British Petroleum (BP) report Q2 2014

BP arrived also this week with their Q2 report for 2014. If you want to read the full report from which I have taken the information please go to the full Q2 2014 report of British Petroleum. The share price was slightly down around -1% upon the release of the report. For my previous BP report Q1 2014 please click on this link. What was then in the report?

Deutsche Bank (DB) report Q2 2014

The second quarter report from DB came out recently and the market did not respond much to it. Initially the share price jumped up but then it went quickly down again and start to fluctuate around the zero change from the previous trading day. What was then in the report?

Analysis of Fugro

Company: Fugro

ISIN NL0000352565 | WKN A0ET3V

Business: A Dutch geotechnology company. They are divided into four subunits: Geotechnical (resolve geotechnical problems offshore, nearshore and onshore), Survey (all kind of offshore and geospatial surveys for the development of oil and gas platforms), Subsea Services (repair, construction etc.) and Geoscience (seismic and seabed databases for the exploration of new projects).

Active: They are active world wide in over 60 countries.

P/E: 5.6

Analysis of Bongrain

Company: Bongrain

ISIN FR0000120107 | WKN 865541

Business: A French cheese and dairy producer. They have an amazing portfolio of cheese brands and for the full list of products please go to Bongrain brands.

Active: Present on every continent even though main focus is still France and Europe.

P/E: 17.8

Intel report Q2 2014

I am a little late on the summary of the quarter 2 report from Intel. When I started to look back I also discovered that I have completely missed to write a report concerning Q1 so that is indeed sloppy of me. Lately the share price of Intel has climbed a lot higher so why is that?

Analysis of Catlin

Company: Catlin Group

ISIN BMG196F11004 | WKN A0B93K

Business: A Bermuda / UK insurance company. The are dealing with niche insurance and reinsurance and have three primary functions: Underwriting Insurance & Reinsurance, Investing Assets and the third one is Managing & Paying Claims (so what they try to avoid as much as possible).

Active: They have six regional hubs: Asia Pacific, Bermuda, Canada, Europe, London/UK and the US.

P/E: 8.8

In the summer heat

At the moment we are having a strong heat wave in the Nordic countries and I was among the lucky ones having vacation at the absolutely best moment to enjoy the sun, the sea and of course plenty of BBQs.

Now it is high time to start thinking a little as an investor and to ask ourselves: who make money during a warm summer which will be seen during the Q3 reporting for 2014?

Ice cream producers will definitely earn some money! So maybe one should start to take a closer look at analysis of Nestlé and why not analysis of Unilever to look at some ice cream producers? Any other of interest that I have missed and should analyse?

I guess to that comes that people are going even more cafés to drink, maybe not a warm coffee or hot chocolate but something cold that all of them offer also today! Here is the analysis of Starbucks which might come in handy.

People will also consume more sodas so Coca Cola and PepsiCo will for sure do well and with the BBQ people like to drink beer so all the big beer producing companies will make larger sales during these hot summer weeks.

It may become the occasion that pushes people over to decide that they need to buy a pool for their garden. Who produce those? People might be pushed over to install AC-units to have a more evenly temperature control all year round. this will not only be beneficial to the producers of those units but also to the electricity producers. See analysis of E.On. 2014, analysis of Fortum, analysis of RWE 2014, analysis of Enel 2014, analysis of BKW Energy, analysis of Cez 2014, analysis of EDF, or why not analysis of Iberdrola.

Which other companies will benefit from a hot summer? Especially second line of benefiters would be of interest!
 

Kernel operating report Q4 2014

One of the few companies that I like but that is also having a tough time. The share price has once again dropped down to levels close to what it was down to when Russia stepped into Ukraine and most likely the drop is also based on this however there are other concerns that should not be forgotten...

Analysis of Enagas

Company: Enagas

ISIN ES0130960018 | WKN 662211   

Business: A Spanish gas company. Their pillars are the transport and storage of gas (three underground storages) and they own a large part of the entire gas pipelines (over 10,000 km) in Spain. They also run four regasification plants that converts liquefied natural gas (LNG) from -162 °C to atmospheric pressurised gas.

Active: Mainly Spain in Europe and since 2011 they have expanded into Mexico, Chile and Peru.

P/E: 14.0

Comment: This company looked much better on the screener and was there represented as having a P/E below 10. It is often that the screeners are not up to date with current affairs but as tradition holds. Once I make an analysis I also publish it online no matter what.

Personalized Index Fund C: July 2014

Grrrr! As can be seen in DAX vs PIF C graph above the final quarter also here was seriously bad! PIF C was even ahead of DAX with 1% and has now fallen behind with 2%. Both DAX and PIF C has been doing very well and have increased well above 20% each but in total this is now the third self composed fund that has been beaten by DAX during the first year running. If I would have had any investors then I am sure they would have walked away from the PIFs. Hahaha! To see the previous publication please visit Personalized Index Fund C - March 2014.

To see the composition of companies of PIF C please go to Personalized Index Fund C - December 2014. The PIF C fund is based on giving each company on DAX a value between 1 to 30 concerning P/E, P/B, dividends as well as ROE. The ten companies with the lowest score are then included into this fund and it will be re-balanced once per year.

