Overview of my performance

After 2 years of soiling people's email inboxes

Well almost 2 years. First post was in early November 2020 somewhere. I keep track of all the stocks I have mentioned that I have bought. I did not count my dividends in price peak return. As I was too lazy for that. So in total about 35-40% outperformance in the past 2 years. With a healthy mix of energy stocks to thank for that.

These are the stocks that got a dedicated write-up:

If you click on the image, it becomes larger. Shell Midstream workout I actually played with long dated options. $12 December 2022 calls could have been bought at between $2-2.5 a piece throughout this year. So that would actually lift the average return 4% higher.

And these are the stocks that got a brief mention (some overlap with full write-up list):

If I made mistakes with the calculation or did not mention stocks, it was not on purpose. I did not factor in currency movements. But then I also could have picked a far worse performing index. The Hang Seng is 45% of its 2 year highs and Euro indices are about 30% of its highs vs ~20% for SPY.

And I did not count stocks in my most recent post, because it is less than 1 month old.

Some of the mistakes in there were preventable. And some of the worst performers, SBSAA and TRCK were also very illiquid. I think AVYA was just a dumb preventable mistake. TRCK was part bad luck, part a mistake.

SBSAA I should have sold entirely at $5, instead of just selling a portion. Last year, when Q3 somewhat disappointed, I had the urge to sell a lot more. But since I had just written it up, I didn’t do it because I publicly committed myself to it. Which is one of the reasons I am off Twitter now. Cheerleading a stock on there just makes me too biased.

Notable that the 9 stocks written up so far this year have returned 5% vs -10% for the S&P 500. And even worse performance for European and Hong Kong indices. Nice to know that I can do ok in a bear market.

Also investing heavily into energy stocks turned out to have been a good move. Going forward I am not sure that will give the same performance. So I am mostly out of Energy now. Asian stocks, Covid reopeners and Europe is where the bargains lie now IMO. I want to go more heavily in emerging markets.

Although my sample size so far isn’t that great. And all of this could have been luck, so don’t take this as some sort of guarantee for future performance!

As for the stocks that I am currently long from largest to smallest:

• Currency Exchange (CURN, CXI) is my largest position now. Still think this is very cheap, large net cash position and multiple ways to grow. Trading ~6-8x 2023 FCF with no debt. And I think growth could surprise on the upside here. Also a nice inflation hedge, as revenue automatically tracks inflation (due to higher spending of customers). I was dumb enough to sell this at $11 earlier this year and had to buy it back at $12. I should trade less.

• Vontier (VNT) I think cyclical fears are overblown. More details here.

• Westrock (WRK) Written up here by me. GPK just had a good quarter, and I think Westrock will probably steam through 2023 as well? I added on the way down.

• Toya (TOA) Written up here by me. Still bagholding this one. I think I will have to be patient. Hopefully it will start to pay some dividends again soon. I feel ok about this long term.

• Tyman PLC (TYMN) This one is new. Entered this one at 185p. 2/3 of revenue and profit is actually in the US. The USD is actually 13% higher vs the GBP since H1, but the stock has cratered since then. PE ratio is ~6x. Returns 30% on invested tangible capital. Buffett owns one of their competitors. I think earnings will dip a bit next year, but nowhere near as much as the market is pricing in. Probably not below 60m GBP. Meanwhile you get a 7%+ dividend while you wait. VIC write-up here.

• Sitio Royalties (formerly Falcon minerals) (STR) Still in this one. It has been a nice trading stock in the past year. This stock has transformed in one of the largest Permian mineral royalties in the US. Will generate ~$4 in FCF next year on a $28 share price if oil prices stay where they are. While, due to being a royalty trust, has significantly less downside risk to commodity pricing than a producer. And producer cost inflation will actually benefit them, since they get a % of revenue! Higher costs mean a higher marginal cost of production. Which means more revenue. Which means more royalties.

• TIM S.A. (TIM) There is a US traded stock with same ticker, but not same company. I got the Polish one, so careful to not confuse them. Mentioned it in more detail here. And if you want more details, a really good in depth write-up here by Olivier Marz and here by Carsten Mueller.

