October monthly update
Summary.
Newsletter update
Company update
Write ups
Quantitative watchlist
European Language Ideas
Manual deck (watchlist)
Movements and ideas
I hope you are all doing ok there. This month I was a bit more busy than normal with personal stuff, work challenges and distraction from the conflict in the middle east that makes it hard to focus. This update will be a bit lighter then.
You are now over 3200 subscribers. That is awesome and I don’t know if I deserve it, but I will keep sending original ideas.
THE HIT
Oh yes, the small caps and value markets are getting destroyed at the moment. My portfolio is also feeling the hit while being still up for the year.
Some stocks in France took a -60% or -65% in a day, that I don’t think are really justified. They could be opportunities.
Worldline is a payment company. Xilam is a cartoon developer that I used to own. There are very unusual falls after earnings and warnings these days, which is a sign of a bear market.
As I was busy I did not research new companies, but I published an analysis of Berentzen Group, a cheap german drinks company. There are some challenges as the latest results are a bit lower than last year due to cost explosion.
Also, when some of your companies are falling 30-50%, there is less incentive to find new bargains, as they are here in our portfolios.
One company update that is relevant to me is that the stock of Bastide le confort, a french healthcare serial acquirer totally crashed from the 30 Euros range to 21 Euros now, but the annual results published were solid, with some challenge due to debt costs rising. https://bastide-groupe.fr/wp-content/uploads/sites/7/2023/08/Communique-2022-2023-revenue_vdef.pdf
Berentzen Group, that I wrote up, published weak results impacted by inflation, but still a healthy profit.
Some UK consumer stocks and EM stocks I reviewed posted weak results. They are not impaired.
Cafom, the furniture retailer in overseas France, almost bought a local Guyana airline out of bankruptcy but pulled out when the conditions of government support were not there and no-one bought the airline. I think that it tells about the opportunistic investor that it is, and that of its good local position in these overseas markets.
Other companies like Intrum, the debt management company, saw increase in servicing revenue but a higher increase in costs. Such is value investing, investing before things get rosy. The capital allocation will now focus more on debt repayment. I have yet to correctly analyse the results. press release
Medical net in Japan recorded higher revenue and lower income due to recruiting new teams to continue to grow.
In investing, I think more and more that quarterly revenues and profits do not matter much, but that on the other side acquisitions and capital allocation matter more. There was no major acquisition or disposal in the companies.
My global view is that rates and inflation cannot stay that high in a no growth developed world, so all these effects should be temporary. Nobody spends, nobody buys homes, there is no way that our governments will keep rates like this.
Energy can cause some more inflation, but probably not to the level of the post covid price raising panic.
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 the cheapest stuff in EMs and DMs based on P/E.
Some crazy value out there, with JD.com, a sort of Chinese Amazon, joining the pack. It is maybe a bit cyclical with a lot of white goods and electronic products sold, but it is interesting.
DMs:
WE ARE IN CHEAP LAND!
I think that a basket of these will do fine.
Lindbergh SPA - Italian maintenance servicer
Here I want to note that Jeremy from French hidden champions launched a full investing service.
He meets managements in his regions and is an investor different than me, more concentrated and more able to “watch paint dry” than me. Funnily, we have no position in common, I used to own Bollore. I could own it again in theory.
He published 10 articles and notes in October 2023, like this one on Media and Travel retail company Lagardere: Link
These are very to the point, with important feedback rather than descriptive aspects.
Here are 5 good ideas written in French and Spanish:
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