Emerging value updates #14
Hi all,
Emerging value updates:
We are now over 7350. The growth stopped a bit because maybe the macro fears took over, I stopped promoting the newsletter, focusing instead on research.
The first thing I did in the Iran war was to open a new brokerage account for a dividend growth portfolio to manage some of my long term cash, but with a very defensive approach: more focus on downside protection than upside. It only has 7 names so far. That was my focus instead of promoting the newsletter.
So this week there are no best buys, but these were the best buys “dividend growth style”.
I did some attempts to find new emerging markets IPOs or stocks using AI chatbots, they miss a lot of the things to watch for. AI is good to analyse one product or company but not to discover things. I also looked at the Nasdaq IPOs to find new EM companies.
The truth is the leaders of the EM world are already established, listed, and are only going to growth from here: This includes E-commerce companies, banks, insurance and consumer goods companies.
A good place to hunt is a few years after listing and massive derating to 10 times earnings or less.
The best things are not necessarily hidden, it’s just that people don’t focus on this massive opportunity in EMs.
Other than this, a whole set of companies are incredibly undervalued because they are in boring industries. They should trade at a premium imo, so I keep adding and this is why I opened a new dividend growth portfolio.
I did three write ups on three important companies:
1-A large retailer in Brazil
2-The leading traditional E-commerce company in Africa
3-The leading E-commerce company in Poland:
I did a Free update on JD.com, where I don’t pretend to be the Chinese expert - but I take the deep value approach to foreign investing.
Newprinces SPA update - in the middle of a crash, but it recovered the next day.
External write ups:
I saw some great articles regarding emerging markets investing and I will share them below:
1-There is a new publication: Frontier Viking, who covers Frontier markets, so I have to give him a shoutout, with a good article about cheap Malaysian Stocks.
2-Swedish Friend Gustav created a substack and invests in Emerging markets only, here is his portfolio review from February. For many of his picks you need to open a local broker.
3-Understanding the new Baidu (Spanish). Momentum does some serious coverage of Chinese stocks and global compounders, with extended knowledge and analysis of China. This was maybe difficult to do before the AI age, but now recent translation tools and AI bots allow them to build this expertise. Baidu has a struggling search business but a growing AI business, and instated a dividend, which was my requirement to invest in China tech. Very interesting, but a business area with no strong moats yet (AI).
Friend Quipus Capital from Argentina did a macro themed email about deleveraging in Brazilian companies (paywalled). Quipus did an interview on my newsletter in February.
Really outstanding coverage by all these writers.
Portfolio movement
Company added: I added to my European AI/Defence play at 11 times forward earnings: Kontron. This is mainly for portfolio positioning towards this theme, as I am already well positioned for the EM consumer, and I will continue to do so for a while.
To get the full Emerging market portfolio, the hidden champions portfolio and the dividend growth investing portfolio, upgrade below. Thanks
Thanks for the mention Olivier!
Thanks Oliver! Great to be mentioned alongside FrontierViking.