quant value 2013 12 mfie

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December 2013 1 2 December 2013 Vol. 4 No. 12 Newsletter Strategies are back Due to popular demand I have removed the company description in the portfolio tables at the end of the newsletter and replaced it with the screener strategy I used to select the company. Do you know all the order types? I am sure, especially if you use an internet based stock broker, you have seen or used some of the different types of orders you can choose from. But do you know what they all mean? And do you know that they can also increase your returns by giving you a lower purchase and a higher selling price? Below is a quick overview of the different order types and how you can optimally use them. Easy to understand Even though the terms may sound odd at first don’t worry they are all very easy to understand once you have worked through an example. Market Order This is the simplest and the quickest order to execute. When you give a market order your broker will sell or buy a stock at the current market price, whatever it may be. Depending on the market conditions, your order may not always get executed at the price you think it will. For example, if there is a lot of volume traded, you may get a price close to the last price when you give your order. Be careful Be careful though as market orders may move the stock price substantially if the volume of your order is high compared to what is traded at the time (for example with some of the smaller companies recommended in the newsletter). Only use it when You should thus use this type of order only when you desperately want to buy or sell a security regardless of the price or if your order volume is small compared to the volume traded in the market. Gives you no control A market order gives you as the buyer or seller no control over the price but it will ensure that your order gets executed if there is enough volume to do so. I only use market orders when buying very large market value companies, where the amount of shares I want to trade is only a small fraction of the daily volume. Low cost as easy to execute In terms of brokerage costs market orders are the most inexpensive type of orders you can place because your broker does not have to go to much trouble to get them executed. Limit Orders These types of orders are as popular as market orders; however, they have a major advantage because they let you control the price at which the order is executed. As the name suggests, with a limit order, you tell your broker to buy or sell the security at a maximum or minimum price. Only be executed when The order will only be executed if the price is within the limit you have set. For example, if you set a buy limit order for €50 but the current market price of the stock is at €60, the order will not be executed unless the price drops by €10 to €50. Control your buy and sell price

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December 2013

1

2 December 2013

Vol. 4 No. 12

Newsletter

Strategies are back

Due to popular demand I have removed the company

description in the portfolio tables at the end of the

newsletter and replaced it with the screener strategy I

used to select the company.

Do you know all the order types?

I am sure, especially if you use an internet based stock

broker, you have seen or used some of the different

types of orders you can choose from.

But do you know what they all mean?

And do you know that they can also increase your

returns by giving you a lower purchase and a higher

selling price?

Below is a quick overview of the different order types

and how you can optimally use them.

Easy to understand

Even though the terms may sound odd at first don’t

worry they are all very easy to understand once you

have worked through an example.

Market Order

This is the simplest and the quickest order to execute.

When you give a market order your broker will sell or

buy a stock at the current market price, whatever it

may be.

Depending on the market conditions, your order may

not always get executed at the price you think it will.

For example, if there is a lot of volume traded, you

may get a price close to the last price when you give

your order.

Be careful

Be careful though as market orders may move the

stock price substantially if the volume of your order is

high compared to what is traded at the time (for

example with some of the smaller companies

recommended in the newsletter).

Only use it when

You should thus use this type of order only when you

desperately want to buy or sell a security regardless of

the price or if your order volume is small compared to

the volume traded in the market.

Gives you no control

A market order gives you as the buyer or seller no

control over the price but it will ensure that your

order gets executed if there is enough volume to do

so.

I only use market orders when buying very large

market value companies, where the amount of shares

I want to trade is only a small fraction of the daily

volume.

Low cost as easy to execute

In terms of brokerage costs market orders are the

most inexpensive type of orders you can place

because your broker does not have to go to much

trouble to get them executed.

Limit Orders

These types of orders are as popular as market orders;

however, they have a major advantage because they

let you control the price at which the order is

executed.

As the name suggests, with a limit order, you tell your

broker to buy or sell the security at a maximum or

minimum price.

Only be executed when

The order will only be executed if the price is within

the limit you have set.

For example, if you set a buy limit order for €50 but

the current market price of the stock is at €60, the

order will not be executed unless the price drops by

€10 to €50.

Control your buy and sell price

December 2013

2

2 December 2013

Vol. 4 No. 12

Newsletter

Limit orders can thus be used to control the buy and

sell prices of your investment.

May cost a bit more – worth it

Note that you may need to pay a slightly higher

commission when you place a limit order. But if the

volume traded in the company is low it is always

worthwhile.

But your order may not be executed

But you must remember that with a limit order your

order may not get executed is the price you set is not

reached.

For example you set a sell limit order at €40 and the

current price of the stock is €30. If the price does not

reach the limit you set or higher, your order will not

be executed.

Similarly a buy limit order will only be executed at the

limit price or lower.

Limit order variations

It is also possible to further restrain buy and sell limit

orders.

This can be done with a FOK (Fill or Kill) and an AON

(All or None) orders.

Execute or cancelled

When you place a FOK limit order, it will either be

executed in full or cancelled (executed in full here

means buy the number of shares you ordered).

All or nothing

On the other hand an AON limit order will only be

executed in full.

This means that you will either buy or sell the

complete number of shares you ordered or the order

will not be executed.

If the order cannot be executed it will not be cancelled

(as is the case with a FOK order) but will be held for

later execution up to the date of the order’s expiry.

Use AON when

The AON is a very good type of order to use when you

are buying or selling illiquid shares (as some of the

small companies the newsletter recommends).

It will avoid multiple transactions of a small number of

shares that can be very expensive in terms of

brokerage.

Not always available

Unfortunately this type of order is not available from

all brokers and at all stock exchanges.

Stop or Stop Loss Orders

Stop orders can be placed when you are buying or

selling shares.

Used to limit losses

They are used to either buy a share or sell if a certain

price is exceeded. They are however mainly used to

limit your losses by protecting you from a big drop in

the price of a stock.

With a stop loss order, you tell your broker to sell a

share if it falls below a certain price.

Below the market price

Stop loss orders are generally set below the current

market price. Which means if the price later falls to

this price, the broker will execute your stop loss order.

For example you own a share, currently trading at €40

per share and want to limit your losses by selling it if

the price falls to €30. You would then place a stop loss

order at €30. This means as soon as the share price

falls to €30 your broker will automatically sell the

share.

