April 23 monthly recap
Newsletter update
Company update
Write ups
Quantitative watchlist
European Language Ideas
Manual deck (watchlist)
Movements and conclusion
I have now over 2140 subscribers, that is amazing.
I focused on writing some fat pitch articles recently, and did a comprehensive A to Z of Japan tech, watch out for great free intro articles on Japan tech, some names are definitely value.
I also participated in a German speaking space. It was funny, I love practicing languages, but I kind of sucked at speaking and was nervous, getting better towards the end of the space. It was a one off because a twitter friend asked me. The fact that my investment philosophy is simple helped me convey my message with simple words!
Overall I view the substack evolving around doing what I like, analysing rare champions and compounders. If I see great value in the mainstream like a FANG or large compounder I would buy it also, but maybe not prioritize a write up.
Most of my investments keep doing ok or good but the stock prices do not move up much. Some are impacted by the rates hike and inflation wave, having lower earnings. I don’t think we can assume this situation to continue forever. Time will tell if these were good choices. Overall I am up single digits this year.
A selection:
First pacific results were excellent, dividend is up, earnings are up, the stock is still flat, PE ratio of 3.5, dividend yield of 8.7%. The company has acquired with a consortium the listed Infrastructure subsidiary, increasing earnings also that way.
https://www.firstpacific.com/press/press.php?category=press
Intrum, a debt collection company I just wrote up, had weak Q1 results due to increased costs. The stock then tanked. I invest for the value so a few quarters do not invalidate the thesis, it’s part of it. However I could always be wrong in a thesis, especially about a complex financial company (The analyst consensus is also positive on future earnings). Therefore I will abstain from adding now for my risk management. I am not dying on a hill about one company thesis, there are dozens out there. I do 2-3 down reinforcements maximum on a name, with some exceptions, (If I really know it 100%, if it’s Berkshire type solidity, if it has no debt and is growing, etc).
When you buy contrarian value, it’s more difficult than buying a loved compounder, but it can give bigger rewards when it is correct. Note that a loved compounder can also become contrarian value!
Poulaillon, the bakery and sandwich company, had excellent revenue figures at 26% growth, on track to do 100 million Euros of sales on a 22 million Euros marketcap. They are opening 3 new locations.
Here I manually selected stocks for quality or hidden champions characteristics and track movements and PE from google finance or other providers. Sometimes the PEs are wrong.
This month I wanted to show a the filter for: DM quality value.
And there are many ideas around!
There were many write ups this month, generally, I will link write ups not based on quality of the write ups, but based on my perceived opportunity of the idea (quality+price).
Future PLC: Media serial acquirer
My comment: That’s a bit of a complex one, with difficult assets to understand in Media, but interesting if one wants to do due diligence.
Pagseguro in Brazil - 8 times earnings compounder
My comment: great idea, Brazil fintech and payment processing is just a bit competitive and I’m not sure about it.
Auto Partner - Polish compounder
My comment: Great company that I missed. I wasn’t keen on auto related companies but educated myself with Autozone and now AutoPartner and I now know not to dismiss companies because they are related to Cars.
Brazilian distribution company with spin off incoming in special sits
My comment: Great idea if you have cash to spare.
Alaris Equity Partner from the excellent Uproar Capital
My comment: Great company to watch.
Ifirma, Polish accounting software
My comment: Great company to add to watchlist.
My articles
Fat Pitch Value - Medical net (tech in Japan)
Very fast growth tech company with lowish valuation
Intrum - credit management 5-6 times earnings - It just tanked after I published it! Time will tell. Very low valuation for a solid grower.
10 times PE, exposed to Africa, I like it.
Fat Pitch Value - EM Finance, PE 3.5 ($ Article)
Deep value for what is also a growing company.
Fat Pitch Value - British American Tobacco
Nothing to add, we all now BATS.
At the moment, with low valuations in Ex US and small cap stocks, I think the time is more for Shorter articles with great value.
The time for quality long pitches and superior compounders is when there are no value bargains around. (2007 I suppose), or if great companies are cheap (Google, Microsoft 2012). to be fair Google and Microsoft also caught tailwinds specifically at this time.
Again, I am not mad about Berentzen strategy or business, it’s just too cheap and very resilient.
Very few work here recently, so not much new info in this update as I prepare some cool articles about Japan tech.