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Hawks
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Agree with you, I've been on a tour of the European markets myself and have done a decent amount of posting on my blog.

 

I've been looking at two different types of companies, quality net-net's and hidden champion companies selling at cheaper prices.  I've found a few net-net's but nothing great.

 

With regards to hidden champions there are bargains in the countries no one wants to touch, Portugal, Italy etc.  Of the German companies I've looked at nothing has stood out as really cheap fire sale prices.  What I've seen in Germany seems to be the highest quality, but the market recognizes that.

 

Looks like your picks are a bunch of ADR large caps.  I'm much more of a small cap direct investor myself, do you limit yourself to ADRs?  I think a lot of the reason that this is a North American board is that most North American investors have trouble accessing world markets.  A second reason is that between the US and Canada a lot of investors have the view that there is more than a lifetime to research (a perfectly valid view).

 

Anyways as far as picks I'll throw out a few:

COR.Portugal, GAV.Swiss, ARGO.UK

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Agree with you, I've been on a tour of the European markets myself and have done a decent amount of posting on my blog.

 

I've been looking at two different types of companies, quality net-net's and hidden champion companies selling at cheaper prices.  I've found a few net-net's but nothing great.

 

With regards to hidden champions there are bargains in the countries no one wants to touch, Portugal, Italy etc.  Of the German companies I've looked at nothing has stood out as really cheap fire sale prices.  What I've seen in Germany seems to be the highest quality, but the market recognizes that.

 

Looks like your picks are a bunch of ADR large caps.  I'm much more of a small cap direct investor myself, do you limit yourself to ADRs?  I think a lot of the reason that this is a North American board is that most North American investors have trouble accessing world markets.  A second reason is that between the US and Canada a lot of investors have the view that there is more than a lifetime to research (a perfectly valid view).

 

Anyways as far as picks I'll throw out a few:

COR.Portugal, GAV.Swiss, ARGO.UK

 

Please tell us more about why these are great picks.  :)

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I've written up COR and ARGO on my blog, I also had a great conversation about ARGO on this board squished in some other thread.  In short:

 

COR - Owns the cork market, nice niche, innovative, balance sheet improving, results improving, sell worldwide but associated with Portugal, only about 20% of sales are local.  Family majority ownership.

 

ARGO - selling for less than net cash, management has incentive based on history to regain the company.  Options issued at double market price, could be bought out based on asset manager purchases for probably 3x current price.  Good downside, great upside.  They are an emerging market hedge fund manager.

 

GAV - Family owned company similar to COR in that it's a niche market, great ROE/ROIC ex-cash.  Sell worldwide have taken a hit recently due to a decline in solar subsidies and franc.  They sell sensor systems and components, specialized products.

 

All three of these are fairly illiquid, I've been able to buy within a day or two of placing my order.  I'm not sure how well you'd be able to accumulate millions of dollars worth, but then again I think the mcap for each is less than €150m.

 

I'll post the links to where you can find out more tomorrow when I get a chance.

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I like ARGO, but have no means to trade in UK. My friend was not so comfortable with this for some reasons, so I chose to pass. Anyway, it can work out brilliantly.

 

And in my opinion, EU is not cheap. I've looked at some companies. Considering the risks, valuations are not very good. I still think there is better value in AU.

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  • 3 months later...

Has anyone looked at ACS, the Spanish construction company that has a majority stake in Hochtief as well as a complicated non-recourse-debt-funded stake in Iberdrola?  I looked at it a while ago and decided it was too complex but it is a lot cheaper now, on under 5x headline eps and yielding over 10%.  Just wondering if anyone can save me some work on it ;)

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I'd like to buy some more stuff in Europe as well, but not finding a lot so far (do already own both ARGO and PRIS.B). Something in spain/portugal/greece with a lot of exports and little debt. Maybe I should checkout COR.Portugal.

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