As regular readers know, I co-hosted the 21st edition of the Value Investing Seminar in Italy earlier this month...
During it, I gave my own presentation (I discussed it in my July 8 e-mail). And of course, I also saw a number of other interesting presentations and stock ideas.
Today, I'll share the highlights from one of those. It's from my friend Christoph Hilfiker of LLB Asset Management in Liechtenstein.
In it, Christoph discussed three European stock ideas:
- Dutch maker of chipmaking equipment ASML (ASML.AS), which also trades here in the U.S. on the Nasdaq under the ticker ASML...
- German athletic company Adidas (ADS.DE), which also has an over-the-counter U.S. listing under the ticker ADDYY...
- And French luxury-goods giant LVMH (MC.PA) – it trades over the counter here in the U.S. as well under the ticker LVMUY.
All are large, high-quality businesses – with stocks that trade in the U.S. And Christoph was kind enough to give me permission to share his entire 36-slide presentation, which you can see here.
So let's start with his pitch on ASML...
1) Christoph summarizes his investment thesis for ASML as follows:
• Technology Moat: Reducing the size of artificial intelligence (AI) chip structures – a must for the use of AI in smartphones.
• Earnings Momentum: Tool productivity (costs) and litho intensity (semiconductors) should continue to boost margins.
• Growth & Value: As a classic growth company, ASML also earns the cost of capital, is highly profitable and has a very attractive valuation.
In this slide, he shows that ASML is a high-return-on-capital, high-margin business:
But ASML's stock is down more than 25% from its all-time high a year ago. And today, it sits at a level it first reached about four years ago. Take a look at this 10-year chart:
As a result, Christoph believes that the stock is attractively priced – take a look at this next slide from his presentation:
2) Christoph's second idea, Adidas, has more than doubled off its late 2022 lows. But the stock is still about 35% below its all-time high four years ago. Here's a 10-year chart:
Christoph also says that Adidas has "strong momentum in the Terrace (Samba) & Lifestyle segment." And he believes the company will rise "like a phoenix from the ashes":
Like ASML, he argues that the stock has fallen to an attractive level – take a look at this slide:
3) Lastly, Christoph likes LVMH. Regular readers are familiar with the company – I've discussed it numerous times:
- My first look at LVMH (November 14, 2024)
- A deeper look at LVMH (part 1) (November 21, 2024)
- A deeper look at LVMH (part 2) (November 22, 2024)
- Updates on LVMH, Lululemon Athletica, and Five Below (January 17, 2025)
- Bad news for the luxury market in China (February 20, 2025)
- Struggles at LVMH (April 17, 2025)
When I last discussed LVMH on April 17, I concluded that:
I would love to say it's now a great time to buy... but the stock still trades at 20 times this year's earnings estimates – and I think those estimates are at high risk due to a possible recession and trade war with China.
In his presentation, Christoph shows LVMH's high margins and rising free-cash-flow yield:
He also argues that the company's Louis Vuitton and Dior brands will drive growth:
And he believes that the stock is trading at an attractive level:
Thanks for sharing these three interesting ideas, Christoph!
Looking ahead, I'll have an eye on Adidas – and I've still been loosely following along with LVMH.
Meanwhile, ASML will be familiar to Stansberry's Investment Advisory subscribers...
My team recommended buying the stock in November 2022. And subscribers who followed the advice to buy back then are up 87%. (If you're an Investment Advisory subscriber, you can read the full write-up on ASML by my colleague Alan Gula right here.)
If you aren't already an Investment Advisory subscriber, find out how to become one – and gain instant access to our full portfolio of open recommendations with the specific advice for each position – right here.
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.