Emerging value updates#4
Summary.
Newsletter update
Company updates
Write ups
Movements
-Thanks to anyone who subscribed! We are closing the year at nearly 4800. I was hoping for 5000, but let’s be humble and happy. I just myself, bringing unique ideas and a strong focus on investing without the manias and depressions of mister market.
-An public annual letter with personal thoughts on markets and investing will be sent out.
-I am preparing a Christmas special but I don’t think it will be ready for Christmas, with private life taking a priority. It will be a very entertaining and educational read, and eye opening on many aspects.
-I am collaborating with potentially new two new writers over this holiday season, as a tradition here, who are starting and have very few readers and need a good push. One of them is going to cover a company I have been interested in, the other, no idea yet. This is with no payment of course, that would be abusing a poor new writer ;) ...
-An annual portfolio review for prime subscribers in January sometime.
-The portfolio is improving, closing on 16% for the year, with the value holdings regaining value one by one during the end of the year like PayPal, JD, First Pacific, etc. I have no doubt that the same will happen with 9/10 of my value stocks because valuations make no sense in value land. 16% should be disappointing when the US index does 25%, but I also have no doubt that the US index is set up for many flat years when catching down to fair value while the portfolio of value investors will keep catching up to fair value.
I am mostly not focusing on results here, but on important events, because the holiday season is busy. Also, I focus on the long term for my companies.
CK Hutchison is waking up with the approval of the UK Vodafone/3 Merger which will free capital from the telecom segment. CK infrastructure also conducted small acquisitions. It looks like to me that the company is back on a growth and improvement path. Because CK Infrastructure, a subsidiary of the company, has been listed in the UK (Also a good move to move interest closer and more aligned), the company has made a capital day presentation that is very interesting.
CK infrastructure IR presentation
The company has been a value trap so far, but I am optimistic and it has recovered a bit YTD.
Supreme PLC with a kind of more risky acquisition of a bankrupt Tea company for 10 million. While everyone is cheering on the acquisition on X, people forget that they did not go belly up for no reason. We have to remain cautiously optimistic: Supreme PLC, the British Serial Acquirer, does have a lean structure and distribution assets, but is not a magic wand, there could be challenges to bring the Tea division to profit.
Typhoo Tea's established asset-light, outsourced model will be further enhanced by Supreme's existing vertically integrated distribution platform, which already services a number of existing customers
Kulcs Soft, my Hungarian software company with a gigantic moat (tax and accounting software in Hungarian - good luck copying that), was delisted. I was up 50% or so before the delisting, but the delisting took the price down for a weird reason. The take over offer was approved, but some people did not have time to fill the paperwork to the offer, or changed their mind, so the stock still traded and ended up at 1650, below the offer. I did not accept the offer and will keep the shares private. This is a test of my patience as a value investor. I am ok as long as they keep paying the large and growing dividend. Some people say that the owner may try to squeeze out small shareholders by not paying dividends for a few years and then giving a low ball offer. In the mean time, all the shares privatized acted like a huge buyback in my favor. I do not really trust the management and he is not respectful of minority owners:
However I am stubborn, and fairly sure that he will want to pay dividends, as per my research they are cheaper than raising a high salary in Hungary (pension and social contributions plus income taxes). Who is a long term investor and who is a stock trader? I am a long term investor.
Pentamaster is halted for a potential take over offer from the parent company. This leads me to review potential candidates for new value companies, mostly in Japan.
Melcor Development announces increase of the offer and extended negociations in buying the REIT. I would prefer that they buy the REIT as rates are going down and they have the financial firepower to buy it, rather than sell it. Either way, profits or capital returns are coming.
Intrum has voted a positive recapitalization For me, with this positive and rates going down, the stock should be up again, but the Swedish investors are not into valuation work. They are more like US nasdaq momentum crowds. It will rise at some point Imo. Bond investors have started to take notice, even though they were wrong for selling it down to 50. All these was driven by emotions or forced selling and not by analysis.
Ecopetrol presented the investment plan for 2025
I like that the company not only invests in E&P but also in expanding the electricity and infrastructure segment assets, who have a long duration. 90% will be for the electricity segment.
LÃnea de Transmisión y VÃas Interconexión Eléctrica S.A E.S.P. (ISA), filial de Ecopetrol S.A., invertirá entre de 5.7 y 6.5 billones de pesos en el 2025 (equivalentes a ~21% del presupuesto anual del Grupo Ecopetrol) de los cuales alrededor del 90% estarán destinados al negocio de transmisión eléctrica. Se prevé incrementar la red de energÃa eléctrica para lograr cerca de 50,400 kms en operación al 2025, manteniendo a la CompañÃa como lÃder en transmisión de energÃa en la región.
small Spanish lesson.
What a good surprise when I saw that EM finance company Is restarting a dividend and sending it for Christmas. The problems are behind us and a long series of dividends should come for this unique business. I love this company.
Mansei Corporation - Altay Capital
So, I have amazing growth and value positions in my opinion, but If I get new capital, my new ideas will likely be outsourced to guys like Altay Capital or other Japanese specialists. Sometimes you have to let specialists guide you to a segment of the market. If you want EMs or Europe, I got you covered :).
A fun rant about this stupid market
New position: Genomics tracking positions.
New postion: As detailed in my last write up (Delko), I invested in Costco, but not really Costco, because Costco is not value.
Added: Serial acquirer trading at under 10 PE Ratio and growing 30% year on year. incredible. For this reason I have to pause the Genomics tracking positions buildups! (Details in the paid section of this article).
Sold/reduced: Delko
Conclusion
Next articles are coming soon!
We stay focused on fundamentals and not this maniac momentum market.
Thanks.
I did not have much update for premium subscribers this time, so I left the whole post public, also its Christmas season!
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Kulcs-soft and Kulcsár confirmed exactly what I was afraid of, when not investing in the stock. A more than 90% owner who's not selling more stock will never appreciate the minority owners who gave him money when he wanted to grow. Heck, even 50% ownership is dangerous.
Assholes like this will be remembered by investors, especially in the Internet era. Next time he needs money, he'd better not go to the stock market for it.