2017 portfolio review

My performance for the year is +12.8%.

contributors that I sold are Cimpress, Xilam, Seritage. etc . 17 had its lot of mistakes/bad luck like LILAC, Criteo, Sears, liberty global.

My portfolio at year end 17, and going into 18 is quite strong, as the mistakes are very small now in proportion.


Odet+Bollore: The French holding company divested its Havas advertising shares to Vivendi which it owns a large minority stake and which it controls. Vivendi is now consolidated. Good developments at Vivendi with Universal Music setting on a long term path to growth, and great logistics assets in Africa also ready for the long term growth of the continent. The shares recovered from the oil crisis but remain very undervalued.

PayPal: PayPal had a great year in 2017 and it went from undervalued to richly valued. I trimmed my position to build new positions in Tech and will keep the rest as a long term holding. PayPal will grow for years to come and is also directly benefiting from rate rises on inflation.

Softbank; In 2017 its performance was flattish, but good operational developments with the vision fund and the Japan telco. Still very undervalued.

Exor; This holding company had a relatively flat performance while its investments grew very well. Therefore it is even more undervalued now. Some reinsurance costs with the hurricanes that affected the USA and the Caribbean. Positive on Exor and believe it its value creation for the long term.

Cosan Limited; Positive results for Cosan. Volatile share price because it is Brazilian. A very undervalued collection of assets in energy, agriculture and infrastructure in Brazil. Cosan management knows its undervalued and bought back 13% of the shares in a tender at the end of the year. It also bought back stakes in a JV with Shell. This is great value creation.

Altisource Portfolio Solutions ; The shares tanked following a weirdly politically motivated regulator attack against ocwen in 2017. This is getting settled rather quickly state by state but it is not over. Other than this, the company is growing its large margin financial and technological solutions well, as well as its business intelligence and marketplace start-ups. The share finished flat for the year and I am still at a loss on my purchases of several years ago. Next year should see more operational improvements for this very undervalued company.

Goodwin PLC; I am still at a loss on my purchases of this industrial growth company. It was affected by the crisis in Oil and Gas. It recovered well in 2017 and is still undervalued. I consider that the Oil and Gas investment market is currently at an unsustainable low in order to maintain or even grow production. Therefore the normalised earnings of Goodwin are at least double of now. On top of that, Goodwin is growing well in refractory, nuclear and emerging market infrastructure.


This bakery and fast food company remains very cheap while growing revenue at around 10% a year through capital reinvestment, and ebitda much faster with its operating leverage. With defensive products and expansion in mineral water, Poulaillon is promising.


Mtn group.

The south african telco giant is well placed in South Africa, Nigeria, Ghana and Iran, countries that will benefit from Oil demand and emerging middle class growth. It also uses its presence to launch digital services to its 200 millions and growing customers, and own stakes in leading local online marketplaces. On top of that, it is very cheap.



A growing attractions business, a challenged but profitable hotel business, and the strategy to capture more and more bookingd directly. All that for a good price, and tripadvisor will be a great investment for years. Currently unloved by the market.



Less exciting than Tripadvisor in terms of growth, it also is very cheap in terms of free cash flow, and has options with homeaway and emerging markets investments.


Koovs: A challenging year for the indian startup in the stock market, with demonetization and sale tax in india affecting the sales. However with a top management and long term focus, I have no doubt about the ability to deliver. One key risk; dillution at low prices.


Atlas Mara.

The stock was flat this year despite huge operational improvement and the entry of Fairfax Africa as a long term shareholder and board member. The emerging Bank is set for decades of growth in africa. And it sells for half the post Oil crisis book value.



A leading european OTA in the flights sector, has nearly doubled this year and remains cheap at less than 10 times Fcf.


Boustead Singapore:

Relatively positive performance for a Singapore based conglomerate with conservative management, a struggling energy branch, a lot of net cash on the balance sheet, and two nice industrial real estates and aerial mapping business. A free cash flow generative business that grows value in the long term.


Mahindra & Mahindra

Positive performance for a very well run indian conglomerate, with access to the giant emerging middle class in the country. It has an average car/trucks business, minority investments and start ups. It proved that with its experience and synergies it can turn a start up to a business line. It has a reasonable price.