Important - Becomes a market order

It’s important for you to keep in mind that when

triggered your stop loss order becomes a market order

and it will be executed at the current market price.

For example when you use a sell stop loss order, you

are instructing your broker to sell the security at the

best available price when the stop price has been

reached (see Market Orders above).

December 2013

3

2 December 2013

Vol. 4 No. 12

Newsletter

If the price of a stock stays above the stop price you

set the stop loss order will not be executed.

Alternatively, you can also use the buy stop order

(below the current market price) to take advantage of

a declining market so you can buy a stock once a

certain lower price has been reached.

Stop limit order

This type of order combines the features of a limit as

well as a stop order.

When stop is reached limit order triggered

Once the stop price is reached; instead of a market

order (like in case of normal stop orders), the stop

limit order turns into a limit order.

This means that the security is bought or sold at no

more or less than your specified limit price.

This type of order is a good choice when placing stop

loss orders for illiquid shares.

But may not be executed

Be careful if you want to use this type of order to limit

losses, because if the stock price has fallen enough to

exceed your stop price it may also have fallen past

your limit price.

This means your stop limit order will not be executed.

Trailing Orders or Trailing Stop Orders

Like the name suggest, a trailing order is essentially a

stop order where the stop price is not fixed.

Stop price a percentage change

A trailing stop order is thus similar to the regular stop

orders but the stop price which is set as a percentage

change from the price of a security.

This means if the price of a share were to fall by 10%,

the order will be triggered. A trailing stop order can

thus be very effectively used to protect your profits.

If you have a profit on a position you can use the

trailing order to follow the price of the security. If the

market value of the stock declines by a percentage

you specified, the trailing stop order will become a

market order (see market order above) and will be

executed.

On the other hand, if the price continues to rise the

trailing order will follow it and allow you to participate

in further gains.

Trailing stop limit order

This type of an order combines the features of both

the trailing order and the limit order.

Instead of becoming a market order when triggered a

trailing stop limit order becomes a limit order (see

limit order above).

Day order

You would use this type of order if you want to only

have your order to be valid for one day.

Your order will thus be cancelled when the market

closes.

Good –Till-Cancelled-Order (GTC)

This type of an order can theoretically be in force

indefinitely; however your broker may set a limit on

such orders for example 90 days.

As the name suggests, these orders are in effect until

you cancel it.

Immediate-or-cancel order (IOC)

This type of order is either executed immediately or

cancelled.

However, unlike fill or kill orders an IOC order can be

partially executed.

Market on Close and Market on Open (MOC & MOO)

These types of orders will ensure that you get the

open or close price (or close to it) respectively on the

day for which you place the order.

December 2013

4

2 December 2013

Vol. 4 No. 12

Newsletter

One cancels the other order (OCO)

This type of order is used if you have two orders in the

market but you only want one of them to be executed.

The execution of the one order will automatically

cancel the other order.

Here is an example.

If you are invested in Microsoft at $20 a typical OCO

order would be a stop loss order at $15 and a sell limit

order to take a profit at $27. If one of the orders is

executed, the other is automatically cancelled.

As you can see that are a lot of order types what give

you quite a lot of opportunities to limit losses, lock in

gains and give you a better buy or sell price.

The first step you should take is to look at what order

types your broker offers and how they are defined.

This is important as the exact nature of an order may

differ slightly from broker to broker.

Once you have learned what is available start using

them to your advantage.

Now for this month's recommendations.

This month's ideas

In Europe I am recommending two French based

companies. The one is engaged in the perfume and

cosmetics business and the other provides software,

computer aided design (CAD)/computer aided

manufacturing (CAM) equipment.

In North America I have found a diversified

manufacturer of engineered industrial products and a

Canada-based company that provides pipeline and

facility construction and maintenance services to oil

and gas companies.

Portfolio changes

Portfolio changes this month:

Europe – Sell two

Sell Creston (+24.1%) and Picanol (+26.0%) both

recommended a year as they are not in the

investment model.

North America – Hold two

Continue to hold Gamestop (+84.2%) and Harris

Corporation (+37.6%) as they are also both still in the

investment model.

Year to date performance

European portfolio – year to date +48.5%

In spite of the European markets also increasing nicely

(STOXX Europe 600 Index is up 16.6%) the European

portfolio has done very well and is up 48.5%

(excluding dividends) so far.

North American portfolio – year to date +37.4%

The North American portfolio is also doing well and is

up 37.4% so far this year (S&P 500 up 26.6%).

Wishing you profitable investing

5 2 December 2013

Vol. 4 No. 12

Interparfums SA – Europe

Source: Reuters

Executive Summary Recommendation Buy

Recent Price (Closing price on 29.12.2013 Paris Stock Exchange)

31.47 €

Security No. (ISIN) FR0004024222

Reporting Currency Euro

Market Capitalisation €761.6 million

Company Location France

Main Exchange Paris

Shares outstanding 24.2 million

Average daily volume (last 10 days) 19 280

52 week range €19.91 to €32.00

Insider ownership 34%

Fiscal year end December

Suggested portfolio weighting 2%

Disclosure I have a position

Source: Financial Times, www.4-traders.com and company website

Description

Interparfums SA (Interparfums) is a French company

that is engaged in the perfume and cosmetics

business. The company manufactures and distributes

perfumes through license agreements with brands in

the ready-to-wear, high fashion, jewellery, and

accessories sectors.

The company for example offers products under the

Balmain, Boucheron, Jimmy Choo, Karl Lagerfeld,

Lanvin, Montblanc, Nickel, Paul Smith, Repetto, S.T.

Dupont, and Van Cleef & Arpels brand names.

Interparfums sells mainly perfumes (98.2% of 2012

sales); and sales by geographic segment for 2012 were

as follows:

North America – 23.0%

South America – 8.0%

Asia – 16.4%

Eastern Europe – 8.6%

Western Europe – 24.4%

France – 7.9%

Middle East – 10.5%

Africa – 1.2%

In July 2012, British luxury brand Burberry paid

Interparfums €181m to terminate its nearly 20-year

partnership with the company.

At the end of 2012, the company employed 205

people across its offices in France, Europe, North

America and Asia.

