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.
A decade ago, no one talked about tail risk hedge funds, which were a minuscule niche of the market. However, today many large investors, including pension funds and other institutions, have mandates that require the inclusion of tail risk protection. In a recent interview with ValueWalk, Kris Sidial of tail risk fund Ambrus Group, a 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%
To get your personal copy of the newsletter simple click here: Quant Value join now
Wishing you profitable investing
Tim du Toit
PS Why not sign up while the ideas are still fresh, it costs less than an inexpensive lunch for two, simply click here: Quant Value join now
Article by Quant Investing