Positive year for Valeant as the market realises that it is very cheap and here to stay. I have confidence In the future because Valeant main lines of business can now grow.


Judges scientific

Positive year for judges. While not extremely undervalued, it will continue to purchase specialty companies on the cheap with debt and therefore grow earnings.

Liberty Lilac

Terrible year with the hurricanes destroying infrastructure and the expensive cwc acquisition. I am not certain about its future as the company does not produce free cash flow. Some of the business is strong but the money will go to rebuild the lost infrastructure in Puerto Rico.


Very good year for Jd. JD is a juggernaut and should be valued as such, but its “only” worth 60b. This is for a company with similar gmv to alibaba, and excellent logistics that it can sell to third party, and huge possibilities to cross sell thanks to a massive user base.


Terrible year with no significant improvement in profitability and service revenue decreasing also. I am in it for the long term as some business lines are profitable but the new business has not yet showed much profitability. It could be a outperformer or just a leftover of past mistakes


Criteo had a bad year with apple blocking it on safari, affecting 22% of revenues. The share price tanked. It should keep developing the rest of the business well and therefore I view it as a share with strong potential.


Good year for Baidu, which remains fairly valued based on the search business alone. On top of that Baidu is developing AI very strongly and has interests in ctrip and iqiwi, not priced in currently.


BP in the family portfolio– I am positive on oil and gas, and bp will also benefit from the reduction of the infamous gulf oil spill. On top of that it remains undervalued compared to the oil majors and pays a juicy dividend.



Blog update

The blog has been quiet lately. I simply quit my job, I am applying for work abroad, and working on e-commerce + offline sales activity. Actually, there was a problem with the wordpress ecommerce plugins integration, I read online that it could be due to my multisite setup, so I had to move this blog to another account, and this is why I have added a S to the URL, but the source problem is still here..

I started this blog hoping to leave it as a trace to maybe branch in that area in the future, but I now realise that I am not made to work in it. Most funds are too active and always look for the next idea. I did this for a long time before finding my style. My style is more to get to know some companies and keep them, its more appropriate for someone with other things to do in life. I don’t mind getting new ideas but to add to previous positions. I want this blog to be a testimony on investing as a long term effort.


On the shares side, I was active again-

Disappointed by Liberty Global lack of results despite increased investment, I decided to sell at a small loss to reallocate to cheaper holdings or with better  real organic growth:


MTN group, Softbank, Poulaillon, Criteo, Valeant (before the Q2 run up).

Opened position: Boustead Singapore: see the good write up on valueinvestorsclub.com

I believe that it is undervalued, well managed and conservative, while exposed to a rebound in oil and gas.

I also Sold Fiat when I saw that in Europe there are more news about them cheating on diesel emissions. Although it is still quite cheap, I do not need this direct exposure in my portfolio.

reinforced: I have reinforced Exor

Reopened position:  Seritage Growth Properties cheaper than when I sold it.

I will try to be less active now. The good part about this activity is that it did not require me to analyse new companies and was not time consuming.

Here is my updated portfolio. for H1 the performance is not great. Most undervalued companies did not move up while companies “in transformation” like Sears, Altisource, Koovs, suffered. Oil and Gas holdings also suffered. I am still very positive about all of them for the long term so I do not worry. Bollore and PayPal had good increases in prices. PayPal is now quite expensive, and I looked at trimming, but I am here for the long term and PayPal has many levers it did not even touch yet. I have looked at Tripadvisor and might initiate a position in a few months but I might also leave it in the too hard pile. I have looked at CBL and associates and it looks interesting.











Portfolio update Q1 – 2017


Just a quick update.

I sold Xilam (6 or so bagger). It was a great success, probably more to come but I wanted to secure the profit and move some safer holdings. I sold Aufeminin to focus on more secure holdings. I changed as an investor and want to focus more on holdings that I can keep passively for the long term without worrying about each result or corporate development. with Aufeminin and Xilam you have to follow it closely.


Bought several good companies for the long term.