Valuation Metrics EBIT/Assets 78.2%

EBIT/EV 41.1%

Dividend Yield (TTM*) 1.56%

Price to Earnings (TTM*) 4.9

EV to Free Cash Flow 3.5

Price to Book 2.1

Price to Sales 1.6

*TTM = Trailing 12 months

Source: Annual report, Financial Times, Reuters and company

website.

Recent results

In the third quarter (Q3) like-for-like sales increased

33.5% to €74.2 million in the third quarter of 2013

compared to €55.6 million during the same period in

2012.

The increase was driven by strong growth of

Montblanc (+48%) and Jimmy Choo (+47%) fragrances

and successful launches of Repetto fragrance and

Boucheron Place Vendôme eau de perfume.

Including Burberry brand sales, however, this was a

decline of 37.6% compared to €118.9 million in the

third quarter of 2012.

For the first nine months of 2013, like-for-like sales

increased 20.1% to €193.8 million from €161.3 million

the previous year.

For the half year to June 2013 (no profits reported in

Q3) operating profits increased 87% to €54.7m, net

profit before tax was up 94% and earnings per share

up 70% due to the higher sales mentioned above and

lower advertising expenses. Numbers include Burberry

sales up to March 2013; profits excluding Burberry

were not given.

Outlook - 2013

Due to the expansion of its brand portfolio, especially

Montblanc and Jimmy Choo; management expects

total 2013 sales to reach €340 to €345 million (2012:

€445 million).

Summary and Conclusion

Interparfums is an undervalued French cosmetics

company with good price momentum.

Further Reading

Company Website

Investor Relations

Annual Reports

Financial Times Summary

6 2 December 2013

Vol. 4 No. 12

Lectra SA – Europe

Source: Reuters

Executive Summary Recommendation Buy

Recent Price (Closing price on 29.12.2013 Paris Stock Exchange)

7.37 €

Security No. (ISIN) FR0000065484

Currency Euro

Market Cap €214.7 million

Company Location France

Main Exchange Paris

Shares outstanding 29.13 million

Average daily volume (last 10 days) 25 330

52 week range €4.59 to €7.50

Insider ownership 38%

Fiscal year end December

Suggested portfolio weighting 2%

Disclosure I have a position

Source: Financial Times, www.4-traders.com and company website

Description

Lectra SA (Lectra) is a France-based company that

provides software, computer aided design (CAD) and

computer aided manufacturing (CAM) equipment, and

related services for industries using fabrics, leather,

textiles, and composite materials.

Lectra serves large corporations and medium-sized

companies in the fashion, automotive, and furniture

markets, as well as in the aeronautical, marine, and

wind power industries.

The company reports its business operations in the

following geographical segments:

Europe (47.3% of 2012 sales)

Americas (25.3% of 2012 sales)

Asia-Pacific (21.1% of 2012 sales)

Other countries(6.3% of 2012 sales)

At the end of September 2013, the company had more

than 1,400 employees worldwide.

Valuation Metrics EBIT/Assets 60.7%

EBIT/EV 10.0%

Dividend Yield (TTM*) 3.0%

Price to Earnings (TTM*) 9.9

EV to Free Cash Flow 17.5

Price to Book 3.3

Price to Sales 1.1

*TTM = Trailing 12 months

Source: Annual report, Financial Times, Reuters and company

website.

Recent results

Sales increased 11% to €50.8 million in the third

quarter (Q3) of 2013 compared to €47.8 million during

the same period the previous year. The increase was

driven by growth in both new systems sales and

recurring sales.

Income from operations in Q3 amounted to €6.1

million, up 32% as a result of the natural drop in

overhead costs over the summer vacation months.

Net income was up 12% to €4.2 million in the third

quarter of 2013 and earnings per share increased 15%

to €0.15 per share compared to €0.13 per share, the

previous year.

For the first nine months of 2013, sales increased 2%

to €150 million.

Income from operations decreased 7% to €23.2

million and net income decreased 9.3% due to a major

recruitment plan to strengthen sales and marketing.

The above numbers do not include a non-recurring

receipt of €11.1 million due to the end of litigation

against a competitor. If it is included earnings per

share increased 91% to €0.65 per share.

Outlook

Management said that forecasting remains difficult in

the current economic climate and is cautious with

regards the orders and sales from new systems for Q4.

Also the increase in overhead costs resulting from the

acceleration of the transformation plan and the

unfavourable development of the euro/dollar

exchange rate will have an impact on profits. In spite

of this the company expects income from operations

before non-recurring items to exceed €15 million

(€19.8 in 2012).

Summary and Conclusion

Lectra is a nicely undervalued French CAD/CAM

company with good share price momentum.

Further Reading

Company Website Investor Relations Annual Reports Financial Times Summary

7 2 December 2013

Vol. 4 No. 12

Handy & Harman Limited – North America

Source: Reuters

Executive Summary Recommendation Buy

Recent Price (Closing price on 29.12.2013 NASDAQ)

$24.53

Stock Symbol HNH

Currency US Dollar

Market Cap $323.5 million

Company Location USA

Main Exchange NASDAQ

Shares outstanding 13.2 million

Average daily volume (last 10 days) 34 450

52 week range $13.71 to $25.19

Insider ownership 5.2%

Fiscal year end December

Suggested portfolio weighting 2%

Disclosure I have no position

Source: Financial Times, www.4-traders.com and company website

Description

Handy & Harman Ltd. (HNH) is a manufacturer of

engineered industrial products in the United States

and internationally.

The company serves a diverse customer base from

the construction, electronics, telecommunications,

home appliance, transportation, utility, medical,

semiconductor, aerospace, and aviation industries.

HNH reports its operations under the following

business segments: (Sales and operating income

shown for 2012)

Joining Materials (27.7% of sales and 30.5% of

operating income)

Tubing (15.4% of sales and 18.8% of operating

income)

Engineered Materials (35.4% of sales and 30.3%

of operating income)

Arlon Electronic Materials (Arlon) (12.8% of

sales and 14.7% of operating income) – Provides

high performance materials for the printed

circuit board (PCB) industry and silicone rubber-

based insulation materials.

Kasco Blades and Route Repair Services (Kasco)

(8.7% of sales and 5.7% of operating income) –

Provides meat-room blade products, repair

services and resale products for the meat

processing industry.

At the end of December 2012, HNH employed more

than 1,600 people at 33 locations in eight countries.

