Stocks sold February 2017: Eniro, Gerry Weber and Kernel

I wanted to keep Eniro until the very bitter end. Not because I believe they can turn anything around but simply as a monthly reminder of how poor the decision was to invest in them. To buy into a company where the CEO has been arrested for not running things with the company properly is not a good idea. To take a current event example then that would be to buy into Samsung now. Every company everywhere will have a couple of crooks employed. Once the authorities start to seriously look into a company or person for that matter then you will always be able to find something. It does not please me to say so but I honestly believe that to be true.

Eniro had a crook CEO. The CEO that took after was, by the look of things, not better. The person running the show now I neither know or care what or who he is. Key employees will have left the company and what is left is a call center in Poland.

With Eniro I additionally learnt to take a look at the goodwill. If your goodwill is higher than your equity and your tangible assets are non existing all the while having a large debt... well... that will not end very well and it did not.

Due to tax reasons I decided to walk a separate road compared to Eniro and I sold all my 850 shares, that I had paid 1035 € to acquire, for 13.60 €. There were some fees but I think I got some slack because they only reached the value of 13.60 € which means that I received zero € out for that sale. Due to that I once sold share rights for 74.50 € this "investment" did not become a -100% loss but merely a -93% loss. Eniro became, in the end, a 31 months holding.

The reason for why Gerry Weber ended up in my visual field at all was due to insider trading. The new CEO, the son of one of the founders, was each month buying shares after shares after shares. He did that when the share price was up at over 30 € so when it dropped down to around 20 € I started to look upon it as being an interesting investment. The new CEO kept buying shares. Not that long afterwards the price dropped further down to around 15 € before it started to settle around 10 to 12 €. All of a sudden the CEO was not buying any more shares.

In the article that I wrote when I bought the shares I was already then annoyed with myself because I never ever saw any customers in the store. Never. It was therefore a kind of anti-Lynch company where the books looked ok however a company without any customers will only end up at one location in the end. The bin!

I have too many companies and far too many within retail that removing one while having a tax benefit from doing so felt pretty ok. Gerry Weber you are out! and for the future of the company I hope that Ralf Weber will pretty soon also be out!

I sold my 50 shares including the removal of fees for 509 € which gives me a loss of 530 €. I received a tiny dividend in the size of 20 € which gives me a loss of -49%. Gerry Weber stayed with me for 28 months more than what they should have stayed.

Kernel was a pure low P/E, P/B and looking into a war zone where very often share prices of companies drops like stones even though they are still able to continue their business. Sometimes they are even able to perform better during such situations so it was a classical contrarian company. When I look back at the reason for why I bought it then there was not that many. I had tried to buy another one but ended up with this one... was more or less the reason for the buy. In war zones everything drops so maybe no other reason is actually needed.

I ended up buying more shares in Kernel on four different occasions which came from that the share price kept dropping and back then I had my "auto" rule of buying more shares when the drop went passed certain borders.

After a couple of years the share price started to increase and I was sitting around with a Ukrainian agricultural company, in a war zone, having plenty of business with Russia in the size of 10% of my entire stock portfolio. I then decided to decrease the holding and I sold off a large part of my shares at a profit of 35%. I now decided to sell off the rest of this holding because there were several things in the latest report that I have not been so happy with.

They are playing around a lot with the valuation of the crops on the fields and not only in storage. The have hired a person for hedging. The dollar is very strong and all crops are traded in dollars so their profits are inflated due to this... all the while they are unable to increase their revenue flow since many, many years now. An insider, it must have been the founder and CEO, sold off larger portions of shares during the end January. For me that was enough and I decided it was time to leave.

I sold my remaining 170 shares for 2864 € with a 92% gain. Looking at the entire Kernel investment then I made a profit of 2518 € and I received almost 160 € in dividends giving me a profit of 56% during the 45 months that I remained as a shareholder in Kernel.

My average holding time of my departed shares are now up at 29 months.

Any changes will be brought into the stock portfolio upon the next update in the very end of the month.

Retail report Q2 2016

This group is complicated to report on since almost all of them are running broken years and additionally I decided to bring in ABF into retail even though they are still so much more than retail... either way here goes...

Adidas

I am very certain that this report was well accepted. The share price has gone from around 110 EUR up to 155 EUR before it dropped down a little again to 145 EUR which it is at today. The report is excellent and yet there are difficult matters in it.

For the report in full please go here and to see my previous summary please visit Adidas report Q1 2016 and to find out more regarding Adidas then please go to  analysis of Adidas 2016.

The financial statement below is impressive. The net sales are up by 15% but they have managed to control their costs and for this reason we end up with a net income that is up by almost 70% in comparison to 2015. Impressive! With the Olympics etc. in 2016 it has turned out to be a very strong sports year. The sales in the USA as well as in China has completely exploded! So many signals have indicated that the US consumer is careful... well... apparently not for buying Adidas products.