Baidu: Undervalued Chinese google investing heavily in AI and local food ordering. At a 50 MB USD it is I believe a steal and its AI efforts will transform many industries. It has a strong core search business. It is a small position due to the fact that it is for now a Chinese pure play and I am aware of Chinese macro worries. I believe that in the long term the Chinese economy will do well. A good write up is here; snowballvalue


Mtn group; Leading African and Middle eastern telco with currently a depressed currency basket plus depressed share price due to a Nigeria fine. Is also investing heavily in ecommerce and mobile money with MTN money, Middle east internet group and Africa Internet group. Solid dividend player, it is currently a steal at a normalised PE of less than 10.

Poulaillon; Fast growing french micro cap bakery and mineral water company, family owned and really cheap on a P/S basis (less than 1) and with growing ebitda, and with recent investments in a new mineral water bottling plant that did not have the time to produce results yet.

Mahindra & Mahindra; Reasonably priced indian conglomerate with best in class management and I believe that the rupee is undervalued. Holdings in various industries. A long term holding. I found some amazing value in other indian conglomerates but you need to be indian to have access to the indian market. For M&M I bought a GDR – Global depositary receipt.

Reinforced Softbank which is now a strong position in the portfolio.

Finally, we got some positive developments at Ocwen which will help Altisource Portfolio Solutions to recover. Atlas Mara also provided good results and in my opinion is now on the path to excellent results. Sears saw some big insider buying. A lot of my thesis are starting to prove right.



| Odet+Bollore || 11.04%
| Softbank || 10.52%
| my employer || 10.12%
| Cosan Limited || 6.75%
| Exor SPA || 6.70%
| Altisource P.S || 6.36%
| Liberty Global || 6.06%
| Sears || 5.43%
| Goodwin PLC || 4.46%
| Fiat Chrysler || 4.30%
| Poulaillon || 3.78%
| Expedia || 3.56%
| Criteo || 3.40%
| Koovs || 2.76%
| Liberty Lilac || 2.72%
| Mahindra & Mahindra || 2.44%
| MTN || 2.37%
| Baidu || 2.35%
| Judges Scientific || 1.82%
| Atlas Mara || 1.70%
| Valeant Pharma || 1.37%


Holding series 10 – Liberty Lilac

This is somewhat of a guru holding. I was holding Liberty Global when this was spun off, and I bought more of Lilac. With the hindsight I succumbed to what we would call social media frenzy over Liberty Lilac. Seeing many experienced investors on this name convinced me, as at the time I was not that experienced. The share price since tanked. However I think that it can now be attractive for long term returns.

Liberty Lilac is probably not a new name for my readers. It is a cable and telecommunications consolidator in Latin America and the Caribbeans. It is a tracking stock of Liberty Global. Its main assets are Cable in Chile and Puerto Rico, and sub sea cables and telecommunication services in The Caribbeans since the acquisition of CWC.

The company is combining these assets to find synergies in terms of services offered and costs. This is the classic liberty playbook, use debt or stock to buy more assets, find synergies, then buy more assets, buy back shares.

Cable equipment rates in the region are low and should increase in the long term. I do not think that the Caribbean region has fantastic growth prospects due to the Geography and weak demographics. Chile has great growth prospects. It would be interesting to see if Lilac would acquire a cable company in other large south american countries similar to Chile.

Lilac currently trades cheaply. Its market cap is $3.9 B usd. The operating cash flow is $1.1 B usd if I take the proportional non controlling interests. Total EV is higher due to the debt ($8.9 B usd – http://seekingalpha.com/article/4002365-much-debt-liberty-lilac-really). EV/Ebitda is then 7.8, using Lilac self defined Operating Cash flow (http://www.libertyglobal.com/pdf/presentations/Liberty-Global-Q3-2016-Investor-Call-Presentation-FINAL.pdf).

The value creation from now on is going to be clear. With strong EBITDA or OCW generation, some growth estimated at 7-9%, Liberty Lilac could reduce the enterprise value to Ebitda each year either by repurchasing shares, repaying debt, or growing revenue.

It is still a company hard to model due to the lack of clarity on Capex plan, and growth Capex required to reach this OCF growth. Currently the Capex is expected at 20% of revenues or $720 m USD annualy. This would leave us with an annual cash flow to reduce the EV of around $400 m. That is a 10% market cap reduction if all directed to the repurchases. I do not think that the funds will go to reduce debt (Liberty method) unless to prepare for another acquisition.

