quant value 2013 12 mfie
TRANSCRIPT
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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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).
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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.
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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
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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.