Still... South America as well as Russia showed very weak results. Additionally, Reebok, TaylorMade-Golf and CCM-Hockey did not perform at all. All the strength and sales came from the Adidas brand and I must say that the Adidas products that I saw in the Olympics simply looked good. Well designed and beautifully made not like the Puma Switzerland football shirts that got ripped apart when the wind was blowing a little in the European championship.

Conclusion: Adidas have already in the first half of this year made as much money as they did for the full year of 2015. People have started to collect their earnings as would I have done if I would have had more of a focus. Still... if South America takes off and Russia as well... Hmmm... and China have started to buy the real brand and not fake versions... yeah, the journey has probably still not ended and I just managed to buy them at the very insane low price which makes me want to bring home my profit but I will suck a little more on my thumb here.

Associated British Foods

ABF have arrived with two reports in the meantime and only one of them, their half year report, contains numbers and their so called trading reports are just a bit of a chit chatting to be honest.

The report in full can be found here and for the previous report please visit ABF report Q1 2016 and to find out more regarding ABF then please check out the analysis of ABF 2015.

In the financial statement below things are looking ok but that is also all to say about it. The revenue is down and due to some cost control the earnings in the end is a bit up compared to last year. They keep coming with their adjusted this and that which I do not like but it seems to have decreased a little... could mean that things are actually looking better but well... who knows.

Conclusion: The most disturbing thing with Primark here in the UK is that they do not look more active, with their sales, than a normal H&M. They are far, far away from how it was in Berlin when I saw the stores there. Sure, normality always arrives and it is stale. Still, they are expanding hard and as long a company does that they will also keep growing their revenue and most likely their earnings.

ABF also arrived with their Q3 report and in it the only things mentioned of interest is that sugar seems to start to improve mainly due to increased prices but also due to cost control. They also expect to get mixed benefits due to Brexit and decreased valuation of the GBP.

Conclusion: In their Q3 report, which is a three pages report, there is not much to say. I was disappointed that the growth of Primark is not increasing by more than 7%. That disturbs me.

Fast Retailing

Fast Retailing and Uniqlo is another one of those companies with a broken year and for this reason the report concerns Q3 2016. The report is bad and I am not impressed.

For the report in full please go here, to read the previous summary then please click on Fast Retailing report Q2 2016 and to find out more concerning Fast Retailing then please visit analysis of Fast Retailing.

In the financial statement below we can see that they keep paying in earnings for their push in revenue and market share. Their 6% increase in revenue gives -47% decreased earnings. On top of this poor performance they even had to change their projections for the full year 2016 to much, much worse from something that already from the start was not very impressive at all.

Conclusion: Fast Retailing needs to tie up their costs and here we have yet another one of those companies that are pissing around with derivatives. Well done guys! I love their stores and I find that their cloths look good but they need to shape up!

Gerry Weber

Ooooh... wooow! This report is smashing! It follow the exact same trend as were seen in the Q1 report and already that one was amazing. Ralf Weber, please resign and please board give the position to the Hallhuber guy that seems to have some clue about the business.

To see the report in full please go here,  to take a look at the previous summary then please click on Gerry Weber report Q1 2016 and to find out more regarding Gerry Weber please visit analysis of Gerry Weber 2016.

In the financial statement below there is nothing to be happy about. Nothing. They keep living on the shoulders of Hallhuber and on their own they are losing money. Unacceptable.

Conclusion: Ralf Weber is not the right man for the job so please kick him out. They are pushing a new silly program called "FIT4GROWTH"! Are they little computer kids from the 90s? Adults should be able to write out proper words. Put the Hallhuber guy in charge and clean out the trash. 

TJX

The American giants they just keep on delivering. It is almost always an enjoyment to dig into the reports and also in this situation I am pleased.

To read the report in full please go here, for my previous summary please visit TJX report Q2 20156and to find out more about TJX then please click on analysis of TJX 2016.

In the financial statement below we see a consistent increasing revenue and even better we see a consistent increased earning and dividend payment. On top of this they also increased the guidance for the full year and this is in a period when the value of the USD has strengthened.

Conclusion: TJX is doing well and I am happy to be a shareholder in this American giant. They will keep growing in Europe and they will keep pushing for getting into those 40 billion USD revenue!

Overall Conclusion Retail: These companies are stretching from major home market being in Asia and Japan to Europe and going further to the US. Adidas is showing that Asia is doing but Fast Retailing shows that Japan is doing badly. ABF indicates that UK is not doing so good but the rest of Europe is ok. From Gerry Weber we can not extract any information since the CEO is useless and Germany is actually doing very well which we did not see from that report. TJX is showing that US is doing pretty good as did Adidas so that is good news to me especially since ABF is establishing themselves there more and more with now three opened stores.

Dividend from Gerry Weber: April 2016

My failed German retail investment at least have the decency to pay out dividend to the shareholders and for this I am... well... I was about to write grateful or happy but neither of those words are correct so I will just leave it as empty space. The thing is that the management is not bad in allocating the money. For instance had they not bought Hallhuber when they did then things would have been an even bigger disaster today so that was obviously a very correct decision.

