Why now?

Some readers have reached out and asked why I am currently posting so many new blog entries (spoiler alert: there is more in the pipeline). The answer is simple.

Since I started this blog roughly six years ago, the goal was always to look for cheap, out-of-favour companies trading at low valuations. Benjamin Graham famously said that the market is a voting machine in the short run but a weighing machine in the long run. Following that logic, there are times when attractively priced shares are plentiful – and other times when they are much harder to find.

As a consequence of geopolitical disruptions, an ever-changing tariff situation, and heightened uncertainty, some well-run and solid businesses – especially industrial companies – have been on sale. Adding to this, capital has been flowing heavily into US tech and growth stocks for years, leaving many solid European industrials trading at historically wide valuation discounts to their American peers. The recent turmoil has only widened that gap.

These moments never feel like good buying opportunities – that's precisely the point. If it felt comfortable, the stocks wouldn't be cheap. For patient investors willing to look past the noise, this may be an opportune time to take advantage of the short-term dislocation Graham was referring to.

I am not calling a bottom – nobody can – but at these valuations, time tends to be on the patient investor's side. Many of the companies I will be writing about have been on my watchlist for a while; the sell-off simply brought them into my target price range.

None of this means the storm is over – it may well get worse before it gets better. But the best time to go shopping is usually when nobody else wants to. The coming posts will focus on a handful of businesses that I believe the market is mispricing today, and I'll lay out the case for each one as clearly as I can.

Tecan Group AG (SWX:TECN)

Intro

Tecan Group is a Swiss laboratory automation specialist founded in 1980 by four engineers working out of a home office in Switzerland. Over the past four decades, the company has grown into a global leader in liquid handling, robotic workstations and detection instruments – the kind of equipment that pharma companies, diagnostic labs and university research departments rely on to process samples at scale. If you've had a blood test or a COVID PCR swab, there's a decent chance a Tecan-built machine was involved somewhere along the chain.

The company operates in two segments. Life Sciences Business sells instruments and consumables directly to end users. Partnering Business develops and manufactures OEM instruments and components that are then sold by diagnostic and medtech partners under their own brands.

The stock has dropped roughly 80% from its September 2021 peak of CHF 602, hammered by a post-pandemic destocking cycle, reduced pharma and biotech R&D spending, and a strong Swiss franc. Management just announced a transformation program called "Rewired" under new CEO Monica Manotas, who took the helm in August 2025.

Valuation

At CHF 121.60, Tecan's market cap is approximately CHF 1.55 billion. The headline numbers look ugly: a reported net loss of CHF 110.7 million in 2025, or CHF –8.74 per share. But that figure is distorted by a CHF 139.5 million non-cash impairment charge. Strip out that write-down and acquisition-related costs, and the adjusted earnings per share come in at CHF 6.87 – putting the stock at about 18x adjusted trough earnings.

Here's what makes this interesting from a balance sheet perspective: Tecan carries a net cash position of CHF 160.8 million. For a company generating CHF 138 million in operating cash flow per year with cash conversion running above 100% of EBITDA, that's a very comfortable setup. There is essentially no financial leverage to worry about.

In better years – 2022 and 2023 – Tecan earned around CHF 10 per share. Apply that kind of normalized earning power to today's share price and you're looking at a P/E in the range of 12–13x. Meanwhile, the dividend of CHF 3.00 per share – held steady through the downturn – yields about 2.5%, well covered by cash flow. On top of that, Tecan launched a share buyback program in August 2025 allowing for repurchases of up to CHF 120 million over two years – of which CHF 25 million had already been deployed by year-end.

What's next?

The near-term picture is not without risk. Life science spending remains soft, the Swiss franc continues to punish reported results, and potential new tariffs are adding another headwind. Management's 2026 guidance – low-single-digit local currency sales growth and an adjusted EBITDA margin of 15.5–16.5% – underwhelmed the market. The USD 1 billion Paramit acquisition, paid at the top of the cycle, has clearly not delivered what was hoped for, and the CHF 139.5 million impairment is management's admission of that.

But the underlying business is resilient. Tecan's instruments are embedded in customers' workflows – once installed, they generate recurring demand for consumables, software and service contracts. The medium-term target of CHF 1 billion in sales and a 20% adjusted EBITDA margin by 2028, if achieved, would imply a very different earnings profile from today's depressed figures.

A high-quality laboratory automation franchise with net cash, strong cash flow and deeply depressed earnings, trading at a fraction of its historical valuation – that's a setup patient investors tend to be rewarded for.

Current Price

CHF 121.60 per share

Disclosure

The author is currently long TECN.

