Commerzbank annual report 2013

I had apparently made a mistake when I booked the date for the release of the annual report from Commerzbank which means I am a week late on this one. The market was happy about the report because the shares directly jumped up with almost 3%. The running woman (still to be seen on the poster I the back) is being taken over by a bicycle and obviously higher speed. She should have worn a helmet though to show that they are decreasing risks.

Personalized Index Fund C: March 2014

The fund that directly from the start has been running the best has been PIF C. Here also the parameter of ROE was involved to grab the companies that not only were cheap but also are good in handling the money they receive in profit. The full list and of companies involved and the previous publication can be found here.

What we see is that the last quarter has been good for PIF C and we have gone from +19% to +24% which is a difference of +5% while in the same period DAX has moved from +21% to +23% which is only a 2% increase. This then also means that PIF C is currently performing better than DAX not only quarter wise but overall.

It will be exciting to see if this progress can be kept up and which companies that will be brought in with the next change of the PIF C composition.

 

Personalized Index Fund B: March 2014

The previous publication about PIF B can be found here and there I go over exactly which companies are included into the fund and how I decided to produce the "fund" which in a way comes more down to mechanical buying of the cheapest DAX companies and make a correction once per year.

What we see is that the development in the last quarter has been excellent for PIF B! We have gone from 13% to 20% which means an increase of 7% and if we compare this to DAX we have for the period severely beaten it since they have only increased 2% going from 21% to 23% plus since the start of the experiment.

DAX is still overall beating me but I am definitely getting closer with the 10 companies that I picked to be included in PIF B.

 

Personalized Index Fund A: March 2014

So how has my PIF A been doing since last update you might wonder? Maybe you do not wonder about it but I did so I updated all the share prices on my horrible excel table to see what would drop out in the end and what we do see is that there has been some improvement over the last quarter!

For the previous publication concerning PIF A please look here.

So from the start of this experiment the development of DAX has been 22.7% and PIF A is at 17.9% which means that PIF A is being beaten by DAX. However in comparison to last quarter PIF A have made a giant leap forward with +3.6% while DAX has only improved by +1.5% during the same time period. I will keep my fingers crossed that this will go on but I doubt it with PIF A since it contains all the companies on DAX with only a slightly different value weight to them based on their previous years performance.

PIF A will be re-weighted once per year which means that before the next update of this fund a re-weighing will have taken place that I will then also report on how I did that but it will be done according the performance of the company during the last year.


 

Analysis of Hoftex Group

Company: Hoftex Group

Business: A German company producing yarn and fabrics. They have four divisions: Hoftex Yarn & Fabrics (they brag about using the latest machines from Picanol that I have previously analysed to produce fabrics for book-binding, sunscreen, abrasive belts, v-belts or for protective clothing), Neutex Home Decoration (all kind of decorative fabrics for pillows, curtains etc.), Tenowo Nonwovens (used in several details in for instance cars and smaller parts of clothing, most successful part!) and finally Hoftex Immobilien (they try to rent out their excess office space)

Active: Production is in 11 countries in Europe, North America and in Asia and they claim to make world wide sales...

P/E: 9.7

Comments: Their holding company homepage was horrible. Several links were not working and information was for years not updated on the English site version but happily on the German so I managed to get all info needed. Second thing is that their annual report for 2013 is still not published so this analysis concerns the result from 2008 to 2012.

Analysis of Deutsche Bank (DB) 2014

Company: Deutsche Bank

Business: A German investment bank and the largest bank in Germany. They have five products and services pillars that they call: Private & Business Clients (classical banking services: accounts, deposits, loans, pensions products), Asset & Wealth Management (helps institutions and wealthy individuals to increase their wealth across all asset classes), Corporate Banking & Security (sales, trading etc of financial products such as equity, bonds etc. as well as dealing with mergers and acquisitions), Global Transaction Banking (world wide banking services and products for corporates and institutions. This is why Deutsche Bank is consider to be systemic important in the world) and finally None-Core Operations Unit (simply they put all the risky assets in this part so that they can still run around claiming that the "core" bank business is doing extremely well with such a high profit and only this little non important unit is what is dragging down the rest of DB. There is a good word to describe what I think about that but I will not write it on this blog).

Active: Traditionally a large bulk of their activity is taking place in Frankfurt in Germany and of course in London in the UK. In total they are however present in 70 countries in every continent in the world.

P/E: 49.1 (P/E5: 13.1)

Deutsche Bank (DB) annual report 2013

My biggest bank, Deutsche Bank, arrived some days ago with their annual report which can be found here. The markets response was swift and they made the thumbs down already then and it has continued on a slow slope downhill in the days after the publication of the report.

Deutsche Beteiligungs AG (DBAG) report Q1 2014

The Q1 report 2014 from DBAG went by pretty unnoticed by the market but since I am a shareholder I took a slightly closer look at it.

