BP report Q2 2013

Yesterday there was also the half year report from BP (it can be found here). I must admit that I had forgotten to add that report to my calendar and for that reason I did not discover it until I saw that the stock had retreated almost 4% and I started to wonder what was going on.

 The reason for the retreated stock value was due to:

K+S down almost 25%

Today the share price for K+S (see old analysis here) dropped by almost 25%. The reason is that Mr. Market fears that the potassium price will significantly drop because the oligopoly structure might break down since Uralkali (a Russian potassium mining company) decided to leave the Belarusian Potash Company (BPC) that are/were trading 45% of all potassium in the world to start working with a new trading company in Switzerland instead.

Deutsche Bank report Q2 2013

Deutsche Bank came out with their half year report this morning and in it is not being accepted very well by the market. As I understood from the news that I read the main reason was that the earnings were lower then expected. The reason for why the net earnings was lower was based on two things:

1. They still have to push up their capital even though they brought in money by making 90 million new shares and selling that to institutes one would have hoped that to be enough.
2. They had to set even more money aside for litigations and future legal complications... sad... (it is now up at 3 billion euro).

Analysis of Trelleborg

My brother, who every now and then drop in to read my blog, had a small request about my contrarian analysis. He wanted to see ROE (Return on Equity) also. So for that reason I have now started to implement that. If any of you out there have similar requests then please just notify me and I will see if I can implement it or not. The reason for a negative response will be either time based or it will be based on that I think it will be too far from the contrarian analysis that I prefer to look at. I will notify you either way. As an example the ROE that I calculate is not based on an average value but from the last financial year which is to decrease the time needed for the analysis. Personally I do not believe that a deeper analysis will automatically lead to a better decision making. At least my experience as CEO in my company has not indicated that to be the case for me but you might deal with it differently and I always recommend each and every one of you to make your own analysis. I might make mistakes and to invest based on that is unacceptable.

Secondly my brother brought up the classical issue with when to sell a stock. He is currently in the very fortunate position of having an almost six-bagger (5.7) and are therefore wondering if he should sell it or not. I therefore made a very quick analysis of it and sent the reply to him and now I finally had the time to expand on that and make the more, for me, "proper" analysis.

Very recently there was an article published about the company based on their half year report. They claim that one should stay "neutral" meaning keep but do not buy more of the stock. I disagree. The full article can be read here and it is in Swedish.

My recommendation is to sell and to invest the money into a new value based company which there still seems to be a fair amount of around even today. If you have a different opinion then please leave a comment so that it can be discussed.

Analysis starts

Company: Trelleborg

Business: A Swedish company that are a world leader in engineered polymer solutions that seal, damp and protect critical applications in demanding environments. The Trelleborg Group comprises five business areas: Trelleborg Coated Systems, Trelleborg Industrial Solutions , Trelleborg Offshore & Construction , Trelleborg Sealing Solutions and Trelleborg Wheel Systems.  


Active: They are globally active but 56% of their sales are from Western Europe with a very matured market (8% only). 20% sales comes from the US with a growth rate of 48% and 24% sales comes form the rest of the world with a growth rate of 105%.

P/E: 18.1

Analysis of Sektkellerei Schloss Wachenheim (SKSW)

Company: Sektkellerei Schloss Wachenheim (SKSW)

Business: A German based world leader in sparkling and semi-sparkling wine production, with sites in Germany, France, Poland, Romania and the Czech Republic for production. The market brand names are Faber, Feist, Light Live, Schloss Wachenheim, Nymphenburg Sekt, Schweriner Burggarten, Charles Volner, Muscador, Opéra, Cin&Cin and Dorato. The company group also sells other product ranges such as wine, alcohol-free wine, vermouth, spirits and other wine-based drinks.

Active: The sell their products in over 80 countries on all continents.

P/E: 8.1

Analysis of Hamburger Hafen & Logistik (HHLA)

Company: Hamburger Hafen & Logistik (HHLA)
  
Business: A German Harbour and logistics company that are present in the biggest port of Germany dealing with the loading and unloading of containers as well as transport via railroad or trucks to bring the goods to their clients. Besides from logistic they have property in the harbour and large fruit & vegetable storage.

Active: In Germany and especially towards eastern Europe. It will be interesting to see how the effect will be of the Chinese train connections that very soon will connect directly to Hamburg. Will HHLA unload much less because everything from China will go by trains? Will it become easier and cheaper to reach east US by going over Europe first with the train? I really have no clue but I see big risks as well as chances and I am not able to value it.