Sodexo (EPA:SW)

Intro

Sodexo was founded in 1966, starting as a small catering company serving institutions and businesses. Nearly 60 years later, it has grown into one of the world's largest food services and facilities management companies, operating in over 40 countries with around 400,000 employees.

A key feature of Sodexo is its ownership structure. The Bellon family controls approximately 44% of the capital through their holding company Bellon SA, carrying nearly 59% of voting rights. In 2015, the family entered into a 50-year agreement preventing descendants from freely disposing of their shares – a strong signal of long-term commitment.

In early 2024, Sodexo spun off its employee benefits and vouchers business, Pluxee, which is now independently listed. This was a decisive move, transforming Sodexo into a pure-play food and facilities management company. The cross-shareholding with Bellon SA was also unwound the same year, with the proceeds returned to shareholders as a special dividend. In short, the group has been significantly simplified and is now fully focused on its core operations.

Valuation

At a share price of around €44, the market capitalization sits at approximately €6.5 billion. The stock has declined roughly 40% from its highs and is trading near its 52-week low.

For fiscal year 2025 (ending August 2025), Sodexo reported revenues of €24.1 billion, an underlying operating margin of 4.7%, underlying EPS of €5.37, and free cash flow of €459 million. The dividend stands at €2.70, representing a yield of roughly 6% at today's price.

At a P/E of around 8-9x underlying earnings, the stock looks remarkably cheap for a global market leader in an industry with long-term contracts and a high client retention rate. The balance sheet is in reasonable shape, with net debt at 1.8x EBITDA.

What's next?

In November 2025, Sodexo appointed Thierry Delaporte as its new CEO. Delaporte, formerly CEO of Wipro, brings a strong track record in operational transformation and knows the US market well.

Fiscal 2026 is positioned as a transition year, with guided organic revenue growth of just +1.5% to +2.5% and margins expected to be slightly below fiscal 2025. Not exciting in the short term. But the pieces are falling into place: a simplified business, a focused management team, a new CEO with a clear mandate, and a controlling family thinking in decades, not quarters.

If Sodexo can perform over the next few years, the combination of earnings growth and potential multiple re-rating could be very rewarding.

Current Price

€44.32 per share

Disclosure

The author is currently long Sodexo.

Georg Fischer (SWX: GF)

Intro

Georg Fischer is one of the oldest industrial companies in Switzerland. Founded in 1802, the company has survived and thrived for over 220 years through wars, economic crises, and multiple industrial revolutions. It has been publicly listed since 1903.

For most of its modern history, GF operated as a diversified industrial conglomerate with three pillars: piping systems, casting solutions, and machining solutions. That changed dramatically with the acquisition of Finnish company Uponor in late 2023 for approximately CHF 2 billion. This deal was transformational – it made GF the global leader in water and flow solutions and triggered a complete strategic pivot. The company subsequently divested its Machining Solutions and Casting Solutions divisions, completing the transformation into a pure-play Flow Solutions company by early 2026.

The underlying business model is solid. GF provides mission-critical piping and flow systems for water infrastructure, building technology, industrial applications, and increasingly, data center cooling.

Valuation

At a share price of around CHF 42, the market capitalization sits at approximately CHF 3.5 billion. The stock is down roughly 40% from its 2024 highs, punished by margin compression during the transformation period and weak construction markets.

There is an important subtlety here that many investors miss. GF reports under Swiss GAAP FER, not IFRS. Under these Swiss accounting rules, goodwill from acquisitions is offset directly against equity at the time of purchase. In plain English: the roughly CHF 1.6 billion in goodwill from the Uponor acquisition was charged straight against shareholders' equity on the balance sheet. It does not appear as an asset. This means that the reported book value looks significantly lower than it would under IFRS, where goodwill would sit on the balance sheet as an intangible asset. Investors screening for cheap stocks based on price-to-book ratios, or those simply glancing at the balance sheet, will see a distorted picture that understates what GF actually owns.

Looking at earnings, the current P/E of around 17-18x appears fair at first glance. However, 2025 was heavily burdened by transformation costs, restructuring charges, and the integration of Uponor. Looking ahead, the company has outlined its Strategy 2030 targets: CHF 4.2-4.5 billion in revenues with an EBITDA margin of 16-18%. At the midpoint, this implies roughly CHF 740 million in EBITDA. Applying reasonable assumptions for depreciation, interest, and taxes, normalized EPS could reach the range of CHF 4-5 by 2030. At the current share price, that would translate into a forward P/E of just 8-10x – quite compelling for a global market leader with resilient end markets.

Free cash flow tells a similar story. For 2026, management guides for CHF 175-200 million, which already implies a free cash flow yield of roughly 5-6% at today's price. The Strategy 2030 target of over 50% FCF-to-EBITDA conversion would push this meaningfully higher. The dividend stands at CHF 1.35 per share, paid for 15 consecutive years, currently yielding around 3.2%.

