July 2024 Portfolio Update
Greetings from Wacken Open Air festival
July was a tough month with a lot of volatility and deployed capital. As long-term investors, we should cherish declining stock prices if we are still in our accumulation phase and plan to regularly contribute incremental cash to our portfolios. As we speak, I’m enjoying myself at Wacken Open Air for the week. I prepared this article last Sunday, so the portfolio update will be as of last Friday’s close! I also scheduled a new deep dive while I’m gone in the coming days.
In July, I published an analysis on Verra Mobility and Adyen. I also published my second Stock Spotlight, a new monthly format where I highlight interesting investment ideas from my investable universe. The first idea is for all (Robertet), and the rest is for paid subscribers. In hindsight, I am not entirely happy with the name, and the posts haven’t been as well received as I’d hoped. I might try to use another name for the next iteration of the format.
To kick off the next earnings season, I published updates on Pluxee, Stemmer Imaging, RCI Hospitality RICK 0.00%↑ and Frosta.
The publication saw an acceleration again, adding 445 subscribers and over 900 followers. We’re close to the next milestone of 5,000 subscribers and crossed the 7500 followers milestone! Thank you for all the support.
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Portfolio Update
In July, I had to sell Stemmer Imaging after the company announced its acquisition by American Private Equity firm MiddleGroup Capital. I never had a company of mine taken over before, and it felt weird. I reviewed the deal in more detail in the linked article and checked if shareholders got a good deal with this acquisition. As a result of the takeover, I made all Stemmer Imaging articles free. If you want to get an idea of my premium work, consider checking out these old articles:
I used the proceeds from the sale to fund buys in some of my existing positions:
Adyen has traded down since the last earnings update, which is unjustified, in my opinion, but it is now back into interesting territory.
Since its last earnings, Pluxee has seen a relentless drawdown alongside its peer Edenred. Both companies showed fine results, but the overall industry seems out of favor. I believe that the market is overreacting to non-material situations like possible regulations in France (which might even benefit both companies after listening to the Edenred call).
I still have some cash left over, which I’ll reinvest soon.
I added to my Sartorius Stedim position and partially funded it with Danaher shares, making my bioprocessing/life sciences more of a basket approach. While selling a high-quality business like Danaher is never easy, I see a much better risk/reward with Sartorius. Sartorius’ Management has lost credibility, but they’ve been able to build a fantastic company, and as the market goes back to its usual behavior, I expect them to do well. Right now, Sartorius is cheaper than Danaher, while historically, Sartorius always traded at a premium due to its pure-play focus on bioprocessing.
Finally, I bought some more Robertet and Frosta. The companies did not experience any special events or large drawdowns, but they moved down a bit and into very attractive territory again. I linked my deep dives on both companies above.
My US exposure continues to shrink as I currently deploy most of my capital into European stocks. Additionally, I aim to reduce my cyclical exposure, and if markets continue to sell off, I’d be happy to concentrate more on my best risk/reward ideas.
Industrials are my largest industry right now, but I’d argue that Pluxee shouldn’t be an industrial as a digital marketplace and payment processing company.