P/E: 17.4

Analysis of AS Création Tapeten

Company: AS Création Tapeten

Business: The leading wallpaper manufacturer in Europe today based in Germany with more than 6000 different wallpapers in all material qualities and for all application areas. A.S. Création offers its customers a wide range of services: comprehensive departmental planning, shop-fitting, ordering, decoration, individual marketing concepts, sales promotional packages, concepts for point-of-sale (POS), as well as a 24-hour delivery service.

Active: They are mainly active within Europe with several sales offices hat are located in Germany, France, the United Kingdom and the Netherlands besides from Europe they also have a sales office in Moscow.

If you would like to read a more proper analysis from 2011 then please check out this article from a fellow blogger please be aware of that it is in German.

P/E: 14.7

Analysis of PNE WIND

Company: PNE WIND
 
Business: A German wind power company with focus on the development, realisation, financing and operation of wind farms on land and at sea, at home and abroad. So they do not produce the wind turbines like Nordex and Vestas but they organize the construction of wind power plants and they also run them on their own.

Active: They have 100 wind farm projects with a total rated output of around 828 MW already successfully completed in the German home market as well as in Hungary, Bulgaria, Rumania, Turkey, UK, USA and Canada.

P/E: 7.3

Analysed contrarian stocks in one list

I´ve spent a bit of time with excel lately to make a list with the companies that turn out to be good investments according to the contrarian analysis that I am making. What is a bit disturbing with it is that not all the stocks that I own are on that list. In most cases that are based on that when I bought them then they were on the list but when I made the analysis of them one year to six months later they had already fallen out of the list.

Either way I hope that you will find the list useful and I will try to update it once per month with new good contrarian finds as well as their current stock prices. The list can be found here.

Analysis of Nordex

Company: Nordex

Business: A German wind power company that at least not very clearly either on the homepage or in the annual report divided the company into: Wind turbines (single sale of units), Project services (planning and selling entire wind power parks) & Service... but I still decided to make this division. Their focus is more towards the overall operational sub-strategy then to make separated divisions.

Active: They have today more than 5300 wind turbines with an output of more than 8.5 Giga watts and are present in 34 countries of the world. They have offices and subsidiaries in 19 countries. So they are much smaller than Vestas.

P/E: -4.6

Analysis of Vestas

Company: Vestas Wind Systems AS


Business: A Danish wind power company that started back in 1979. They have three business units: Advanced wind turbine technology, Efficient manufacturing of wind turbines and Sale and service of wind power plants. Most likely the final one will grow more and more for each year and will in the end become the most lucrative part of their business but that will for sure last some more years until you get a nice business from exchange of parts and service contracts of the wind mills.

Active: They claim to be global by saying that they have installed wind turbines in more than 70 countries. (Has sold and installed 48,950 wind turbines or 55,370 MW globally as per 31 December 2012)

P/E: -2.8

New stock bought: Enel

Even though I was very disappointed with my first month and with this I mean that I received taxes back (see article) in the quantity of  361 € and I did all I possibly could to cut cost by pushing down my food costs etc. I was still only able to transfer 241 € to my stock account. That was very sad or maybe I should in a way be happy because it indicates that my life, even when I live it normally, is very low cost. So when I try to decrease that even further it has a very small impact.

Kernel operation report Q4 2013

Kernel are using a broken year that ends in the end of July each year. The annual report then arrives sometime in August but they still like to give a report concerning the operations of the fourth quarter and it can be found here.

Intel Report Q2 2013

Last night at 22h00 Intel came out with the financial report concerning the second quarter of 2013 and it can be found here. The earnings has jumped down from around $2.8 billion per quarter to around $2 billion which is a significant decrease not only in earnings but of course also in revenue. This is coming from two reasons that they have been beaten by Qualcomm and ARM on the smartphone/iPhone and tablet/iPad market as well as the tablet effect which has decreased the sale of laptops. I do however find it interesting to see that people are now stepping over to desktop computers again and prefer to work with those in comparison to a laptop. Intel will hopefully benefit from this in the future because their microprocessors are superior.

Addition to investment mistakes & to the rules

For a long time I have been thinking about how to deal with drops in stock prices of stocks that I already own. I was previously thinking about that when it drops 30% or 40% or whatever specific number then I should step in and buy more stocks. I have also done this pretty consistently in the past year which caused two things to occur:

1. I was not able to buy new interesting stocks that I actually wanted
2. They continued even further down

I will therefore add this issue as a running mistake for 2013.