Valuation Metrics EBIT/Assets 25.6%

EBIT/EV 11.3%

Dividend Yield (TTM*) 0.0%

Price to Earnings (TTM*) 19.3

EV Free Cash Flow 12.3

Price to Book 6.2

Price to Sales 0.5

*TTM = Trailing 12 months

Source: Annual report, Financial Times, Reuters and company

website.

Recent results

For the nine months to September 2013 the company

reported a 10.9% increase in net sales to $502.9

million driven by a strong sales growth across all of its

business segments except Arlon.

Operating income amounted to $45.4 million up 6.3%

from the $42.7 generated during the previous year

period. And net income of $29.5 million up by 34.4%

from the $22.0 million achieved during the same

period in 2012. Earnings per share grew 31.4% to

$2.22 per share from $1.69 per share. The increase

was due to higher profits from three businesses sold

in 2013.

Outlook

Based on current results, the company expects full

year 2013 sales to be in the range of $637 million to

$667 million (2012: $629 million), and adjusted

EBITDA to be in the range of $76 million to $82

million (2012: $74 million).

Summary and Conclusion

HNH is an undervalued US engineering company with

good share price momentum.

Further Reading

Company Website

Investor relations

Annual Reports

Financial Times Summary

8 2 December 2013

Vol. 4 No. 12

Macro Enterprises Inc. – North America

Source: Reuters

Executive Summary Recommendation Buy

Recent Price (Closing price on 29.12.2013 TSXV)

CAD 6.69

Stock Symbol MCR

Currency Canadian Dollar

Market Cap CAD 199.3 million

Company Location Canada

Main Exchange Toronto

Shares outstanding 29.8 million

Average daily volume (last 10 days) 52 190

52 week range CAD 0.76 to CAD 7.35

Insider ownership 32%

Fiscal year end December

Suggested portfolio weighting 2%

Disclosure I have no position

Source: Financial Times, Euronext and company website,

Yahoo Finance

Description

Macro Enterprises Inc. (MCR) is a Canada-based

company that provides pipeline and facility

construction and maintenance services to oil and gas

companies in north eastern British Columbia and

north western Alberta.

The company involved in the construction, alteration,

repair, and installation of pipeline and facility pressure

piping and structural steel.

MCR operates through three operating divisions:

Macro Industries – Pipeline construction, facilities

construction and compressor stations;

Tracer Industries – Insulating, ductwork, and

metal frame building construction products and

services to the oil and gas installations, and

Omineca Oil Services – Facilities maintenance

services to the oil and gas installations located in

the northern British Columbia region

The company does not report operations separately

and publishes its financial results as one business

segment.

In November 2012, MCR completed the acquisition of

the pipeline construction and maintenance business

owned by North American Pipeline Inc. and North

American Fleet Company Ltd.

Valuation Metrics EBIT/Assets 40.2%

EBIT/EV 15.0%

Dividend Yield (TTM*) 0.0%

Price to Earnings (TTM*) 8.3

EV to Free Cash Flow 10.4

Price to Book 4.0

Price to Sales 1.1

*TTM = Trailing 12 months

Source: Annual report, Financial Times, Reuters and company

website.

Recent results

The company reported a 39.9% increase in sales to

CAD 97.4 million in the first six months of 2013

compared to CAD 69.6 million during the prior year

period. The increase was due to strong growth in sales

from six larger facility and pipeline projects as well as

maintenance and pipeline integrity work for three

other customers.

Pre-tax income increased 93.5% to CAD 20.7 million

from CAD 10.7 million during the period, benefited

from a decline in operating expenses due to improved

bid margins and a higher percentage of non fixed-price

work.

Net income increased 96.4% to CAD 15.4 million from

CAD 7.8 million, while basic earnings per share

increased 90.6% to $0.61 from $0.32.

Outlook

The company expects sales in the third quarter to be

higher than the previous year period, after taking into

account the expected sales from its November 2012

acquisition. The management is also encouraged by

the prospect of significant pipeline infrastructure

projects in British Columbia and Alberta.

Summary and Conclusion

MCR is an undervalued Canadian pipeline construction

and maintenance company with good share price

momentum.

Further Reading

Company Website

Investor relations

Annual Reports

Financial Times Summary

9 2 December 2013

Vol. 4 No. 12

Portfolio Update – Europe

Buy Recommendations (sorted by recommended date)

Investment Exchange ISIN Added Buy

Price Price Dividend Return Strategy

29.11.13

Linedata Services Paris FR0004156297 07.10.11 8.75 22.46 1.05 + 168.7 % ERP5 best Selection Europe, Magic Formula & F-Score 7

Reply Milan IT0001499679 08.11.11 16.08 52.60 1.07 + 233.8 % ERP5 best Selection Europe, Magic Formula & F-Score 7

Cegedim Paris FR0000053506 07.06.12 23.10 20.85 0.00 - 9.7 % Price Index 6 months sorted by ERP5

Impellam Group London GB00B2Q2M073 07.06.12 360.00 370.00 0.52 + 2.9 % Price Index 6 months sorted by MF

Viscom Xetra DE0007846867 02.07.12 7.75 12.27 0.60 + 66.1 % Price Index 6 months sorted by MF

Huntsworth London GB00B0CRWK29 07.08.12 44.00 69.00 4.50 + 67.0 % Price Index 6 months sorted by ERP5

Trinity Mirror London GB0009039941 09.10.12 63.50 180.00 0.00 + 183.5 % Price Index 6 months sorted by ERP5

Harvey Nash London GB0006573546 09.01.13 64.10 96.00 3.03 + 54.5 % Price Index 6 months sorted by ERP5 Rank

St Ives London GB0007689002 09.01.13 122.00 177.25 6.50 + 50.6 % Price Index 6 months sorted by Earnings Yield

Dart Group London GB00B1722W11 01.02.13 149.52 229.15 1.33 + 54.1 % Price Index 6 months sorted by Earnings Yield

U10 France FR0000079147 01.02.13 2.73 3.40 0.00 + 24.5 % Price Index 6 months sorted by ERP5

Corticeira Amorim

Portugal PTCOR0AE0006 28.02.13 2.07 2.30 0.10 + 15.9 % Price Index 6 months sorted by Earnings Yield

Axway Software France FR0011040500 28.03.13 14.72 23.60 0.35 + 62.7 % Price Index 6 months sorted by ERP5 Rank

