Disclaimer: This is not investment advice. DO YOUR OWN RESEARCH !!!
Readers of my blog might remember that I already owned Fitbit in late 2018 at 5 USD per share. I was lucky to sell the stock with a small profit before the stock lost more than half of its value in summer 2019:
This is what I wrote initially as part of the investment case:
Disclaimer: This is not investment advice, only the personal opinion of an anonymous blogger. PLEASE DO YOU OWN RESEARCH !!!!
Ahlsell is a Swedish company that distributes building / renovation related products mainly to craftsmen in the Nordic Region. In 2012, the company was taken private by private equity house CVC.
In 2016, Ahlsell was IPOed again by CVC at SEK 46 per share. They sold 1/3 of their shares in the IPO and then down to 25,1% just some weeks ago.
Then more or less out of the blue a few days ago, CVC offered again to take Ahlsell private at 55 SEk/share which translates into a valuation slightly north of 2 bn EUR for the equity.
A few days ago, Amazon famously announced to take over Whole Foods Market for 42 USD per share (representing a premium of around 27%).
Markets enthusiastically welcomed this move from Amazon, with the Amazon share jumping almost 4% or ~13 bn USD, which coincidently was almost equal to the deal amount.
Whole Foods itself was “under siege” from activist investor Jana which had built up a 9% stake in the company. Just 2 days before the takeover, Whole Foods CEO called Jana “greedy bastards” indicating that he was not happy having such a shareholder.
A lot has happened over the last few weeks for my 4 largest special situation investments:
Actelion / Idorsia
The original Actelion idea was very simple: Buy an M&A target at a small discount which is relatively safe and get something (the Idorsia spin-off) extra which no one seemed to have noticed.
Although the case played out exactly as I thought and Idorsia even seems to be worth more than I assumed, I only made around +4% on it. Not bad for around 5 months but not great either.
Looking back I think I made 3 mistakes:
Annual Report 2016
So now Sapec is out with their annual report for the last year (or 15 months).
The report is in French, so I am not sure if understood everything by 100% but I try to summarize the relevant issues:
- Book value per share at year-end was 191,6 EUR
- The operating result of the business ex the sold business is slightly negative
- The Agro business was sold at 318,4 mn equity value, resulting in a gain of 226 mn EUR
- They provisioned the full 36 mn Novo Bank guarantee.
Disclaimer: This is not investment advice. PLEASE DO YOUR OWN RESEARCH !!!
This investment is not an original idea, but rather a “me too” investment. Ben from Wertart has a very good write up from November last year, so I spare myself to go into too much historic description.
Just the short version: Kanam Grundinvest is one of several formerly open real estate funds in Germany which have been put into liquidation. The major difference to almost all other funds is that in the Kanam case investors actually didn’t lose any money over the lifetime of the fund as the real estate seems to have been relatively high quality. As of December 31st 2016, the fund has sold 95% of its real estate and is now effectively a cash box with some remaining real estate exposure.
So let’s focus on what has changed since Ben wrote his post:
Disclaimer: This is not investment advice. please do your own research !!!
Stada is a company I had been looking at many times in the past. A business which in principle is quite good (Generics and OTC drugs) but the company was run by a long time CEO who acted as it was his own company without owning a single share. He paid himself huge salaries, employed his son in a non-sensical but highly paid job, the company afforded itself a huge corporate center and so on. As a result, the company created little to no shareholder value in the 10 years up to mid 2016. As a comparison, the 10 year return of Stada until 03/2016 was only around 1,8% p.a. compared to 7,5 % p.a. for the MSCI Europe health care index, a significant underperformance.
Then however something happened which is still very rare in Germany: A local activist investor (Active Ownership Capital) and some other funds acquired a significant stake in the company and pushed for change.
Uniper /E.On Spin-off
In David Einhorn’s latest letter to investors he mentions the following:
We purchased E.ON (Germany: EOAN) in the fourth quarter of 2015. When EOAN spun out Uniper (Germany: UN01) in September, we kept the UN01 shares we received at €10.02 in thetransaction and sold the balance of our EOAN stake at a modest loss to redeploy that capital into additional UN01 shares. We believe the market does not appreciate the earnings stability o fUN01’s power generation and natural gas logistics assets. Further, the incoming management team is incentivized and has committed to cost-cutting, which will create a powerful cash flow profile. We own the company at 6x our 2017 earnings estimate.
So looking back this was a smart move. Although Uniper’s stock price came back a little bit, Einhorn is still up like 35% and has done clearly better than holding on E.On:
Disclaimer: This is not investment advice. The stock mentioned is relatively illiquid and potentially risky. Please do your own research !!!!
SAPEC SA, despite having gained already 350% YTD is in my opinion still a highly attractive special situation. The company is in the process of selling its main business which will result in around 230 EUR net cash per share compared to a share price of 135 EUR. Deal closing is very likely and management promised to distribute a “significant amount” of the proceeds. For me this is very attractive as I expect this to happen in the first half of 2017.
SAPEC is a somewhat strange company. Although the company is listed in Belgium, business activities are almost exclusively in the Iberian Peninsula (Portugal & Spain). This is how the company describes itself: