A net margin of 39.25 makes any crocodile happy to strike.
CUVClinuvelAU000000CUV3CUVCUV
$CUV (+0,17%)
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#portfoliofeedback
what do you think of this share? get in early and then go high? or hands off?
Hello dear GQ community,
I saw a great post the other day that this post ties into. (https://getqu.in/DPSDrc/). The post is about the actual country distribution in the depot, because as the author correctly described, an American company is not the same as the American market - Maybe the company generates most of its revenue in emerging markets and has the headquarters in the US only to be legally safe, and because of low taxation. You can read the rest in the original post.
My Single Stock Portfolio (Not yet complete, some stocks are still on the WL) consists of:
- Microsoft $MSFT (+1,09%)
- UnitedHealth $UNH (-1,21%)
- Clinuvel $CUV (+0,17%)
- German Post $DPW (-1,71%)
- UPS $UPS (-1,9%)
Now let's look at the distribution of sales in relation to the world:
- Microsoft (USA: 50% / Other Countries: 50%)
- UnitedHealth (USA: 97% / Other Countries: 3%)
- Clinuvel (Europe: 50% / USA: 40% / Switzerland: 10%)
- German Post (Europe: 29% / USA: 21% / Germany: 26% / Asia: 23%)
- UPS (USA: 76% / Europe: 12% / Other Countries: 12%)
Combined:
- 1st place: USA with 56.8%
- 2nd place: Europe with 18.2%
- 3rd place: Other countries with 13
- Place 4: Rest: 12%
You can see that the USA makes up the largest part of my investments. The USA is the largest economy on this planet with China and has a gigantic economy. But besides this flourishing economy, the country accumulates schools every year, which also have to be serviced at some point.
Conclusion: I will invest more in other markets: India and China are almost not represented in my portfolio - In this regard, I will certainly give an update.
Investment philosophy, "diversification" and dividends
Hi all, as this is my first slightly larger post I would generally appreciate some constructive feedback.
First something About Me
I'll be 22 in a month and I've been active in the stock market for about 2 years now. After a lot of back and forth, I can almost say that I have tried every strategy - but I never really felt comfortable. One learns from mistakes, and I have made many of them.
But what I have also done is to spend countless hours, days and weeks with books, videos, shareholder letters and internet research. I was particularly fascinated by the investment approaches of Terry Smith and the way of Joseph Carlson on Youtube.
My goal quickly became clear, I don't want to have thousands of companies in my portfolio that I don't know, understand or fully support. So an ETF focus was off the table.
Thereupon I built my own investment philosophy, which I would like to present to you in the following.
If you want to know more about me and my goals, there might be another article with a portfolio presentation soon :-)
First I would like to explain to you why I do not believe in diversification hold:
A quote from Warren Buffet is well known: "Diversification is protection against ignorance. It makes little sense if you know what you are doing."
However, a quote from one of the world's best investors alone is unlikely to convince everyone. Studies also support Buffet's view. The advantages of diversification decrease very fast and the gap between market risk and total portfolio becomes minimal from a portfolio size of 20-25 companies - 25 companies give you all the advantages of diversification, more positions only worsen your performance and overview. (Figure 1)
Because concentration delivers better performance. Fund managers who concentrate their knowledge in a few companies deliver better results than more diversified managers. (Figure 2)
Investment philosophy
I want to outperform the market, so I look for the best companies. What makes good companies?
Companies with competitive advantages (moats) outperform the market (Figure 3), and they do so because they have high returns on capital. My first metric for evaluating quality of a company and with a high value in my company analysis is ROIC (Return on Capital Invested). I look for companies with at least 10% ROIC. (Figure 4) Furthermore I want high ROCE (Return on capital employed) and high ROA (Return on Assets) figures.
This directly eliminates some companies and also whole sectors, namely exactly those in which it is not worth to invest anyway. Why is this so?
There are sectors that historically outperform the market (Software, Consumer, Healthcare) - on which my focus is -, and sectors that consistently underperform and are not considered in my investment approach (Banking, Energy, Insurance, Mining, Utilities, Airlines) - just compare the sectors with the main index ;-)
Consumer goods, healthcare and software companies perform better because they generate sustained profits, so they remain profitable even during economic downturns. This allows for consistently high returns on capital.
Next, a look at the margin here I would like to see high Gross Margins >60%, which are also a good indicator of a competitive advantage, and a high Profit Margin, which is an indicator of the efficiency of a company's value creation. However, the most important margin for assessing profitability is the FCF margin.
A company's focus should be maximally on Free Cash Flow, we should invest in companies that are as profitable as possible. In the long run, the share price follows the Fcf/Share.
Beyond that I don't want any debt, any company with Debt/EBITDA > 3 flies right out, preferably anything less than 2.
In terms of growth, I look for stable and good EPS and revenue growth, but FCF growth has the highest priority.
The higher the better, the more important the key performance indicators are.
My minimum benchmarks for the most important metrics:
- ROIC > 15%, ROCE > 15-0%
- Gross Margin > 60%
- Profit Margin > 20%
- FCF Margin > 20%
- Debt / EBITDA < 3, preferably < 1
- FCF 5Y CAGR > 10-15%
(Not all of my companies always meet every metric, but I have built my own score where a minimum score must be met and by score I set the "Conviction" to a company).
Buy & Hold and long-term investing outperforms
As long as a company continues to reinvest its capital at high returns there is no reason to sell. (Figure 5)
What about dividends?
