The Shares Researcher

Intro IVF Hartmann has been one of the leading Swiss companies in the field of medical consumer goods for 150 years with its headquarters in Switzerland. Since 1993, IVF has been part of the international Hartmann Group based in Germany, who also owns 66.3% of IVF Hartmann. The remaining 33.7% are free float and due to the tiny market cap, the shares are quite illiquid (yes, that’s a warning for all those who don’t like illiquid stocks).   Especially due to its disinfection segment, the company had a very successful 2020; that being said, in 2021 the demand for its products has decreased, be this for their disinfection products or goods related to hospitals. Valuation For the last five years, IVF has shown a very consistent EPS in the range of CHF 5.07 and 7.43 (2020). Thus, a normalized EPS of around CHF 6 translates into a P/E of around 20x. Not dirt cheap, however, one is getting a very solid business which is completely debt free (yes, that still exists). What’s next? IVF Hartm...

Intro Altice USA is one of the largest broadband communications and video services providers in the US, delivering broadband, video, mobile, proprietary content and advertising services to more than 5 million residential and business customers across 21 states. While the video segment has lost some ground in the last years, broadband was able to more than compensate for it. Altice USA went public at $30 per share in 2017. After trading as high as ~$37 per share, the price has recently gone back to its low in 2018 at approx. $15 and shows attractive valuation metrics. Valuation From 2018 to 2020, the company has increased revenues from $9.6bn to $9.9bn, while adj. EBITDA has grown from $4.2bn to $4.4bn. This translated into free cash below between $1.2bn and $1.9bn. The first nine months of 2021 depict an adj. EBITDA of $3.3bn and a free cash flow of $1.3bn, making one assume that 2021 will likely show similar numbers as last year. With a market cap of $6.9bn and net debt of $24.6bn, EV...

Intro Today we’ll look at two companies at the same time. Why two you might ask? Because they have very similar characteristics in many ways. Both companies have been spun off recently by a large pharmaceutical company – Viatris from Pfizer and Organon from Merck. Furthermore, they show the following similarities: -High debt load due to one-time payment to parent company -Stagnating revenues and hence a lack of growth -Significant cash flow generation from existing products -Small market capitalisation compared to the parent company -Tiny or no dividend pay-out yet in order to reduce debt burden -Limited analyst coverage The above points might have led investors – that got the shares from the parent company – to sell them in the open market. As can be seen below, the valuation looks rather undemanding and might show good upside potential in the next two to five years. Valuation The two firms show a very undemanding valuation based on historical and short-term future numbers: Viatris gu...

Intro There is probably no intro needed for Gamestop, the ultimate meme stock that ran from less than $20 to around $235 per share in no time this year. Disclaimer: At current trading levels, it is very unlikely that Gamestop will be able to show future results that will justify the very lofty valuation and buying the stock now is pure speculation. With the significant increase in its share price, volatility rose substantially as well – and this is where it may get interesting. One, or probably the most, important parameter to calculate an option price is volatility. Volatility is measured in percentage and “boring”, mature stock usually show a volatility in the range of 15-20% and levels of above 50% are considered elevated volatility. Gamestop’s volatility is above 170% and therefore all Gamestop options outstanding are expensively priced by looking at the volatility. As will be further described below, a possible strategy might be to sell deep out of the money put options and profit...

Less than a month ago, I posted about Spice Private Equity. In the meantime, the sale of its stake in Leon Restaurant has been completed and the majority of the cash received. This is, of course, good news and the share price bumped from less than $10 to almost $16 per share. Last month, it was outlined that the target price is around $15. Even under the most optimistic scenario, it is a ‘present’ that the price increase has happened so fast and why not lock in the profits reached in such a short time frame?

Today, we are going to look back and talk about some potential changes in the stocks discussed since the beginning of 2020. Due to the very benign stock market after the initial COVID-19 shock, most of the shares discussed on here have done rather well, some even extremely well. After such a huge recovery, it might be wise to quickly check the initial investment thesis and potentially make some changes where the stocks have reached the estimated intrinsic value. Let’s go over the potential changes one-by-one: -La Doria: Having hugely benefited from the crisis, it seems that the valuation is now closer to intrinsic value. Reminder: The price per share was below €9 when initially discussed on here and trades now at around €17. Although there is no doubt that the company will operate well in the months and years to come, it might be prudent to lock in some or all of the profits. All in all, the stock has advanced roughly 88% in local currency, not including dividends. -K-Bro Linen...

Intro Spice Private Equity is a Swiss stock market listed investment company focused on global private equity investments. The portfolio is split into the following categories/companies (‘fair market’ value as of end of 2020 in brackets): Leon Restaurants ($33m)   Bravo Brio ($26m)   G2D Investments ($18m)   Rimini Street ($13m)   Legacy Portfolio ($12m)   Cash and other current assets ($24m) In sum, the portfolio is valued at ~$126m in the company’s books and with 5.4m shares outstanding this translates into a book value (NAV) of ~$23 per share since there is literally no debt in the company. A word of caution for Spice Private Equity: trading liquidity is rather limited and might be too low for certain investors (largest shareholder holds around 60% of the shares). Further, although listed in Switzerland, the shares are trading in US dollars. Valuation The stock is currently trading at $9.25 – compared with an NAV of $23 at the end of 2020, a hug...

Intro Basler Kantonalbank is a mid-sized Swiss bank with deep roots in the Canton of Basel, where it was founded in 1899. The bank is fully owned by the Canton Basel City, however, has listed participation certificates listed on the Swiss stock market. The bank enjoys a very strong balance sheet with a total capital ratio of around 19% (vs. a minimum of 12%) and leverage ratio of above 10% (vs. a minimum of 3%). Historically, Basler Kantonalbank was strongly focused on its own Canton, as is the case with almost all cantonal banks in Switzerland. For a few years however, the bank has been pushing the roll out of its ‘online-bank’ under a separate entity called Bank Cler, which is not tied to specific locations anymore and potentially shows good growth potential as more and more bank clients use easy to use apps on their smartphones.   Valuation The capital of the owners is basically split into two categories: The first is the endowment capital, which is fully held by the C...