Dear Fellow Investor
I just sent out this month’s issue of the Quant Value newsletter with 4 undervalued investment ideas.
This month I update you on the first quarter 2017 performance of the newsletter.
Tiger Legatus Master Fund was up 0.1% net for the second quarter, compared to the MSCI World Index's 7.9% return and the S&P 500's 8.5% gain. For the first half of the year, Tiger Legatus is up 9%, while the MSCI World Index has gained 13.3%, and the S&P has returned 15.3%. Q2 2021 hedge Read More
- Europe is the same as the market with nearly 50% of the portfolio in cash
- North America is slightly below the market with 75% in cash
- Asia is also slightly below the market with 68% in cash
Happy to hold a LOT of cash
As you can see all the portfolios have done well if you consider the high amounts of cash.
I am more than happy to be holding cash if you think of the extremely over-valued US stock market at the moment.
As you know when the US market crashes it drags all markets down along with it – irrespective of how undervalued the market may be.
Here are the ideas…
This month – 4 interesting ideas for undervalued companies to buy
In Europe, I am recommending a French manufacturer of motor vehicle parts (PE 13.6, DY = 2%, P / FCF = 9.3, EBIT / EV = 15%, EV / FCF = 9.8). Its PE may be a bit high but it is very undervalued based on EBIT to EV and on both FCF ratios!
In North America, I am recommending a Canadian paper pulp company (PE 14, DY = 2.1%, P / FCF = 9.4, EBIT / EV = 11.8%, EV / FCF = 9.4), not dirt cheap but nicely undervalued.
In Asia, I am recommending two dirt cheap Japanese companies. The first company developments and manufactures automatic machines and electronic equipment and is VERY undervalued on all ratios (PE 8.2, DY = 1.3%, P / FCF = 3.7, EBIT / EV = 30.8%, EV / FCF = 2.4).
The second company manufactures and sells automobile and automotive parts and is just as undervalued (PE 6.6, DY = 2.0%, P / FCF = 6.6, EBIT / EV = 28.5%, EV / FCF = 7.5. After selling the company in February this year (for a profit of 16.2%) I am recommending this company again after it appeared in the newsletter’s investment model due to very good third quarter results.
Portfolio changes this month.
Europe – Sell two
Sell Ipsos SA (+46.5%) and Kvaerner ASA (+57.9%),recommended a year ago, as both are not in the newsletter’s investment model any more.
North America – No change
No changes to the North American portfolio this month.
Asia – Sell one
Sell Daiwa Industries Ltd. (+28.5%) as the company is no longer in the newsletter’s investment model.
Stop-loss portfolio changes – Sell – one
Hennessy Advisors Inc. -20.8%
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Wishing you profitable investing
Tim du Toit
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Article by Quant Investing