Three more ideas from the Value Investing Seminar in Italy
In yesterday's e-mail, I shared three European stock ideas that my friend Christoph Hilfiker of LLB Asset Management in Liechtenstein pitched at the 21st edition of the Value Investing Seminar in Italy earlier this month.
Today, I'd like to share three additional ideas that other speakers presented...
1) Leevi-Eemeli Lötjönen of Finland, who works for UWC Endowment Management, pitched a Finnish company that's well-known around the world: elevator maker KONE Oyj, which trades in the U.S. with the ticker KNYJY. You can see his full presentation here.
He argues (correctly, in my opinion) that KONE is a very high-quality business with an attractive "razor and blades" economic model, in which KONE has profited for decades on the servicing and upgrading of elevators it sells. He also notes that the business benefits from urbanization, aging populations, and new elevator technology:
In 2020, KONE bid to buy Thyssenkrupp's elevator business, but a private-equity consortium acquired it instead. Leevi-Eemeli believes that the renamed TK Elevator is now a potential merger partner for KONE, which would unlock 30% value creation:
I think this is an interesting idea... But with KONE trading around 27 times this year's estimated earnings of $1.19 per share, it's not cheap enough to buy at this time in my opinion.
2) Christopher Fitzwilliam-Lay runs VinaCapital, a fund that invests only in Vietnam. He didn't pitch a particular stock but instead highlighted why he thinks the country "is the most compelling story in Asia." You can see his full presentation here.
I'm not sharing this because I think my readers should run out and invest in Vietnam, but it's always interesting to learn about another country or region. (I've also heard Vietnam is a wonderful place for a vacation – I've been to 86 countries, and the three I most want to visit next are Vietnam, Japan, and India.)
Vietnam today is much poorer than other Asian countries like Japan, Taiwan, and South Korea, but Christopher thinks it will follow the same trajectory:
He believes the closest analogy to Vietnam's growth story is China, as shown in these two slides:
He also believes it has a unique value proposition, including strong, pro-growth policies, increasing high-tech exports, and a population with favorable demographics:
And because of its low wages in U.S. dollar terms, Vietnam is also attractive for foreign companies – even with higher tariffs:
3) Lastly, Nicolas Van Broekhoven of Singapore-based Olija Holdings pitched a very weird little company: Hong Kong-based Queen's Road Capital Investment, which trades on the Toronto Stock Exchange under the ticker QRC. You can see his full presentation here.
QRC invests in various commodities, mostly uranium, copper, and gold:
It almost always invests via "convertibles," which are high-yielding debt instruments that can typically be converted into stock. Nicolas believes convertibles are a better way to invest in commodities versus the more common ownership of mining and exploration companies or royalty companies:
He highlights QRC's strong track record in revenue and net income since 2020, as well as its rising dividends and net asset value:
This stock is far outside my circle of competence... But I learned something new from this presentation, so thanks for sharing it, Nicolas!
4) Here are three pictures from the seminar:
Tomorrow, I'll share a few more ideas from other presenters... So stay tuned!
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.