The Olesen Value Fund earned 0.4% net in Oct. vs. 1.2% for the MSCI All-Country World Index and 2.4% for the S&P 500.
Olesen Value Fund sells Havas
We sold our investment in Havas SA (EPA:HAV) (OTCMKTS:HAVSF), a French company that owns a global network of advertising, media buying/ planning, PR, and similar agencies. We first bought the stock at €2.82 in Aug 2011 and sold at €6.31.
Mangrove Partners Narrowly Avoids “Extinction-Level Event”
Our original purchase price was approx. 10x adj. trailing earnings. The business has very low net capital requirements, which means it can grow without consuming much free cash flow – a highly valuable characteristic. In addition, the company was in the middle of an already very successful multi-year margin expansion following the replacement of senior management a few years earlier, which I expected would result in significant further margin increases. As expected, both earnings and the P/E ratio increased, which led to a very good return on our investment.
During October, we continued accumulating shares in three illiquid securities, all of which I think are significantly undervalued. We suffered a minor set-back recently when the stock price of OnMobile Global Limited (NSE:ONMOBILE) (BOM:532944), a technology company listed in India, rose sharply before we could obtain the necessary trading capability to buy the stock. Also, after the end of the month, we started buying shares in a small/mid-sized European company, which I expect will take a little over a month. The company trades at approx. 9x adj. trailing earnings, has a good balance sheet, and we think earnings may increase substantially.
Olesen Value Fund: Investment Philosophy
- Seek to generate substantial capital appreciation over the long term, with minimal risk of loss
- Define risk as permanent loss of capital; tend to view volatility as opportunity, not necessarily a risk
- Value investing philosophy, using a bottom-up approach
- No leverage
Olesen Value Fund: Fund Manager
- The fund has $28 mil. in assets and is managed by Christian Olesen
- Virtually 100% of my net worth, except for my cash reserves, is invested in the fund
- Previously worked as analyst/trader for Xaraf Management, a group within Paloma Partners, a Greenwich, CT-based hedge fund with approx. $2 billion in AUM
- Graduated from Wharton (Finance, Accounting) and holds the CFA designation