Staffline Group London GB00B040L800 28.03.13 396.00 560.00 8.80 + 43.6 % Price Index 6 months sorted by ERP5 Rank

10 2 December 2013

Vol. 4 No. 12

Portfolio Update – Europe

Buy Recommendations (sorted by recommended date)

Investment Exchange ISIN Added Buy

Price Price Dividend Return Strategy

29.11.13

Advanced Digital Broadcast

Switzerland CH0021194664 30.04.13 15.00 14.85 0.00 - 1.0 % Price Index 6 months sorted by ERP5 Rank

Indesit Company Milan IT0000076197 30.04.13 5.97 9.18 0.20 + 57.0 % Price Index 6 months sorted by Earnings Yield

MGI Coutier France FR0000053027 30.05.13 46.00 95.00 0.50 + 107.6 % Price Index 6 months sorted by ERP5 & VC1

Montupet France FR0000037046 30.05.13 16.50 35.49 0.60 + 118.7 % Price Index 6 months sorted by VC1

Eniro Stockholm SE0000718017 28.06.13 18.45 37.25 0.00 + 101.9 % Price Index 6 months sorted by VC1

Fairpoint Group London GB0032360280 28.06.13 104.31 132.00 2.15 + 28.6 % Price Index 6 months sorted by EY

Kardex Switzerland CH0100837282 31.07.13 36.95 40.55 4.00 + 20.6 % Price Index 6 months sorted by EY

Societe Pour l'Informatique Industrielle SII SA (SII)

France FR0000074122 31.07.13 5.45 6.42 0.07 + 19.1 % Price Index 6 months sorted by ERP5

Burelle France FR0000061137 28.08.13 421.00 624.00 0.00 + 48.2 % Price Index 6 months sorted by VC1

Tesmec Milan IT0004585243 28.08.13 0.74 0.78 0.00 + 6.0 % Price Index 6 months sorted by EY

La Doria Milan IT0001055521 30.09.13 2.94 3.94 0.00 + 34.1 % Price Index 6 months sorted by VC1

Le Belier Paris FR0000072399 30.09.13 14.75 18.50 0.00 + 25.4 % Price Index 6 months sorted by VC1

Cegid Group Paris FR0000124703 31.10.13 21.49 23.00 0.00 + 7.0 % Price Index 6 months sorted by VC1

Norbert Dentressangle

Paris FR0000052870 31.10.13 83.50 88.00 0.00 + 5.4 % Price Index 6 months sorted by VC1

11 2 December 2013

Vol. 4 No. 12

Portfolio Update – Europe

Buy Recommendations (sorted by recommended date)

Investment Exchange ISIN Added Buy

Price Price Dividend Return Strategy

29.11.13

Interparfums SA Paris FR0004024222 29.11.13 31.47 31.47 0.00 + 0.0 % Price Index 6 months sorted by EY

Lectra SA Paris FR0000065484 29.11.13 7.37 7.37 0.00 + 0.0 % Price Index 6 months sorted by ERP5 Rank

Average Return

+ 53.2 %

Disclosure:

I have an investment in all of the Europe Recommended Buy companies except Cegedim, Impellam, Viscom,

Trinity Mirror, Harvey Nash, St. Ives, Dart Group, U10, Corticeira Amorim, Staffline Group, Advances Digital,

Indesit, Montupet, Fairpoint, Kardex, SII, Tesmec and Le Belier.

12 2 December 2013

Vol. 4 No. 12

Portfolio Update – Europe

Recommendations Sold (sorted by recommended date)

Investment ISIN Added Dividend Sold Return Strategy

Date Price per share Date Price %

Exact Holdings NL0000350361 10.07.10 18.15 2.02 08.07.11 21.17 + 27.8 % Magic Formula (5yr avg. EBIT) & Piotroski F-Score

Crown van Gelder NL0000345452 10.07.10 7.05 08.07.11 5.39 - 23.5 % Piotroski (low P/B with high F-Score)

DNX Corp (prev. DreamNex)

FR0010436584 10.08.10 28.50 2.17 09.08.11 16.16 - 35.7 % Magic Formula (1yr) & Piotroski F-Score

Highlight Communications

CH0006539198 10.08.10 3.85 0.17 09.08.11 3.65 - 0.8 % Magic Formula (1&5yr avg. EBIT) & Piotroski F-Score

Cegid Group FR0000124703 10.10.10 21.58 1.05 07.10.11 16.03 - 20.9 % Magic Formula Europe & 8 Piotroski F-Score

Gevelot FR0000033888 10.10.10 36.49 1.80 07.10.11 53.00 + 50.2 % Piotroski (low P/B of 29%with high F-Score of 9)

Full House Resorts US3596781092 10.11.10 3.69 08.11.11 2.87 - 22.2 % Magic Formula (1yr) & 8 Piotroski F-Score

MGI Coutier FR000 0053027 10.12.10 31.15 0.50 30.12.99 34.31 + 11.7 % Magic Formula & ERP5 (1yr) & 8.5 Piotroski F-Score

Tessi SA FR0004529147 10.01.11 62.87 2.00 09.01.12 70.39 + 15.1 % ERP5 best Selection & 8 Piotroski F-Score

GFI Informatique SA FR0004038099 10.02.11 3.42 0.22 09.02.12 2.81 - 11.4 % ERP5 best Selection & 7 Piotroski F-Score

Haynes Publishing GB0004160833 10.03.11 234.00 15.70 03.07.12 220.00 + 0.7 % ERP5 best Selection & 7 Piotroski F-Score

Securidev FR0000052839 10.03.11 26.89 1.50 03.07.12 35.99 + 39.4 % ERP5 best Selection & 8,5 Piotroski F-Score

Creston GB000 4440284 10.05.11 96.00 6.41 09.05.12 66.00 - 24.6 % ERP5 best Selection UK, Magic Formula & F-Score 7

Cello Group GB00B0310763 10.06.11 42.00 0.55 07.06.12 34.00 - 17.7 % ERP5 best Selection UK, Magic Formula & 8,0 F-Score 7

Buongiorno SpA IT0001488607 30.12.99 1.12 07.06.12 1.99 + 77.7 % Magic Formula (5yr avg. EBIT), ERP5BS & F-Score 8