To re-balance after the first year we removed:

Analysis of Zurich Insurance

Company: Zurich Insurance Group

ISIN CH0011075394 | WKN 579919      

Business: A Swiss insurance company. They have three core businesses: General Insurance (from individuals to large corporation will all their insurance needs), Global Life (protecting individuals for the future with life insurance, savings products etc.) and the third one is Farmers (insurances for farmers including re-insurance, additional part with insurance of motorhomes, travel trailers etc.)

Active: World wide active selling their products and services to customers in more that 170 countries.

P/E: 11.2

Associated British Foods (ABF) Q3 report 2014

There was not much to bite into with this report. ABF have a tendency to focus on the half year reports to the previous one and the annual one and there in between so Q1 and Q3 is minimal statements without in my eyes no useful information and presented in a format that I hardly agree with. Either way... they stock market was not so happy and ABF dropped with almost 2%. Was it correct I wonder?

Analysis of Pernod Ricard

Company: Pernod Ricard

ISIN FR0000120693 | WKN 853373   

Business: A French wine and spirits producer. The best way to look at it from my point of view is that they have two segments: Brand Companies (the famous brands run production and development in their home countries) and the second is Market Companies (they have received various regions where they must push out the products and they therefore hold the entire distribution chain)

Active: On 80 markets world wide biggest base is still Europe.

P/E: 19.4

Comment: This time I almost fell off my chair backwards when I took a look at the brands owned by Pernod Ricard and to my surprise saw Absolut Vodka standing there on the top row (Pernod Ricard brands). I was not aware of that the Swedish Government had sold that back in 2008 and I still thought it was Swedish. Oh, well... another day, another discovery. As the name tells the Ricard (pastis) belongs to Pernod Ricard and when I lived in the South of France every time me and my friends met up for dinner one of those bottles were always consumed before eating the delicious food.

Personalized Index Fund B: July 2014

The last two months before we re-weighted the PIF B was bad and the gap which was 3% unites expanded to be 5% units instead between the fund and DAX. So this very clearly means that DAX was beating also PIF B during the first year. To see the previous publication please go to Personalized Index Fund B - March 2014.

The previous company composition of the PIF B, that where the ten cheapest companies on DAX based on P/E, P/B and dividend, can be found in the article PIF B - Dec 2013.

To re-balance this fund we were forced to kick out found companies:

Analysis of Oriflame

Company: Oriflame

ISIN SE0001174889 | WKN A0B9NJ   

Business: A Swedish/Luxembourg soon to be Swedish/Swiss cosmetic company. By the look of it they move where the taxes are the most favourable. Oriflame have six product lines: Skin Care (for every age and skin type), Colour Cosmetics (three different lines directed to different ages of women), Fragrances (from modest to exclusively priced and developed in France), Personal & Hair Care (body care, oral hygiene, sun care, baby care etc.), Accessories (belts, pedicure sets, towels, bracelets, necklaces, earrings, etc.) and finally Wellness (shakes, bars... etc. anything that will help to make you beautiful from within).

Active: Currently selling their products in over 60 countries world wide with a 3 million large sales force (so called consultants) and 7,500 employees.

P/E: 11.9

Comment: Last time when I met my friends from Poland I was talking to them about Oriflame. The interesting thing was that almost every woman in Poland have one product from Oriflame (something similar to the Nivea from Beiersdorf (analysis of Beiersdorf 2014)) but what they said was that Oriflame is loosing ground. People in Poland today are prepared to pay slightly more for the cosmetics but maybe more importantly they want to go to a cosmetic store to buy it! So by the sound of it if Oriflame would have swapped from their sales consultants to putting up stores then they would have been able to keep their market share instead of loosing it as they seem to do these days.

Contrarian stock bought July 2014: IBM

I found it very difficult to decide which stock to buy this time. Not because there were no options but because there were too many options and companies that I wanted to buy. In the end it became IBM due to:

• This company is extremely innovative. In my field they every now and then comes up with inventions where you just go Wooow! How did they manage to do that?
• They are an American giant with insane earnings that are currently traded at a very fair value based on P/E see the analysis of IBM 2014.
• They buy back shares which gives me increased value without taxation (15% on dividends from the US)
• The dollar is in my opinion currently weak and will become stronger against the euro but it will take time. In the meantime it can be nice to pick up some fairly valued American giants. See my € vs $ reflection article.
• Berkshire Hathaway own shares in IBM (see Berkshire Hathaway - Warren Buffett Q1 2014) and the other company that I co-own with Warren namely MüRe (see analysis of Münchener Rückversicherung (MüRe) 2014) has performed very well over time.

The investment became a normal starting position so I bought 8 shares at the price per share of 138.89 € when I include the trading fees and in total 1111.1 € was converted from cash to ownership in a great American company. Needless to say that it will be a very long term investment.

With the next update of the monthly report the new change will be brought in to the Stock Portfolio.
 