I have 50 shares in Gerry Weber and for each share (after almost cutting the dividend in half) I ended up getting 0.4 € which means that I got paid out 20 € as cash to my broker account and no taxes were removed. This gives me a very disappointed YoC of 1.9%. 

To find out more regarding Gerry Weber then please visit analysis of Gerry Weber 2016.

To see my total dividend flow then please visit the Stock Dividends page that will soon be updated. 

Gerry Weber report Q1 2016

Due to my mistake this report arrives in quick succession to the annual report and therefore the conclusion regarding the share price development has not changed. The company is not doing well and I would like to mention once again the comment my mother said last autumn (ok, it is a new season now so things can have changed) when we entered the store... "it looks as if the cloths are for old women!". My mother is 70 years old and from this I must then conclude two things. One: I really have no clue who buys cloths at Gerry Weber. Two: Retired women today considers, apparently feels and obviously acts and wears cloths that are targeted towards younger customers.

Analysis of Gerry Weber 2016

Company: Gerry Weber 

ISIN DE0003304101 | WKN 330410 

Business: A German fashion retail and accessories company. They currently have four brands for women: Gerry Weber, Taifun, Samoon and (the new addition by acquisition) Hallhuber. Underneath the Gerry Weber brand they have an additional two brands (Gerry Weber Edition and G.W.). They run their own stores but also franchise as well as online and sale of their brands in department stores. 

Active: In over 62 countries. They themselves are running 1000 stores (219 from Hallhuber) 

P/E: 7.7

Gerry Weber annual report 2015

Here is the first big ball dropper for 2016! Not only have Gerry Weber arrived with the annual report but they are also out with the Q1 report for 2016 so well... the next three articles will be Gerry Weber related... on the day of the release I have of course no clue concerning the share price movement but Gerry Weber has not been doing well. Fascinating is it though that Ralf previously bought shares when it was at 25 to 30 € and have now completely stopped. I hope it is because his position is not to be treated as inherited and therefore also permanent and that he have started to realise this. But what do I know...

Gerry Weber report Q3 2015

This report from Gerry Weber was not at all well accepted. After dropping the -10% with all the other stocks Gerry Weber dropped around an additional -10% on this one. Was it that bad?

Gerry Weber report Q2 2015

My German fashion retail chain Gerry Weber arrived with their Q2 report and the reading was not very good to be honest and I can directly say that I kind of knew this by observing the amount of customers entering and being inside their stores.

Extra stock bought July 2015: Gerry Weber

This buy is very difficult to explain and most likely I will fail in doing so but still the company has been bought and is now part of my portfolio.

For month after month Gerry Weber has turned up on the inside trading reports. The reason for this was that there would be a management change in the company. Herr Weber the elder would leave the CEO position to his son Ralf Weber. Since Herr Weber the elder does not give away his own shares to the son, Ralf has been forced to buy and buy from the stock market. I like this. The new CEO steps in and the first thing he is doing is month after month to tank shares. To me that shows commitment and dedication. Sure he would probably inherit the shares form his father at some point but apparently he has considered the price for the shares to be low which is why he has been buying them at around 30 € per share for almost one year now.

Analysis of Gerry Weber 2015

Company: Gerry Weber

ISIN DE0003304101 | WKN 330410  

Business: A German fashion retail and accessories company. They currently have four brands for women: Gerry Weber, Taifun, Samoon and (the new addition by acquisition) Hallhuber. Underneath the Gerry Weber brand they have an additional two brands (Gerry Weber Edition and G.W.). They run their own stores but also franchise as well as online and sale of their brands in department stores. 

Active: In over 62 countries. They themselves are running 1000 stores (219 from Hallhuber)

P/E: 13.5

Analysis of Gerry Weber

Company: Gerry Weber AG

Business: A German fashion retail and accessories company with three brands for women: Gerry Weber, Taifun and Samoon. Underneath the Gerry Weber brand they have an additional two brands (Gerry Weber Edition and G.W.). They run their own stores but also franchise as well as online and sale of their brands in department stores.

Active: With their own stores (around 850) they are mainly present in Europe with strong focus in Germany, Austria and Switzerland. Lately they have starting to expand into the countries around them so Poland, the Netherlands, Denmark, Sweden (opening first store in Malmö soon and then in Stockholm). In total their brands are being sold in over 2600 stores world wide and have distribution channels in 62 countries.

P/E: 17.6

Comment: When I made this analysis there were serious problems with their homepage. I hope that it is sorted out by now so that you can check it out without problems. I liked that they kind of direct themselves to the older generation and not the young like most other companies. When I walked past one store they had a catwalk for retired people with a bit elder, not thin models showing what was new in the collection. Sometimes the world seems to forget that the old generation are sitting on big bucks... but Doro knows for instance this...