Molins GB000 5991111 09.08.11 79.00 2.50 09.08.12 118.00 + 52.5 % ERP5 best Selection UK & 7.5 Piotroski F-Score

Trilogiq FR0010397901 09.08.11 14.15 09.08.12 14.52 + 2.6 % ERP5 best Selection Europe, Magic Formula & 7.5 F-Score

Advanced Inflight Alliance DE000 1262186 07.06.12 3.05 0.24 07.08.12 4.50 + 55.4 % Magic Formula (1yr) & 7 Piotroski F-Score

M&C Saatchi GB00B 01F7T14 10.09.10 106.00 4.90 07.08.12 151.50 + 47.5 % Magic Formula (5yr avg. EBIT) & 9 Piotroski F-Score

13 2 December 2013

Vol. 4 No. 12

Portfolio Update – Europe

Recommendations Sold (sorted by recommended date)

Investment ISIN Added Dividend Sold Return Strategy

Date Price per share Date Price %

Interior Services Group GB0002925955 08.09.11 176.50 15.06 07.08.12 121.00 - 22.9 % ERP5 best Selection UK & 7,5 Piotroski F-Score

Micropole FR0000077570 08.09.11 1.21 07.08.12 1.04 - 14.0 % ERP5 best Selection Europe, Magic Formula & F-Score 7.5

Logica GB0005227086 08.07.11 132.30 4.40 09.09.12 105.00 - 17.3 % ERP5 best Selection UK, Magic Formula & 8 F-Score

LaCie SA FR0000054314 10.02.11 3.59 0.33 09.10.12 4.50 + 34.5 % 6 month price index sorted by ERP5 & 5 Piotroski F-Score

Amadeus Fire DE0005093108 08.11.11 27.80 2.84 08.11.12 35.64 + 38.4 % Magic formula Europe, & F-Score 7.5

William Hill GB0031698896 10.12.10 167.00 18.80 06.12.12 345.40 + 118.1 % Magic Formula & ERP5 (1yr) & 8 Piotroski F-Score

freenet DE000A0Z2ZZ5 30.11.11 9.80 0.80 06.12.12 14.64 + 57.6 % ERP5 relative strength Europe, 7,5 F-Score

Groupe Crit FR0000036657 30.11.11 10.98 0.22 06.12.12 13.65 + 26.3 % ERP5 best Selection Europe, Magic Formula & 7 F-Score

Phoenix IT Group GB00B0315W65 09.01.12 155.00 7.00 09.01.13 175.37 + 17.7 % ERP5 Best selection UK, 7 Piotroski F-Score

Toupargel Groupe FR000039240 09.01.12 9.75 0.40 09.01.13 5.71 - 37.3 % ERP5 Best selection Europe, 7,5 Piotroski F-Score

Unibet Group SE0001835588 09.02.12 178.50 6.22 01.02.13 219.50 + 26.5 % ERP5 relative strength Europe 8,5 Piotroski F-Score.

Zetes Industries BE0003827442 09.02.12 15.56 0.55 01.02.13 15.69 + 4.4 % ERP5 Best Selection Europe 8 Piotroski F-Score.

Enterprise Inns GB00B1L8B624 03.07.12 53.25 28.02.13 105.90 + 98.9 % Price Index 6 months sorted by ERP5

Proffice SE0000470700 03.07.12 24.50 1.13 28.02.13 24.50 + 4.6 % Price Index 6 months sorted by ERP5

Osiatis FR0004044337 10.04.11 6.05 0.45 28.03.13 6.57 + 16.0 % ERP5 best Selection, Magic Formula & 7,0 F-Score

Roularta Media BE0003741551 10.04.11 24.58 0.64 28.03.13 13.43 - 42.8 % ERP5 best Selection, Magic Formula & F-Score 7

Cairo Communication IT0004329733 04.04.12 3.28 0.28 28.03.13 2.85 - 4.6 % Price Index 6 months sorted by MF

Know It SE0000421273 04.04.12 67.00 3.25 28.03.13 55.00 - 13.1 % Price Index 6 months sorted by MF

Inficon CH0011029946 10.05.11 192.00 30.00 30.04.13 289.00 + 66.1 % ERP5 best Selection Europe, Magic Formula & 7,0 F-Score

14 2 December 2013

Vol. 4 No. 12

Portfolio Update – Europe

Recommendations Sold (sorted by recommended date)

Investment ISIN Added Dividend Sold Return Strategy

Date Price per share Date Price %

Dragon Oil IE0000590798 09.05.12 6.86 0.19 30.04.13 7.38 + 10.4 % Price Index 6 months sorted by MF

SMT Scharf DE0005751986 09.05.12 21.30 0.98 30.04.13 23.89 + 16.8 % Price Index 6 months sorted by Earnings Yield

Koninklijke Brill NL0000442523 10.06.11 14.00 2.13 30.05.13 21.60 + 69.5 % ERP5 BS Europe, Magic Formula & 7,5 F-Score

Regenersis GB00B06GNN57 08.07.11 82.00 1.77 28.06.13 202.00 + 148.5 % ERP5 best Selection UK, Magic Formula & 7 Piotroski F-Score

Parrot FR0004038263 02.07.12 23.90 0.00 28.06.13 21.38 - 10.5 % Price Index 6 months sorted by ERP5

Tipp24 DE0007847147 07.08.12 36.50 0.00 31.07.13 43.15 + 18.2 % Price Index 6 months sorted by MF

Lookers GB00B17MMZ46 07.09.12 72.25 2.35 28.08.13 124.50 + 75.6 % Price Index 6 months sorted by EY

Xchanging GB00B1VK7X76 07.09.12 117.50 1.00 28.08.13 122.00 + 4.7 % Price Index 6 months sorted by ERP5

Etam Development FR0000035743 28.02.13 18.40 0.00 23.09.13 23.00 + 25.0 % Price Index 6 months sorted by Value Composite 1

Lectra FR0000065484 07.10.11 4.91 0.44 30.09.13 6.01 + 31.4 % ERP5 best Selection

Pandora DKK0060252690 09.10.12 85.40 5.50 30.09.13 227.70 + 173.1 % Price Index 6 months sorted by MF

ADLPartner FR0000062978 09.11.10 7.80 3.30 31.10.13 11.50 + 89.7 % Magic Formula (1yr) & 8 Piotroski F-Score