So to summarize, we have OCF growth of lets say 7% to be conservative, and market cap reduction of 10%. We also have a possible re-rating to an EV/EBIDTA of 10 as emerging markets go back into favour, which I think should happen since this is where the growth will be in the long term (See emerging markets in percentage of global GDP in the past 30 years for example), and a possible currency re-rating. If the stock re-rates higher, the capital allocation could go to more debt reduction. On top of that, we have a focused and experienced management team, and future synergies or acquisitions.

When I first bough it at around 35$ a share, CWC was not part of the company and it was rated higher. The country profile was better as Chile was a high percentage of revenues. Puerto Rico has also high wages compared to most of South America due to the USD.

But from today’s price point we should expect high value generation simply from existing cash flows and synergies.

The risks are;

-Weak macro in small countries where CWC operates.

-Local competition, its not possible to predict or clearly understand each competitive landscape as a shareholder unless you spend a lot of time following the company.

-Lack of disclosure clarity due to the tracking stock structure and generally messy reporting by Liberty Global.






Year 2016 summary and last minute shuffling

The year ended in this financial world and the lessons were immense. The learnings from Brexit to Oil to trump to some losses all point in the same direction; ignore the noise, focus on the underlying business.

I returned 14.5%. This is after -4% last year. This is quite average especially if you look that most of that return came from one position alone. So this year left a sour taste despite the good performance. Xilam was a 5 bagger and is now my largest position. I sold some, but the main thing is I was right, it was cheap and still is. Here is a link to my analysis of Xilam. I also got killed on a bad position in Concordia and I would not exclude it from my returns.

The family portfolio returned 31%, with speculative positions in WPX energy and Mittal.


my purchase strategy will focus on what I know better. I am not comfortable with drug and industrial companies. Drug companies because I do not know at what price they can sell the drugs and when do competitors will enter a drug market. These companies have high gross and net margins but I feel that they are often value traps as they have no durable moat and need to reinvest their free cash flow not only to grow but to compensate for the loss of earning power that their current drug portfolio has. Industrial companies because you need to know where you are in a cycle with an extreme precision to perform. We saw that with Oil and Gas, Automobile suppliers. A diversified industrial conglomerate is still a possibility, but not a specialized industrial company.

I find that currently the obvious generational opportunities are emerging markets with undeserved populations in terms of equipment rates, and online services where the runway is huge. They also tend to be areas where I am comfortable and have some related work and life experience. I got caught in the fallacy that a portfolio has to have a bit of each sectors. I totally disagree with the notion now because some sectors are hard.


Some learnings;

-I should probably stay out of future heavily hated controversial companies since it did not work well, or wait until a turnaround has materialised.

-Its apparently more ethical to sell dangerous addictive substances (Soda) to third world country kids whose parents do not have an health an nutrition education, than to sell overpriced products that save lives, while no one is excluded from treatment. Or Maybe it is because your name is Warren Buffet. BTW I own and use both so I am totally neutral.

-It is better to diversify because you never know what might happen

-My goal of doing less was not achieved.

-Accept when you are wrong and move on, if facts change. This is my learning of 2016. I knew it already because I read it before but to actually do it is something else.

Portfolio clean up en of year

SELL CONCORDIA HEALTHCARE; This position was sold at a large loss when I saw a judgement from the UK competition authority it made me realize that the UK will probably tank this company. I was unlucky on this one but also stubborn to not exit quickly when facts changed (UK generic price controls). The short thesis being wrong also confused me. When I say wrong, is that the vocal people did not mention the regulatory problems but were rather stating some made up facts or not understanding GAAP earnings. Seeing that their thesis were wrong, I was reinforced in my long thesis. They were just lucky to be short for the wrong reasons. I am sure that other smart short and long investors exited knowing the future issues in the UK business.

-SELL SERITAGE; I felt that it was fairly valued and in Euros the gain was large. Nothing wrong with this for long term holders, I just got frustrated at the slow pace of renovations compared to the size of the real estate portfolio. I would rather have a company that can show the same growth rate without capex.

-SELL NATIONAL OILWELL VARCO; Due to the overall gains in 2015 I exited this position, for a swap to another position affected by oil prices but cheaper and with a clearer growth runway. It is still potentially undervalued but sometimes it is good to start fresh.

