Update #7
And closing a few ideas
First closing a few ideas that were lingering on and no longer look interesting.
Anexo (ANX) posted disappointing results a couple months ago. I think the business is too mediocre. Current valuation is 6x earnings, but again little to no free cash flow while earnings in their core business did not grow. I sold all my shares and will close the idea here. Usually if a stock doesn’t rerate after 2 years, it is time to move on.
I am closing Toya (TOA) as well. A big jump in inventory in the latest quarter. I sold this one a while ago. Toya has been active since 2021 and I made money on it by doubling down at 4-5 zloty (now at nearly 8 zloty), but overall it has been disappointing and it has underperformed by quite a bit. Without hindsight knowledge with my current filter I don’t think I would have invested in this stock.
Toya currently trades at ~8x earnings, but poor liquidity and a lack of growth, FCF and dividends kind of make this a value trap.
Enzo Biochem (ENZ) has not played out as I expected. Revenue was down 16% in Q4 and they announced a small dividend instead of a tender offer. So I sold out and will close it here as well. Upside is just not enough for me (especially if this becomes a cash shell vs a liquidation after selling their business). Cash shells often rightfully trade at a discount. So upside is not that attractive here factoring in cash burn.
Genomma lab (LABB) did work out well, the stock doubled from where I mentioned I would double down at the start of the year. Although the Mexican peso did decline 15% this year. It now trades at about 10-11x 2025E and ~9x 2026E earnings, so not as interesting here anymore. I sold out but will not close it yet. I do think I was a bit early all the way back in 2023, but overall it seems my thesis has played out.
By the looks of it, growth will be above average in the next couple of years. So if you are looking for some cheapish Latin America exposure it is an ok hold here still. I would say this is an above average and fairly recession proof business.
I still happily hold Haier Smart home (690D) here. The stock trades at 5.8x 2025E earnings and a nearly 9% yield after 10% withholding taxes and including a ~1% annual buyback. With a lot of potential to increase dividend payout given their large net cash position.
I don’t think they will be affected much by a trade war as most of their US sold products are actually made in the US. If you like the stock you might like this documentary about the company. I think this is a very well run company that despite its size will enjoy above average growth for some time to come.
Chinese stocks overall I did a bit of trading but still heavily in Chinese stocks. I think over the next 6 months there will be a large stimulus package announced and Trump will not be successful in significantly damaging the Chinese economy as trade barriers can be avoided in various ways (just like sanctions). I think cheap Chinese stocks that are exposed to consumer spending like DADA, RERE, GHG, 690D, JD will benefit especially well. With travel being near the top. I did add to my GHG position.
Then some updates on my paywalled write-ups…