What's next?

The big question is execution. The portfolio restructuring is now essentially complete, and GF is a focused flow solutions company for the first time in its history.

The near-term outlook is admittedly not exciting – construction markets remain soft, semiconductor project delays persist, and foreign exchange headwinds weigh on results. But this is precisely the kind of moment contrarian investors should pay attention to. The business is not broken; it is being reshaped. The structural growth drivers – water scarcity, aging infrastructure, energy-efficient buildings, data center cooling – are secular trends that will play out over decades.

If GF delivers on even a portion of its Strategy 2030 ambitions, the stock will look very cheap in hindsight at current levels.

Current Price

CHF 42.26 per share

Disclosure

The author is currently not long Georg Fischer but is considering a position.

Update Warner Bros. Discovery (NASDAQ:WBD)

In January 2023 – nearly three years ago – this blog highlighted Warner Bros. Discovery. Since then, the company has made significant strides, notably reducing its debt and expanding its streaming business. These improvements have attracted attention from other industry players, leading to an acquisition offer from Netflix last week.

Following this development, Warner Bros. Discovery’s share price has approached the fair value estimate. Given this momentum, it could be an opportune moment to consider taking the profits and reallocating funds to other investment opportunities.

Since January 2023, the stock has surged approximately 175%. Congratulations to all readers who capitalized on this growth.

Current Price
$26.08

The Swatch Group Ltd (SWX: UHRN)

Introduction

Swatch Group has previously been covered on this blog – first on June 7th, 2020, and then again on April 25th, 2021, when it was highlighted as an opportunity to sell the stock at a decent gain, less than a year after the initial write-up.

Since then, the company has experienced some turbulence. Sales have weakened, culminating in a disappointing 2024 financial year with a notably low operating profit. Meanwhile, governance issues, particularly surrounding CEO Nick Hayek, who also represents the company’s largest shareholder group, have drawn negative attention. The combination of operational underperformance and management criticism has driven the share price down to below CHF 27, a stark decline from over CHF 90 in 2018.

Valuation

Despite these headwinds, Swatch’s balance sheet remains strong. As of the end of 2024, the company holds:

• CHF 1+ billion in cash
• CHF 7.6 billion in inventory
• CHF 3.1 billion in property, plant, and equipment
• Virtually no financial debt

This results in total equity of over CHF 12 billion, while the market capitalization currently stands at approximately CHF 6.9 billion. This implies a price-to-book (P/B) ratio of just 0.57x, which appears quite low for a company with a globally recognized brand portfolio. Of course, current profits are depressed, and a turnaround will be needed to unlock value.

What's next?

The numbers are weak, governance is contentious, and many investors have lost patience – leading to selling pressure. That said, Swatch remains financially sound, with high autonomy thanks to its debt-free structure. From a valuation standpoint, the stock looks cheap.

Could investor sentiment turn? It’s possible. A shift in consumer perception or improved profitability might drive renewed interest. Furthermore, rumors persist that the Hayek family pool, the largest shareholder, may look to increase its stake or even consider taking the company private – a scenario that would certainly change the game.

Current Price

CHF 26.47 per registered share

Tonnellerie Francois Freres SA (EPA:TFF)

Intro

Tonnellerie Francois Freres SA (TFF Group) is a leading manufacturer of oak barrels and casks, catering to the wine and spirits industry. With a deep-rooted heritage in cooperage, the company has successfully expanded into whisky and bourbon aging, diversifying its revenue streams beyond traditional wine barrels.

Since its foundation, TFF has remained under the stewardship of the Francois family, now in its fourth generation, which currently holds a 71% ownership stake. The remaining shares have been publicly traded on the Paris stock exchange since 1999.

Valuation

Due to cost pressures and slowing demand, the stock has declined nearly 50%, now trading at a price-to-book (P/B) ratio of approximately 1.08 – just slightly above book value.

Additionally, the company has accumulated a sizable debt position following significant investments in bourbon production capacity to capture anticipated growth. With the majority of these investments now complete, the next phase will likely focus on reducing indebtedness.

Financial years 2023 and 2024 were strong, with earnings per share (EPS) of €2.44 and €2.60, respectively. While financial year 2025 is expected to be more challenging, the company’s long-term fundamentals seem to remain solid.

What’s next?

Looking ahead, TFF's expansion into American whiskey and bourbon cask production is poised to be a key growth driver. While short-term uncertainty persists, the company’s core strength in high-quality barrel production remains intact, positioning it as a compelling long-term opportunity. If TFF can regain solid growth momentum and reduce capital expenditures, significant free cash flow generation could follow.

Current price

€24.70 per share

Disclosure

The author is currently long TFF.