Analysis of Remy Cointreau

Company: Remy Cointreau

ISIN FR0000130395 | WKN 883206

Business: A French luxury Cognac, Liqueurs and Spirits producer and distributer. The brands in their portfolio are: Remy Martin, Louis XIII, Cointreau, Metaxa, Mount Gay Rum, Bruichladdich, St Remy, Passoa and Izarra.

Active: Selling their luxury products to every continent. Sales are however 57% in Europe/Middle East/Africa, 34% Americas and 9% in Asia/Pacific

P/E: 25.2

Summer vacation during July 2014

Like so many other bloggers it is also time for me to go on vacation. Maybe in the future we should think about a vacation schedule so that there will always be a blogger still pushing out interesting articles and analysis of cheap companies!

Since I do not really like vacation but more or less have to take it from my job there is not really something to do about it but for the blog the story is different. I will therefore try not to take blog vacation but it will however be based on my neighbour... if he still has his internet open then I will continue to write articles at a semi similar productivity level and if not then I will have to every now and then go to the public library for internet access... but then the articles will also be more spread out. Happily there are a couple of articles in the pipeline that will be published so I think it will all work out. Concerning comments that you write my responses will be less quick but rest assure that I will see them at some point and I will respond to them.

Analysis of Banco Santander

Company: Banco Santander

ISIN ES0113900J37 | WKN 858872

Business: A Spanish financial group heavy in retail banking. They have, besides from the retail banking which is their core, six divisions: Global Wholesale (services to institutions and corporations), Asset Management (savings and investment products), Global Private Banking (financial advice and wealth management for their wealthy customers), Insurance Santander (family insurance and saving products), Payment Methods (credit and debit cards) and finally Universities (they give scholarships, grants and awards. I assume they do this to tie up educated people that will go out and make on average more money, live in bought houses/flats etc.)

Active: Business in over 40 countries with a strong base in Europe and the US. They are also present in several countries in South America.

P/E: 20.2

Owning your own time

Lately I have started to have strange thoughts which appeared due to that I was verbally assaulted by a neighbour for locking my bicycle on a location that blocked his safe exit from his apartment. What he said was not true but he obviously felt the need to complain on someone that day and I became the person in the focus.

The funny thing is... I go to work five days a week to earn money and to build up a sufficiently large stock portfolio so that I can live on the dividends one day. That day will be when I find working no longer entertaining enough no matter if I am 55 or 75 years old. I think that day will never come because I love to work and most likely I will keep working until I drop.

Dividend from ABF: July 2014

Associated British Foods pay dividends twice per year. The first one is the ordinary payment and it is paid out in January and then now in July they arrive with an extra dividend payment when things are going kind of well and since it is going well they paid it out. To find out more about ABF please see the analysis of Associated British Foods (ABF) 2013.

So I received 0.097 GBP per share and I have 100 shares which gives me 9.7 GBP with the conversion rate of 0.7946 I end up with 12.21 € paid out as cash to my stock broker account. The good thing for me is that the UK and Germany has a tax agreement which means that I pay no taxes in the UK and will only start paying taxes in Germany once my capital income goes above 810 earned euros.

The Stock Dividends page has now been updated.

Analysis of Banco Bilbao (BBVA)

Company: Banco Bilbao (BBVA)

ISIN ES0113211835 | WKN 875773

Business: A Spanish financial institute. It is currently divided into two business areas: Geographical (with Spain, Eurasia, Mexico, South America and the United States. In each region they are providing different services and since Spain is home base there they offer everything to their customers) and the second one is Global (with Corporate and investment banking, Global lines of business and Digital banking). Two me this looks as if they could not decide upon one strategy and instead went both directions with eight business bosses when it should have been either three or five of them.

Active: Europe mainly Spain but also UK and Portugal, in Asian only China and India, South America they are present in several countries and in North America in the US and Mexico.

P/E: 25.1

Personalized Index Fund A: July 2014

As can be seen in the graph above DAX did continue to beat PIF A for the entire year and we ended up with DAX being 26.46% up while the Personalized Index Fund A only increased with 18.90% (which is still around 25% better than what I accomplish with my stocks).

Analysis of Yandex

Company: Yandex

ISIN NL0009805522 | WKN A1JGSL

Business: A Russian/Dutch internet company. Their headquarter is in Russia but they are registered in Amsterdam. They have three business segments in this Russian "Google": Online Services & Mobile Applications (for their 100 million customers to help them with their internet needs), Technologies (the biggest Russian search engine with the infrastructure that follows) and finally Education & Research (run their own math & programming education to teach their future employees and to be able to hand-pick the best ones).

Active: Main activity is in Russia but they are also present in Ukraine, Kazakhstan, Belarus and Turkey.

P/E: 29.8

Analysis of ABB

Company: ABB

ISIN CH0012221716 | WKN 919730      

Business: A Swiss power and automation company. They are divided into five segments: Power Products (circuits, switches, capacitors and power distribution), Power Systems (solutions for power generation plants, transmission grids and distribution networks), Discrete Automation & Motion (motors, generators, robotics and DC chargers), Low Voltage Products (low-voltage circuit breakers, switches and control products) and finally Process Automation (solutions for control systems, measurement products and life cycle services).

Active: They are currently active in 100 countries world wide.

P/E: 19.0