September 2024 Portfolio Update

A tough time

September was a bad month plagued by sickness and underperformance. I was knocked out half of the month by Influenza and did not manage to write nearly as much as I wanted.

I commented on Intel’s current situation, made a quick pitch on an Italian small cap at 10x EV/EBIT and responded to the Napco short report. Furthermore, I made a valuation update on ASML and the second part of my Nemetschek deep dive. Lastly, I also commented on a stock I sold.

I felt bad for not being able to write, so I offered my largest discount yet with 25% off the subscription via the button below. Make sure to use the offer until I post my next piece of writing and access all of my existing and future work.

The publication continued to grow, adding 411 subscribers and almost 1,000 followers. Thank you for all the support.

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Portfolio Update

I sold my position in UFP Industries, a US wood-based manufacturing and distribution business, in September. I shared my reasoning here. UFPI is a great business, but it was the lowest conviction in my portfolio and wasn’t trading too cheaply. On my quality scorecard, it scored second to last place, driven by strong cyclicality and lack of real moat. The company has an amazing compensation structure, but I felt my capital would be used better elsewhere.

I reallocated the proceeds and additional funds to ASML (which I finally bought again after two years while it dropped under 700€), Frosta, Napco and Pluxee. I have fully built out my Pluxee position, and it is my largest cost base by far. I now want to see the market reward the company and rerate it.

I also want to share another feature of finchat.io: weighted portfolio metrics. Here, you can see how the average company in my portfolio would look. I’m very happy with the strong past revenue growth, margins, ROIC >15% and high FCF conversion. The valuation is getting a bit high, but that’s okay if I buy cheap with incremental cash.

September was another weak month from a performance point of view. The portfolio lost a percentage point but was held up by Carlisle (+8%), Robertet (+6%) and Adyen (+6% and now my #1 position again). Pluxee was again my worst performer, dropping another 11%. Napco (-8%) and Atkore (-9%) also detracted meaningfully.

This is one of those periods where I am glad to be an individual investor without anybody I need to please but myself. I am convinced that my companies are of high quality and that I bought them at fair prices. Right now, I’m underperforming as my European stocks don’t go anywhere, and short reports have hit me on Napco and Atkore. These are challenging times for an investor, but I’m sure better times will come again. Of course FOMO also hits, because it’s tough to underperform while everybody is making money. I’m fortunate not to have debt or any pressure to sell out of positions. I can just continue to buy shares based on fundamental research and let time do the rest.

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