The new suggestion for investment rules will therefore be... no matter how far it drops unless they are showing a quarter or half year report with good results I will not buy more of the stock. True I will miss some of upside but then at least the company is back on their feet when I step in with
more money again.

I hope this adjustment will improve my investment strategy.

What are your rules? Do you think this is a good addition for me?

Analysis of K+S

Company: K+S

Business: The K+S Group is one of the world's leading suppliers of standard and speciality fertilizers. They used to have three parts but since 2011 they discontinued their Nitrogen Fertilizer and today they have: Potash & Magnesium Product as well as Salt. They themselves claim to be the biggest world producer (miner maybe better) of salt.

Active: They have a very strong presence in Europe and North America. A few sites in South America, Africa and in Asia but nothing really to brag about.

P/E: 7.7

Analysis of Exxon Mobil

Company: Exxon Mobil



Business: An American oil and gas company. They are divided into three parts: Upstream, Downstream and Chemicals.

Active: A global player that have exploration and production acreage in 36 countries, production sites in 23 countries and sales of natural gas in 33 countries with interests in 32 refineries in 17 countries and the chemical industry, with interests in 46 wholly owned and joint-venture manufacturing locations worldwide.

P/E: 9.2

Analysis of Chevron

Company: Chevron


 
Business: An American oil and gas company that are divided into three parts: Exploration & Production (oil & gas), Manufacturing Products & Transportation (manufacturing, global trading, products, pipelines, lubricants, shipping & oronite) and Other businesses (chemicals, mining, power & technology)

Active: They are active in 36 countries on six continents so a global player.

P/E: 9.0

Eldercare in Germany

Germany is in many ways in between the northern European system and how things are running in the south.
In the north of Europe everything is based on the individual person. Each and every one, independent of your family situation, should be able to survive on their own. If you are not able to then the government is acting as your family and support you. As example to study at University level in Sweden you receive some money for free from the government and then you can borrow the rest to survive. Anyone can do this. When you become unemployed you receive unemployment money.

Analysis of Total

Company: Total

Business: This French oil & gas company which is the fifth biggest in the world is divided into three parts: Refining & Chemicals including Trading & Shipping, Marketing & Services including Solar and Biomass activities and finally Exploration & Production and Gas & Power.

Active: Total is active all over the world and are currently operating in more than 130 countries.

P/E: 8.3

Associated British Foods Q3 report 2013

Associated British Foods are running a broken year. They only publish half year reports, which I must admit that I like very much because it removes some stress and of course is cheaper but still, in Q3 and Q1 they arrive with a financial statement. Today they therefore reported on Q3.

Analysis of Royal Dutch Shell

Company: Royal Dutch Shell

Business: This Dutch oil company is divided into three units: Upstream explores for and extracts crude oil and natural gas, Downstream refines, supplies, trades and ships crude worldwide, manufactures and markets a range of products, and produces petrochemicals for industrial customers and finally they have Projects & Technology manages delivery of Shell’s major projects and drives the research and innovation to create technology solutions.

Active: They are active in over 70 countries world wide. As a small comment I know people that are working for Shell and I´ve never heard a bad word from them. It is a company that very early on started to take very good care of their employees and that is not based on salary but based on work / spare time ratio. A burned out employees simply costs far more then sending that person off for a week on vacation.

P/E: 7.5

Update personalized fund A: June 2013

The personalised index fund that I created from DAX is moving forward. Well better put it is moving worse than DAX but besides from the initial big difference that happened in the first 1,5 months this month the difference almost remained as it was.
DAX is since the start of the experiment (Start: 7682.58, 8/7-13: 7968.54) increased by 3.72%.
The personalized index fund (Start: 60115.39 €, 8/7-13: 58871.22 €) decreased by -2.07% which means a total difference of 5.79% between the two.

This personalized index fund is purely based on the performance in the last year and I will correct the ratios once per year. The correction means to sell off part of the five best performers and to increase in the five worst performers. This month we could also see that "stocks are like rabbits over time". Because from 10 Siemens stocks we received 1 stock of Osram light AG which means that we ended up having 2.5 stocks of Osram light AG. These will be kept in the fund and left as they are.

Analysis of Berkshire Hathaway "small"

Company: Berkshire Hathaway

Business: An American conglomerate that is involved in companies in any industry. For a longer list of companies fully owned by Berkshire please see here. For taking a look at the stocks that they own in the US please see here.

Active: They were for a long time very focused on the US but have started to move further out in the world and of course the companies they own fully or parts of are world wide.

P/E: 19.2