdom

Some stock spin-off ideas for 2021

RenTechs “own money” Medaillion fund had another great year, its funds for outside investors however suffered big losses

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