Monthly updates April

Hi all, It’s time to make an update, mostly because I had to share two new publications I wanted to support. One helped me with some returns and another is exactly what I was looking for.

Summary.

1. Newsletter update

2. Company update

3. Quantitative watchlist

4. Write ups and new publications

5. Manual deck (watchlist)

• I finally passed 4000 subscribers with the help of recommendations. Thanks a lot.

• I also passed a big round number milestone in my portfolio without adding funds recently, so pretty cool. Now it will probably crash.

• I am testing a unique tool for global investors consisting of an automation, which is kinda complete but took me much time and energy to develop last month. It will come with a long free trial, I did it all by myself (chatGPT and Gemini helped a bit - by the way, they could not make the tool without an human, far from it). In the mean time I use it for myself and polish little details. I will probably start with a small group of people to test. On a side note I have another tool for global SMEs ready, another automation, nothing to do with investing. I have no time to publish it now but will look at this during my holidays. I am interested in tech and innovation, and deep value stocks too!

• I published a premium article about Text SA, a tech company, actually looking at its relation to AI and its business prospects.

The Chinese tech stocks are coming back with a bang, and even some sleepy or hated French small caps are rising a bit. I sense the tide turning. Nothing has changed much business wide.

Value is the catalyst. Pound the table when it’s down, and later it rises when you do nothing and forget about it.

Some quick words on PayPal. Q1 earnings were interesting, showing some resilience with payment volume and revenue growth. The stock seems undervalued. However, the opportunity for PayPal is not in transaction margins. This is the mature business. It is in value added services, like credit, marketplace and advertising. They still need to do a marketplace. There are signs that this innovation is accelerating, but no signs of monetization or marketplace yet. If that works, it is a multibagger. If not, a decent grower with some competitive challenges. PayPal knows what you buy as much as the big tech, if not more, but has a lower share of your time spent in app.

Introducing PayPal Advanced Offers Platform

Today, when consumers shop online their experience includes ads generated by their browsing behavior only, which can be irrelevant and frustrating. In response, PayPal will use unique customer insights to build a dynamic, truly personalized advanced offers platform giving merchants the ability to reach customers based on what they have actually bought across the internet, down to the stock keeping unit (SKU) and the individual product.

The innovations are on the right track. This is a bit of a speculative scenario, but there is no reason for them not to achieve this.

This document with dynamic prices is available to supporters of my publication. Here I manually selected stocks for quality or hidden champions characteristics and track movements and PE from google finance or other providers.

This month I wanted to show a the filter for higher quality companies for a change. Unlike the unflexible minded “quality investors” that are setting up themselves for missed opportunities in EMs and cyclicals, I am opened to any kind of investing and humble about what type of style is best.

How strong has big tech been is a source of reflexion that all value investors should have.

How undervalued some sectors and countries are, should be a source of reflexion for the quality investors (who always ignore that Buffett is buying Oil companies and misunderstand him). Buffett, like Munger, is flexible and does not stick to one style.

I like quality, growth and value investing and try to learn from all the styles.

I am building the list in Koyfin to notice relative bargains there:

Fairfax is interesting, but could be on a cyclical high imo. Etsy is interesting. Let’s see the potential economic downturn and the impact on some of these names.

Richemont and LVMH seem interesting on further pullbacks.

In this section I want to highlight only two publications because they are special for me. There are two great writers I want to present.

Global stock picking Launched a substack called Healthy stock picks

Thanks to his original write up on Modern Dental Here, written in 2018, I became interested, and entered the stock. When I entered the stock in 2021, his write up did not produce any returns in three years..a value trap? Then, the stock had a huge run and I managed to hold until I got a exuberant exit price with some luck. So don’t judge write ups from short term performance but from the underlying company performance.

The first write up on Healthy stock picks is Modern Dental again, so he really knows the name. I was going to write up Modern Dental eventually but It has been done very well, so I will not and will cover something unique.

(I am long Modern Dental again and it did very well. valuation matters when entering and exiting).

(too bad for Skechers it also nearly doubled..)

PS; Subscribe to my paid tier to see other potential good buys where I did not publish a write up, like Fairfax or Terravest, Kaspi or IMS during the Ukraine war that went up a lot. I don’t have time to write everything I buy. I usually wait several quarters of owning before writing up, just to know them better.

Not all that I bought went that well (like Intrum - maybe due to it being a financial company), but I am expecting great things from a few holdings that I am not likely to do a full write up before 2025, so the opportunity could be gone.

PS2: in a similar way, I don’t think that the write ups on SDI Plc or Alibaba were fundamentally wrong in the past years, despite the stocks being down like 70-80% since. Maybe they missed the short term economic or cycle impact. The final word is in 5 or even 10 years. I disclosed that I like the ideas: Link

The other publication is MadeInJapan

I am not a huge fan of Japan stocks, due to lack of growth and small payout ratios or prudent buybacks, but MadeinJapan is a growth investor that focuses exactly on what I look for in Japan. I own three growth companies in Japan, maybe more misunderstood accounting wise and business wise, but in a similar vein.

To be clear, I did not buy any of his names but I would consider it.

First he wrote about Genda, a very prolific serial acquirer. And acquiring in Japan allows for cheap yen financing and low multiples. The company is not as cheap as my other serial acquirers in portfolio, but very interesting.

Secondly he wrote about Alpha Purchase, and b2b distributor with a large growth and reasonable valuation.

Then he wrote about Real Estate SaaS Company: “TLDR: Real Estate SaaS Company down on a temporary issue. Should be trading at 10.5x P/E on a normalized basis once the results roll over”.

Lastly about Atled a company he is not bullish enough, but interesting nonetheless, a defensive. SAS company at 14 times PE. so check madeinjapan

I like Alpha Purchase more, then Genda (if only I understood it well!).

I like Atled Corp pretty well, 16 PE, potential for profit growth in the future.

I did not have the time with my tool development to really look at these write ups in detail.

Other than this,

Nelson: This Stock Could Be Like Buying Couche-Tard in 2004

Tier 1 Technology

Kitwave PLC

I don’t have much here. I have been watching Brazilian agriculture conglomerate Cosan that I owned previously. It is very cheap with some quality (Railway and Gas distribution) and some cyclical assets (Sugar, Ethanol, Vale). I do not like the stake in Vale which is not defensive.

I like some consumer discretionary stocks and Luxury stocks like LVMH, Burberry, Richemont but I feel that the worst is yet to come for these sectors. However they could become good buys soon. This is missing in my portfolio.

I like the “Made in Japan” ideas and will read them further.

Quality like Diageo or Ab Inbev is good, but I have cheaper EM picks in this space.

Adding to existing holdings is always good in terms of opportunity.

Supporting the publication gives access to:

• All the write ups - aiming for 10 a year.

• Full portfolio with diversified 50+ mostly EM/small value ideas with short pitches.

• Watchtlists in Koyfin with over 200 Emerging and Hidden champions stocks (free with Koyfin).

• “I have been a subscriber for over 30 years” Warren Buffett.