• Haier Smart Home (690D) Back in at €‎1.13, but it seems I was too early. Currently the German listing, despite having the same voting power and economic interest as the Chinese shares, trades at a 66% discount to Hong Kong traded shares. To give an idea how cheap this is, net cash is about 50% of the market cap, PE multiple is 4-4.5x and dividend yield is 10%. If the discount ever gets closed, you get instant 200% upside. And this is a major international Blue chip, not some small cap shitco!

• Metrovacesa (MVC) Spanish real estate liquidation. Mentioned here. Just announced a €‎1/share dividend.

• First Pacific (HKG:0142) Bought some after the Hu Jintao incident. Great in depth write-up again by Olivier Marz here. It trades on Hang Seng but all its business is in South East Asia. 3x PE, 10% dividend yield, buys back 1-2% of its shares every year. Basically foodstuff, telecommunications and toll roads. SE Asia is doing better when it comes to inflation. Phillipines only has 6% inflation so far. Better than the US and Europe. Reason it is cheap: read Asian Godfathers and you will understand.

• Berry Global (BERY) Non cyclical plastic packaging, trading <6x PE, write-up here by me. Discount to Amcor has widened.

• Lastminute (LMN) Bagholding this stock. Trades at 5-7x earnings, with a rock solid balance sheet. Catalyst will be a continuation of H1 results, a possible buy-out by Booking (although I am skeptical) and resolving the Covid scandal.

• Garrett Motion Preferred (GTXAP) Somewhat similar story as Vontier. A duopoly in ICE vehicle parts. In depth VIC write-up here. Will probably earn ~$300-350m in 2023-2024. $1bn net debt. Fully diluted share count 310m. At conversion Pref holders will get a $0.7/share dividend + current $0.68 annual dividend. Conversion will be somewhere 2023-2024. Which means $1.4-2 in near guaranteed dividends in next 2 years. So effectively paying 5-6x PE here. Will benefit from resolving chip shortages as all large automakers are forecast to see increasing revenues in 2023 and beyond.

• Dillistone (DSG) I do NOT recommend anyone buying it! Average trading volume of 400gbp per day. I am a bagholder in this stock. Cannot sell it since my position is too large. Probably some day it will recover? At least fundamentals seem to be somewhat inflecting as of last report?

• Spanish Broadcasting (SBSAA) I did end up selling some after dissapointing results. Will probably do ok in long run, but has now shrunk to a small position. Those new radio stations seem to be doing well.

• Track Group (TRCK) Also bagholding this stock. Wrote it up here. I have some hopes it will recover at some point if that Chile contract goes through.

• Basket of special situation type stocks. Hollysys and Magnachip (back in at $10) and some other stocks I rather not mention here.

Stocks that I sold recently are Extreme Networks, I don’t think it is as cheap anymore at ~$16 and a 15x 2023 PE. And Greif, also not as cheap anymore. Greif B shares historically traded at about 10x PE, and if EPS come in at $9.5-10 next year, that is a 7-8x PE stock. Due to higher rates, it can probably fetch 8-9x at best. And I sold Black Stone minerals at $18. A 10-12% yield now at best. Still cheapish but I traded them in for Tyman, Berry Global and Best Pacific instead.

Also sold Petrobras as it ran up. But considering going back in. Kind of surprised it sold of so much on news that Lula will likely win. I thought that was fairly obvious now? For now on sidelines though. This won’t go above $16-17 unless there is more certainty that Lula won’t screw shareholders.

Some other stocks I am considering are Chinese clothing/textile stocks, but I will do a separate post on that soon, probably. This is getting a bit long, so I will wrap it up here.

There will likely be less activitiy on specific stock write-ups in the coming 12 months. I want to really get better at programming now. Another reason why I deleted Twitter. I am learning Rust, and my goals are to do at least the last 2 years of Advent of Code challenges and create variations of Snake, Tetris and Pacman as practice projects. That was actually a goal I had set for myself at the start of the year.

I am also writing some more philosophical posts about how to cope with EMH as a value investor. They are half done.

As usual, I may sell at anytime, and do your own work. And past performance mentioned here is no guarantee for future performance.