Chime Communications GB00B2QY9355 08.11.12 206.50 7.34 31.10.13 316.50 + 56.8 % Price Index 6 months sorted by ERP5

Cision SE0000291486 08.11.12 53.25 2.00 31.10.13 32.60 - 35.0 % Price Index 6 months sorted by ERP5 & MF

Creston GB0004440284 06.12.12 76.63 2.67 29.11.13 92.40 + 24.1 % Price Index 6 months sorted by ERP5

Picanol BE0003807246 06.12.12 19.57 0.00 29.11.13 24.65 + 26.0 % Price Index 6 months sorted by Earnings Yield

Average Return + 24.2 %

Source: Yahoo Finance and Financial Times

15 2 December 2013

Vol. 4 No. 12

Portfolio Update – North American

Buy Recommendations (sorted by recommended date)

Investment Exchange Stock

Symbol Added

Buy Price

Price Dividend Return Strategy

29.11.13

Salem Communications

NASDAQ SALM 03.04.12 5.01 8.99 0.26 + 84.6 % Price Index 6 months sorted by ERP5

Inteliquent NASDAQ IQNT 02.07.12 13.25 11.59 4.38 + 20.5 % Price Index 6 months sorted by ERP5

Northrop Grumman NYSE NOC 09.10.12 69.00 112.68 2.93 + 67.6 % Price Index 6 months sorted by ERP5 & MF

Gannett Company NYSE GCI 08.11.12 16.63 27.06 0.80 + 67.5 % Price Index 6 months sorted by EY & ERP5

Oshkosh NYSE OSK 08.11.12 28.18 48.75 0.15 + 73.5 % Price Index 6 months sorted by ERP5 & EY

GameStop NYSE GME 06.12.12 26.64 48.25 0.83 + 84.2 % Price Index 6 months sorted by ERP5 & EY

Harris NYSE HRS 06.12.12 48.03 64.51 1.58 + 37.6 % Price Index 6 months sorted by ERP5 & EY

Marathon Oil NYSE MRO 09.01.13 31.65 36.04 0.53 + 15.5 % Price Index 6 months sorted by Earnings Yield

Western Digital NASDAQ WDC 09.01.13 43.80 75.04 0.75 + 73.0 % Price Index 6 months sorted by Earnings Yield

Joy Global NYSE JOY 01.02.13 64.15 56.56 0.53 - 11.0 % Price Index 6 months sorted by Earnings Yield, ERP5, MF

TRW Automotive NASDAQ TRW 01.02.13 58.65 77.60 0.00 + 32.3 % Price Index 6 months sorted by Earnings Yield

Alliant Techsystems NYSE ATK 28.02.13 65.80 121.23 0.26 + 84.6 % Price Index 6 months sorted by ERP5, VC1, MF

Community Health Systems

NYSE CYH 28.02.13 42.26 41.25 0.00 - 2.4 % Price Index 6 months sorted by VC1

Crawford & Company NYSE CRD 28.03.13 5.30 7.80 0.11 + 49.2 % Price Index 6 months sorted by ERP5, EY, MF

Gray Television NYSE GTN 28.03.13 4.69 12.25 0.00 + 161.2 % Price Index 6 months sorted by ERP5, EY, MF

High Arctic Energy Services

Toronto HWO 30.04.13 2.31 3.65 0.09 + 61.8 % Price Index 6 months sorted by VC1

Safeway NYSE SWY 30.04.13 22.52 34.97 0.40 + 57.1 % Price Index 6 months sorted by VC1

Science Applications International

NYSE SAIC 30.05.13 31.63 36.85 0.28 + 17.4 % Price Index 6 months sorted by EY

16 2 December 2013

Vol. 4 No. 12

Portfolio Update – North American

Buy Recommendations (sorted by recommended date)

Investment Exchange Stock

Symbol Added

Buy Price

Price Dividend Return Strategy

29.11.13

Leidos Holdings NYSE LDOS 30.05.13 42.66 48.63 1.12 + 16.6 % Price Index 6 months sorted by EY

Trans World Entertainment

NASDAQ TWMC 30.05.13 4.59 4.35 0.00 - 5.2 % Price Index 6 months sorted by VC1

Ark Resturants NASDAQ ARKR 28.06.13 21.15 21.50 0.00 + 1.7 % Price Index 6 months sorted by VC1

SL Industries NYSE SLI 28.06.13 25.08 30.50 0.00 + 21.6 % Price Index 6 months sorted by EY

VSE Corporation Nasdaq VSEC 31.07.13 43.28 51.22 0.09 + 18.6 % Price Index 6 months sorted by VC1

WellPoint NYSE WLP 31.07.13 85.56 92.88 0.38 + 9.0 % Price Index 6 months sorted by VC1

Exelis NYSE XLS 28.08.13 14.78 17.67 0.10 + 20.3 % Price Index 6 months sorted by EY

Seagate Technology NASDAQ STX 28.08.13 38.51 49.04 0.43 + 28.5 % Price Index 6 months sorted by VC1

ITT Educational Services

NYSE ESI 30.09.13 31.00 38.99 0.00 + 25.8 % Price Index 6 months sorted by EY

Sanmina Corporation NASDAQ SANM 30.09.13 17.49 15.48 0.00 - 11.5 % Price Index 6 months sorted by VC1

Stone Energy Corp NYSE SGY 31.10.13 34.86 33.08 0.00 - 5.1 % Price Index 6 months sorted by VC1

Tenneco NYSE TEN 31.10.13 53.07 57.40 0.00 + 8.2 % Price Index 6 months sorted by EY

Handy & Harman NASDAQ HNH 29.11.13 24.53 24.53 0.00 + 0.0 % Price Index 6 months sorted by VC1

Macro Enterprises Toronto MCR 29.11.13 6.69 6.69 0.00 + 0.0 % Price Index 6 months sorted by EY

Average Return + 34.5 %

Source: Yahoo Finance and Financial Times

Disclosure:

I do not have an investment in any of the North American Buy Recommendations.

