March 2024 Portfolio Update
March was the second month dedicated to Substack to migrate most of my Seeking Alpha coverage and additional (European) small-cap coverage to the paid tier. This will be exclusive content to this Substack. I published a lot of content, including my investment cases for Pluxee, Ulta Beauty, Frosta AG and Robertet. After the successful collaboration with the StockOpine newsletter last month on the relationship between margin and multiple expansion, I collaborated with The Compounding Tortoise newsletter about what makes a good serial acquirer. I’m looking forward to collaborating more in the future to bring more value to my subscribers and share other high-quality publications. Lastly, I also shared a free post explaining Net Working Capital and its importance in fundamental analysis and I shared my inverse DCF template with paid subscribers.
Last month, Substack introduced followers, a new way for people to follow a publication without receiving E-mails. I like this feature and loved seeing the continued growth in the publication in March. Heavy Moat Investments now has over 3,000 total subscribers and 3,650 total followers and is approaching my annual goal of 100 paid subscribers.
Thank you all for your support. I’m looking forward to seeing the development over the following years. The button below offers a 15% discount through April 1st.
Portfolio Update
In March, I purchased a new company: Frosta AG, a growing German frozen food manufacturer with secular tailwinds. I already owned the company back in 2020 before doing fundamental research. Four years later, it trades at a cheap valuation, and the fundamentals improved. Again, I bought more Pluxee shares at this compelling valuation. I’m happy to continue increasing my European exposure. The portfolio increased by 3% in March, trailing the S&P 500 (4.3%) but beating the Nasdaq 100 (2.5%). The top contributors were Atkore (ATKR +18%), Carlisle (CSL +14%) and Stemmer Imaging (12%), while Napco (NSSC -10%) and Alimentation Couche Tard (ATD -8%) detracted the most. Let’s talk about Stemmer and Napco briefly.
Stemmer Imaging released its full-year 2023 results this week and announced an acquisition. Despite the stock going up, I wouldn’t say I liked the report and I will dive deeper into it in an upcoming article.
Napco again had a large insider sale by its CEO and founder. This has put a lot of pressure on the stock, but it hasn’t been the first such incident since I invested in the company in late 2022. Mr Soloway has run the company for 50 years and is looking to retire eventually. Diversifying his stake in the business makes sense. I’d love to keep a large anchor shareholder, but it isn’t a game-changer.
Thank you for reading Heavy Moat Investments. Next week, I’m looking to publish a deeper review of Stemmer Imaging's full-year release and the fundamental analysis for Robertet. Afterward, I’ll start working on the subsequent full analysis.