SIAS SpA – Collateral damage ?

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SIAS is an Italian motorway operator that I bought at the height of the “Euro crisis” in 2012 and sold 2 year later with a nice profit of more than 100% including a special dividend. 

Looking at the long-term chart, selling in mid 2014 was not such a bad decision at least for the next 3 years (although in general my timing skills are clearly far below average):

sias

It took more than 3 years to surpass this level but then interestingly the stock more than doubled within a few months.

Looking at the aggregated numbers we can see an interesting pattern:

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Some links

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A good overview of event driven investing

Some links related to current and upcoming Spin-offs

A good overview of current issues in the Turkish Banking sector

The UK Value Investor looks at SaaS company Sage Plc, 

Uber is going vertical towards Mobility as a Service (MaaS)

Depending on where one reads, Waymo, Google’s Self driving unit is either a fantastic success or “people absolutely hate it”

Liqtech could be an interesting “punt” on changing regulation for the shipping industry

DormaKaba (ISIN CH0011795959): Cheap enough after a -30% drop ?

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In my initial post for Dom Security, I lined out why the Commercial Lock business is very attractive in my opinion. As a result, most businesses enjoy nice margins.

Kaba, the Swiss company was always the number 3 with some distance to market leader Assa Abbloy and allegion.

However in 2015 Kaba finally managed to merge with he  German family owned Dorma in order become a much larger and diversified Group. In theory Dorma was a great fit for Kaba as they were specializing more in building access systems which should compliment Kaba’s locking systems nicely.

Looking at the stock price, investors liked the merger until end of last year:

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Metro AG – Post mortem

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As I mentioned in the comments a few days ago, I sold my complete Metro position at around 12,30 EUR /share. Including a 0,70 EUR dividend, this translates into a -26,6% loss and is a new entry into my “flop 10” list.

So what went wrong ?

Looking back at my initial post, my original idea was to buy the “ugly” part of old Metro which was supposed to be Ceconomy. This was clearly influenced by missing out on Uniper when it spun off from E.On, which was a similar ugly duck but performed very well.

One observation that I made back then was the following:

Looking at the stock chart we can see that Metro didn’t create a lot of shareholder value over the last 20 years.

When the split actually happened, Ceconomy traded far above the level that I thought would be interesting:

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Some links

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FTAlphaville compares Turkey to Thailand and Malaysia in the 90s Asian crisis

The Canada Goose stock looks VERY expensive

Some good insights into short selling from Glenn Chan

Bill Gates recommends to read  the book “Capitalism without Capital”

A deeper look into Alibaba’s “numbers salad”

Bronte’s John Hempton tires to understand why Bayer shareholders didn’t stick around after a wave of lawsuits seems to hit newly acquired Monsanto

Off topic: rest in Peace Aretha Franklin

 

 

Observations: Tesla, David Einhorn & Turkey

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Tesla / Elon Musk

Elon Musk’s “Tesla is somehow going private” Tweet has triggered a lot of comments and discussions (good coverage on FT Alphaville).

For me the main take-away of this story is two fold:

One the one hand, listed equity markets are not the best place to raise equity capital once you are listed. It is OK to raise equity once when you IPO but after that, a company should only pay dividends and buy back stock. Part of the reason that Tesla is shorted so much is the expectation that they will need to raise equity which clearly shows the dilemma of public equity markets these days. Personally, I do think we will see more “Softbank style” large private vehicles which will specialize in providing capital to growing companies and save them the troubles of public equity markets until the company is mature enough. Unfortunately this will lead to the shift of a large part of value creation away from public markets and out of the reach of many “Normal” investors.

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Some links

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Unintended consequences: Ride hailing apps seem to increase inner city traffic

The “Old” valuation ratios don’t work that well anymore

Quant Investing is now a thing in Venture Capital, at least at Google

Seth Godin with a good list of books worth reading

Great piece from VC investor Fred Wilson on “investment pace”

Forager defines its own “investment edge”

Y Combinator’s Summer 2018 book list

Edit: Don’t miss the 2018 half year report from the TGV Truffle fund

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