Analysis of Münchener Rückversicherung (MüRe) 2014

Company: Münchener Rückversicherung

Business: A German re-insurance and insurance company. They are divided into three larger groups which is the Re-insurance (50% of revenue what they do is to give insurances to insurance companies which means that the deals are big and often complex in nature), Primary Insurance (Around 35% of revenue and concerns every classical insurance that you as a private person or business need for your every day life) and finally Health Insurance (Less than 15% of revenue and concerns all the health related insurances that people need).

Active: The are with their three divisions present all over the world on each continent. Their strongest presence is traditionally still Europe and Germany.

P/E: 8.3

Münchener Rückversicherung (MüRe) annual report 2013

One of my few well behaving companies arrived with their annual report for 2013 and that was Münchener Rückversicherung. The market liked it but too me there was not really anything new besides from that they also mentioned that they are planning to buy back shares for around 1 billion euro.

Analysis of Enel 2014

Company: Enel

Business: An Italian energy and gas company. They have hydroelectric, thermoelectric, nuclear, geothermal, wind, solar and other renewable power plants. They also have the network not only for electricity but also for gas pipelines.

Active: Strongest presence is in Italy and in Iberia (= Spain and Portugal). Some presence in France, Slovakia, Romania, Greece and Russia. In Latin American they have a strong presence with renewable energy. In North Africa they are active with exploration of gas fields. In total they are present in 40 countries on four continents.

P/E: 11.8

Enel annual report 2013

As of yet I have only managed to read the press release (which can be found here) from Enel with them highlighting things they liked and the market responded fairly positive to the news. For instance have Enel decided to start to pay dividend again and at least that shows that they have some confidence in the future so that is indeed good news.

Analysis of K+S 2014

Company: K+S

Business: A German potash, magnesium and salt miner. The group is divided into the two segments Potash & Magnesium (that is being used as standard and speciality fertilizers for enhancing the agricultural harvests) and Salt (de-icing, purified salt that are used for instance as table salt etc.).

Active: Main focus in Europe and the US. Growing activity in Canada due to Legacy mine that is under construction. Minor presence in South America and Asia.

P/E: 10.2

K+S annual report 2013

Oh, the market was very unhappy with K+S and it did not come from the publication of the report but it came the press release that for instance suggested dividend of only 0.25 cents per share (1.4 in 2012). As well as having pushed down margins, flat revenue so decreased profits and a weak outlook for 2014. The classical drop of around -5% which in the end went to -7%.

Analysis of Gravity

Company: Gravity Co. Ltd.

Business: A Korean online game company that are traded on Nasdaq and is to 59.3% owned by the Japanese game company GungHo. Gravity have five business fields: Online Games Development (producing games, most well known in Ragnarok), Mobile Business (trying to make Ragnarok possible to play also on mobile units), Multi Platform (making Ragnarok DS that works on Xbox 360 live, PSP ect.), OSMU (trying to expand the games into animation, toys, music etc.) and finally IPTV (working on developing new business models and games for the TV).

Active: As any online company they are present world wide with their games and servers for providing a nice experience for their customers.

P/E: -0.4 (made loss in 2012 and 2013 is not looking better) P/E5: 4.6

This company was analysed due to a request that can be found here.

Analysis of E.On. 2014

Company: E.On SE

Business: A German energy provider and electricity producer. They are currently having nine different business areas: Power Generation (includes all so nuclear, coal, gas, wind, oil, solar they do it all), Distributed Energy (working with local production units such as SLG Units and combining energy and heat production), Exploration & Production (gas and oil with main activity in the UK and Norway at the moment), Gas Supply (making sure that E.On receive enough gas to supply their customers), Gas Storage & Transport (pipelines and underground storage), Trading (they buy and sell gas on 20 different exchanges in 40 countries. This I do not like and the sad thing is they are even proud of making one trade every minute all year round to reach a total of 850,000 trades. I definitely hope that they pay less per trade than what I do when I buy stocks!), Distribution (gas as well as electricity infrastructure including smart meters etc.), Sales (to small clients such as me as well as companies and heavy industry) and finally Technical Services (mainly software for making calculations concerning natural gas)

Active: Present in several European countries with main focus in Germany. Due to gas they are also in Norway as well in Russia. Lately they have stepped into the Brazilian energy market.

P/E: 12.6 

E.On. annual report 2013

Germanys biggest energy provider as well as being one of my holdings arrived lately with their annual report. The market accepted it very well since it was up almost half a %-age on a day that generally was very negative and over the day it kept going further and further down. So what was then in the report?

Analysis of Procter & Gamble

Company: Procter & Gamble

Business: An American consumer products company. They are divided into four divisions: Global Beauty (Hugo Boss, Olay, Head & Shoulders, Pantene, Mexx, Wella ect.), Global Baby & Feminine & Family Care (Always, Tampax, Pampers, Naturella etc.), Global Fabric & Home Care (Mr. Clean, Ariel, Duracell, Ace, Tide etc.) and finally Global Health & Grooming (Gillette, Braun, Oral-B, Vicks, etc.). For a more complete list of brands please look here.

Active: They are active world wide selling their products in over 180 countries and serving 4.6 billion consumers according to themselves.