Some of my companies pay a dividend, others don't - I don't put much emphasis on dividends, and will definitely not put bad companies in my portfolio just to get a payout in a given month ;) Dividends should be minimized if capital can be reinvested at high rates of return. At my young age and with a long term investment horizon the focus should be on yield, in old age I will also shift to dividends ;)
The most important thing to conclude: Invest in profitable companies that you UNDERSTAND
A few final tips:
- Don't chase trends, they fade away
- Do not be blinded by dividends
- Don't care about macroeconomics, invest in companies - not cycles
- Market timing is impossible
- Look for established companies, not one-hit wonders
- BUY GOOD COMPANIES - DON'T OVERPAY - DO NOTHING (Terry Smith)
My current investable universe:
$ADBE (+2,84%)
$NVO (+1,68%)
$CUV (+0,17%)
$CDNS (+3,48%)
$ASML (+4,37%)
$VRTX (+0,36%)
$V (-1,68%)
$MA (-0,63%)
$MSFT (+1,09%)
$QLYS (-0,27%)
$MKTX (-0,58%)
$KLAC (+4,58%)
$GOOGL (+0,99%)
$REG1V (+1,41%)
$TNE (+2,47%)
$ENX (-0,1%)
$EW (-0,23%)
$VRSN (+1,36%)
$FICO (+1,71%)
$FTNT (+0,33%)
$NEM (+2,9%)
$MONC (+1,47%)
$CSU (+3,2%)
$6861 (+2,94%)
$ENGH (+0,49%)
$MC (+2,48%)
$AAPL (+2,87%)
$6857 (+3,42%)
$7741 (+0,54%)
$PAYX (+0,12%)
$MTD (+2,46%)
$TXN (+3,02%)
$OR (+3,35%)
$ZTS (-2,04%) (Companies I watch, in my portfolio I have only 8 of them).
That's it from me for now. Please leave me some feedback and share the post if you like it :-)
What would you like to hear from me next? More about free cash flow? Portfolio presentation? Company presentation? My slightly different valuation approach, far away from P/E?
Some of the illustrations are from a slightly smaller fund ("Long Equity Investing" on Twitter - can only recommend you) or from Terry Smith's Shareholder Letter.
No investment advice
+ 1
++News at Clinuvel: Why 30% return in one month?!++ $CUV (+0,17%)
Servus dear GQ-Community, from my side came no longer longer posts, because the Abitur is slowly approaching...
Those who follow my posts regularly know that I am a shareholder of Clinuvel Pharmaceutical, and have already written a share presentation about the Australian smallcap. Authored. Here it is again for your perusal:
https://app.getquin.com/activity/aHswuVFNaJ?lang=de&utm_source=sharing
https://app.getquin.com/activity/aHswuVFNaJ?lang=de&utm_source=sharing
I was asked if I could write an update on the position, as quite a bit has happened around the stock. Below are two factors that have had a possible effect on the price of the stock:
Insider selling at Clinuvel:
As written earlier, Clinuvel is a small cap. When investing in such a "small" company, what matters most to me, besides the balance sheet, is the management. If the management holds large stakes in the company in addition to a good balance sheet, I am interested.
From the point where the management sells the shares in large volumes, one should be vigilant with small companies, because no one knows the company as well as the bosses. But you can't let bad news destroy your investment case, because you never know all the information. So that you are all informed, I will now give you an overview:
Shareholder structure: (If the table is not displayed, please check the charts)
Chairman
70
2019
Independent Non-Executive Director
-
2007
Independent Non-Executive Director
-
2018
Chief Executive Officer, MD & Director
59
2005
Vice Chairman
-
-
Non-Executive Director
-
2019
Non-Executive Director
79
2022
Those involved in insider transactions in the last 24 months were: Brenda Shanahan, Jeffrey Rosenfeld and Philippe Wolgen.
Transaction totals are as follows:
Insider sales: Jeffrey Rosenfeld (A$20,730.12) and Philippe Wolgen (A$16,143.00). Total 5,161,659.65 shares
Insider buying: Brenda Shanahan (A$628,250.00) and Philippe Wolgen (A$4,259,344.65). Total: 198,306 shares
Why the insiders sold shares, only they know. As an outsider, I would not like to speculate. What is unmistakable is the high amount of sales compared to purchases. My approach: I will follow the transactions closely and then weigh them. If more insiders sell large amounts of shares, I may sell part of my position at a good profit.
Agreement on drug distribution with health insurers:
2022 has already been written:
"Clinuvel Pharmaceuticals Limited announced that it has entered into a second agreement with the GKV-Spitzenverband (GKV-SV) for the ongoing treatment and reimbursement of SCENESSE® (afamelanotide 16mg) in adult patients with erythropoietic protoporphyria (EPP). SCENESSE® is the only approved treatment for adult EPP patients in Europe."
This was a dispute between German health insurers and CUV. After an initial losing round for Clinuvel, an agreement has now been reached between the German health insurers and CUV. The settlement was already agreed last year, and has little relevance to the current share price. Some speculate that Clinuvel may be negotiating with other health insurers on the distribution of the drugs. However, I have no credible information not found.
Sources:
Insider sales at CUV:
2. https://www.marketbeat.com/stocks/ASX/CUV/insider-trades/
Agreement on drug sales with health insurers:
#update
#health
#clinuvel
#aktien
#getquin
#geld