17 2 December 2013

Vol. 4 No. 12

Portfolio Update – North American

Recommendations Sold (sorted by recommended date)

Investment Symbol Added Dividend Sold Return Strategy

Date Price per share Date Price %

Comtech Telecommunications

CMTL 07.10.11 30.99 1.10 09.10.12 27.35 - 8.2 % ERP5 BS North America, Magic Formula & 7 F-Score

Gamestop Corp GME 07.10.11 24.33 0.55 09.10.12 23.99 + 0.9 % ERP5 BS North America, Magic Formula, RS & 7,5 F-Score

L-3 Communications LLL 08.11.11 70.97 1.50 08.11.12 73.73 + 6.0 % ERP5 BS North America, Magic Formula, RS & 7,5 F-Score

NASDAQ OMX Group NDAQ 08.11.11 26.00 0.13 08.11.12 23.56 - 8.9 % ERP5 BS North America, RS & 7 F-Score

Black Box BBOX 30.11.11 28.53 0.30 06.12.12 25.02 - 11.3 % ERP5 BS North America & 7 F-Score

Glacier Media GVC 30.11.11 1.95 0.09 06.12.12 1.76 - 5.1 % ERP5 BS North America & 7 F-Score

Ceradyne CDY 09.02.12 33.74 0.45 06.12.12 35.00 + 5.1 % ERP5 BS North American & 8 F-Score

DeVry Inc. DV 09.01.12 41.30 0.15 09.01.13 24.00 - 41.5 % ERP5 BS North America & 8 F-Score

L.B. Foster Co. FSTR 09.01.12 28.67 0.09 09.01.13 44.13 + 54.2 % ERP5 BS North America & 7 F-Score

Softchoice SO 09.02.12 12.40 0.14 01.02.13 12.43 + 1.4 % 6 month price index sorted by ERP5 & 6 F-Score

Meredith MDP 03.07.12 32.34 1.56 28.02.13 42.02 + 34.8 % Price Index 6 months sorted by ERP5

Rent-A-Center RCII 03.07.12 33.55 0.69 28.02.13 36.28 + 10.2 % Price Index 6 months sorted by ERP5

Almost Family AFAM 03.04.12 24.87 2.00 28.03.13 20.43 - 9.8 % Price Index 6 months sorted by ERP5

Navigant Consulting NCI 09.05.12 12.81 0.00 30.04.13 12.33 - 3.7 % Price Index 6 months sorted by ERP5

VAALCO Energy EGY 09.05.12 8.13 0.00 30.04.13 6.72 - 17.3 % Price Index 6 months sorted by ERP5

G-III Apparel Group GIII 07.06.12 25.13 0.00 30.05.13 41.86 + 66.6 % Price Index 6 months sorted by ERP5

Veeco Instruments VECO 07.06.12 33.52 0.00 30.05.13 42.60 + 27.1 % Price Index 6 months sorted by ERP5 & MF

Littelfuse LFUS 02.07.12 56.73 0.80 28.06.13 74.61 + 32.9 % Price Index 6 months sorted by MF

18 2 December 2013

Vol. 4 No. 12

Portfolio Update – North American

Recommendations Sold (sorted by recommended date)

Investment Symbol Added Dividend Sold Return Strategy

Date Price per share Date Price %

Daily Journal DJCO 07.08.13 98.00 0.00 31.07.13 133.60 + 36.3 % Price Index 6 months sorted by MF

HollyFrontier HFC 07.08.13 39.42 3.45 31.07.13 45.55 + 24.3 % Price Index 6 months sorted by EY

Dorel Industries DII.B 07.09.12 33.95 1.23 28.08.13 35.70 + 8.8 % Price Index 6 months sorted by ERP5

RPC Inc. RES 07.09.12 12.71 0.58 28.08.13 14.50 + 18.6 % Price Index 6 months sorted by MF

CF Industries Holdings CF 09.10.12 218.17 1.60 30.09.13 210.83 - 2.6 % Price Index 6 months sorted by ERP5

Average Return + 9.5 %

Source: Yahoo Finance and Financial Times

Notes:

The Quant Value portfolio is an equally-weighted strategy and does not include dealing charges to purchase or sell securities, if any. Taxes

are not included in total return calculations. “Return” includes gains from price appreciation, dividend payments, interest payments, and

stock splits. For securities not quoted in Euro the total return is shown in the currency the security is quoted in. Sources for price data:

Yahoo! Finance (finance.yahoo.com), Financial Times (www.ft.com), and company websites.

The Quant Value investment newsletter is published by Serendipity Ventures (UG) haftungsbeschränkt a limited

liability company incorporated in Germany. The company’s address is Von-Eicken-Str. 13a, 22529, Hamburg,

Germany. Telephone: +49 40 2261 1607, Email: [email protected]

19 2 December 2013

Vol. 4 No. 12

Disclaimer

General Note

This newsletter and its content are provided to you

for informational purposes only and any discussion of

past performance of any security, other investment or

investment strategy should not be considered as being

indicative or a guarantee of future performance.

It does not constitute personalised financial advice nor

an endorsement or solicitation to make any

investment.

Please do your own due diligence or hire a financial

advisor before making any investment decisions. It’s

your money and your responsibility.

The information herein is not intended to be personal

legal or investment advice and may not be

appropriate or applicable for all readers. If personal

advice is needed, the services of a qualified legal,

investment or tax professional should be sought.

The price and value of securities referred to in this

newsletter will fluctuate. Loss of all of the original

capital invested in a securities discussed in this

newsletter may occur.

Certain transactions, including those involving futures,

options, and other derivatives, give rise to substantial

risk and are not suitable for all investors.

You acknowledge that you understand that, due to

many factors over which neither we, actual and

subsequent events, performances and/or outcomes

may differ substantially from any estimates,

projections or predictions that might have been made

in this newsletter.

This research is, to the best of our knowledge, based

on generally accessible sources which are reliable and

accurate. However, no liability can be accepted for any

errors or inaccuracies in information derived from

these sources. The information in this publication has

not been checked for accuracies or relevance to

current events. Consequently, no liability can be

assumed for the completeness and accuracy of this

report.

Serendipity Ventures (UG) haftungsbeschränkt has a

subscription and advertising based revenue model and

it or the analyst will not receive any compensation for

providing specific information, data, opinions,

estimates and projections as well as recommendations

in this report.

The author received no compensation and is not

affiliated with the company reviewed in this report

with the possible exception of being a shareholder.

Company Specific Disclosures

This publication constitutes research of a non-binding

nature on the market situation and the investment

instruments cited here at the time of this publication

on 29.11.2013.

Indicated time horizon of investment

recommendation is 12 months.