-BUY CRITEO ; Rapidly growing French ad tech company. Market leader, Net cash positive, and aggregates more and more services on top of the main re targeting business. Also very focused on R&D. This industry is controversial but I believe in its integrity, knowing the culture of excellence of the French scientific schools where the engineers and mathematicians come from.

-BUY KOOVS PLC; Indian startup in fashion e-commerce.  Burns cash. Its a bet as the chairman and management are all seasoned Asos executives. There is a strong investor base ready to support its growth such as media group Times of India and Waheed Alli. Waheed Alli was chairman of Asos for over ten years, bringing it to the success it was. Fashion e-commerce is a profitable subset of e-commerce due to quality differentiation. Indian e-commerce will boom. It is my first pure growth investment. It is from Masa Son (CEO of Softbank) influence that led me to do it.

-BUY ATLAS MARA; African Banking venture founded  by Bob Diamond and Ashish Thakhar, who is a serial African entrepreneur and founder of the Mara group. This bank is selling for under 0.5 times tangible book value, because investors are scared of Africa at the moment when it is the most exciting opportunity for Banking. Small position for now.

-These three investments are ones where I believe in the long term story. I also REINFORCED SOFTBANK


Most of my stocks did have a bad 2016, so I am quite optimistic for 2017. Sears and Valeant got killed but I definitely see the value there. I have many emerging market stocks, long term stories, or hated stocks, so I do not suffer from the stock market overvaluation .


Portfolio, from biggest to smallest position,

-Xilam Animation

-My employer (IT sector)

-Bolloré and Financière de l’odet


-Altisource Portfolio Solutions

-Cosan Limited

-Exor SPA

-Sears Holdings

-Liberty Global

-Goodwin PLC

-Fiat Chrysler



-Au Feminin

-Koovs PLC

-Liberty LILAC


-Judges Scientific

-Atlas Mara


I intend to resume the holding series with Liberty Lilac next.


Updated watchlist and a lesson in humility

I have updated the watchlist page. And it consisted mostly of removing companies. I did this year an investment in Valeant and another one in Concordia Healthcare. It turned out that my analysis were mostly wrong, simply because the numbers of these companies kept deteriorating. My investments may eventually turn well, due to the large margin of safety created by the low entry multiples, as well as the deleveraging story, but it lead me to understand one thing; That I am no business analyst in all types of businesses. It is very hard, even for professional investors (Ackmann, Sequoia, Donville Kent), to understand the dynamic at play in specialised industries. And it leads to many headaches.


Hey, even in my own company where I work and listen to all the conference calls, internal and external, use the products, everyday for five years, I do not have a full grasp of how is the market, and how the margins will be in the long term. And when I read outside analysts, most have some dynamics or facts wrong. Not all, and I was sometimes impressed by some analysis. But none did think long terms in terms of products and margins.

And in terms of performance, in 2016, what I see is that companies somewhat related to my area of knowledge did well, as well as cheap holding companies (where we have a dedicated investor working for us), rather than beaten up shorted stories. This is definitely a lesson to learn, although the consensus may change quickly for some shorted stories in the Energy and Financial services sector.

But as a result, I decided to take Endo PLC, and BB Biotech out of the watchlist (I do not know the sector well enough), Indian companies, (I do not understand this country), and some Industrial holdings too (not my cup of tea, Already have some in my portfolio).

I do not have anything to add to the watchlist apart from Liberty Media who makes a return thanks to the focus on Formula one. I have analysed the indian group Godrej Industries which is interesting, but too complicated for me due to negative free cash flow and structure.

In terms of Portfolio updates, I got out of Liberty Broadband to enter Softbank, not that I do not like Liberty Broadband, but rather that I like the Softbank discounted assets and leadership, and because I am a Euro investor looking for a global balanced portfolio. I reduced some of my Xilam position after a large run up to enter Expedia.

Holding series 8 – Exor SPA

This will be a short update.. because the long thesis is well presented by someone else, I will not do better; Exor SPA is an attempt to build a new Berkshire Hathaway in Italy. And it will succeed. It will be a bit different, but I am very bullish.

See the video by Greenwood investors – a fund that I strongly recommend to follow.

EXOR Video: Lollapalooza

See also my quick post on Fiat Chrysler. FCAU