P/E: 20.3

Kernel report H1 2014

The half year report from Kernel was a big disappointment and the stock dropped directly 5% which kind of disappeared due to all the other problems with Russia stepping in to Ukraine etc. which has caused the price of the shares to drop and it keeps dropping so the knife has not yet stopped to shake. Still was it correct of the market to respond with a drop in the shares based on the report?

Analysis of Johnson & Johnson

Company: Johnson & Johnson

Business: An American pharmaceuticals and consumer products company. They are dividend into three pillars with: Consumer Healthcare, Medical Devices & Diagnostics and Pharmaceuticals. To mention a few of their products: Aveeno, Listerine (which I use myself when I have been a bad boy and eaten too much sweets), Neutrogena, Xarelto, OneTouch, Baby Care, Doxil etc. For the full list of brands and products please look here. They have over 250 companies underneath the Johnson & Johnson umbrella.

Active: They are present in over 60 countries all over the world.

P/E: 19.4

Dividend from Intel in March 2014

While I was off in India one of my companies paid out dividend to me. Those papers from the bank always comes to me as a happy surprise and I keep wondering if I am ignorant since I do not keeping track of when the dividends should come from each of my companies. Do you keep track of all your companies and when they pay out the dividends to you?

So from Intel I received for the quarter 22.5 USD which gives me after conversion 16.31 EUR and from that I pay 2.45 EUR in tax which leaves me with 13.86 EUR that is added to my stock deposit account.

Lately there has been some interesting news concerning Intel that says that Intel missed the train slightly on the mobile market but might have just the correct product for the next train leaving. I have no clue if that is true or not and I have definitely no clue about what that next train will be but I am certain that new trains will keep coming and with each train the criteria and the needs will change accordingly.

My contrarian way of investing does not mean that I try to foresee the future. I just look at the past and today and try to buy shares in companies that have been performing well in the past and are for whatever reason being traded cheaply today and never forget one of the rule of thumb in business... 8 to 10 years from now 25% of the companies total revenue is coming from products being developed today.... unless you are Coca-Cola or similar brand heavy consumer product companies.

The Stock Dividends page has now been updated.

 

Change made to my investing and divesting rules

In the rules that I made for Investing & Divesting I had a very final rule that said that if I could not beat DAX in 3 years then I had to shuffle 50% of my net worth into a low cost index fund, after 6 years 75% and after 9 years of failure all of my net worth should be pushed into an index fund.

This rule was made very early on in my investment "career" and was based on me trying to protect my net worth from too many years of losses. It would force me to step into a system that is well known that it works, meaning the low cost index funds, which every person should consider to invest in to have a guaranteed healthy return of the investment when made for a longer period of time. In this reflection you can read a bit more about other hidden benefits of index funds.

Lately I have been re-reading books, I have listened to Peter Lynch, I have listen to Walter Schloss and several other well known and less known investors and many of them claim that the best years for their investments have started around year 4 when they have bought cheap companies. These guys have been around for so long and knows so much more than me that it must be true and I must take their word for it which means that I decided to re-adjust my final rule and to increase the years that I give myself to beat DAX so:

If I have not managed to beat DAX in 5 years then 50% must go into low cost index fund, after 10 years 75% of my net worth must be there and after 15 years I will go all in on the low cost index fund.

What is your experience? How many years has it taken your investment to give a healthy return?

 

Analysis of Nestlé

Company: Nestlé

Business: A Swiss consumer products company. The main focus is within nutrition, health and wellness. To mentioned a few of their brands then: Gerber, Perrier, KitKat, Smarties, Nescafé, Maggi and for the more complete list please look here.

Active: They are a complete diversification on their own and are present on each continent in the world, selling their products and well known brands. In total they have around 340,000 employees.

P/E: 21.5

Analysis of Tallinna Vesi

Company: Tallinna Vesi AS

Business: An Estonian water company. They are dealing with three things: Water Supply (mainly to the capital Tallinn), Collection of Wastewater (making sure that the pipes goes to their centrals) and finally Wastewater Treatment (cleaning all of it before sending it out to the Baltic). They have managed to receive all the quality stamps that EU hands out and they own the rights to provide and treat the water from Tallinn until 2020 (meaning simply that they have monopoly for another 6 years) . This means that they are servicing over 30% of the entire population in Estonia.

Active: Estonia and more specifically in Tallinn and suburbs to Tallinn.

P/E: 11.2

Delhi, India: March 2014

I have spent the last couple of days in India and more precisely in Delhi. For tourists Delhi is usually a point of entrance before going somewhere else in India and usually to locations that are less crowded and generally considered to be more beautiful than Delhi. Because to be honest Delhi is more the beast of India.

The first ting that hit you when you enter India is the smell in the airport. That smell is simply the odour of India for good and bad. It contains spices, it contains curry, it is a heavy musk smell, it contains strongly concentrated urine and a hint of garbage is also in there. The first time I smelled it I was blowing air out of my noise a couple of times and this time it was more like "Ah... I am back in India again!"