Another week, another 10 randomly selected Swiss stocks. This time two of them made it onto my watchlist.
21. Basilea AG
Basilea AG is a CHF 569 million biopharmaceutical company that was spun off from Roche in 2000. Unlike Actelion, for example, Basilea doesn’t seem to be a huge hit when looking at its share price:
According to their annual report, they have developed two drugs that will generate real revenue and allow them to nearly break even. One of them is an “antifungal” pill, which might be interesting, but I have no way of knowing a pill’s potential.
There is little growth in the pipeline right now and I cannot say whether or not the remaining pipeline is good. So i will “consist”.
22. Huber + Suhner AG
Huber + Suhner is a company with a market capitalization of CHF 1.43 billion that specializes in components for radar technology, fiber optic technology and a segment they call “low frequency”.
The business suffered from Covid 19 with a -11% drop in sales but appears to have good cost control as net income only decreased -16%.
The company has significant net cash and has had shares repurchased in the past. The share price has been volatile in the past, but a long-term upward trend has been evident since the early 2000s:
For 2021, the company anticipates single-digit growth and a return to the targeted EBIT margin corridor of 8-10%.
This is an unspectacular company that I would like to learn more about when time permits so I will be attracting them “Clock”.
23. Private Equity Holding AG
Private Equity Holding AG is a CHF 205 million company that invests in private equity and venture capital according to its name. According to the website, the NAV as of April 30, 2021 is given as CHF 133, which means that the share is currently trading at CHF 80 at a discount.
The chart looks very interesting: a long decline from 2017 and then a relatively rapid rise in the share price for a few months:
This appears to be due to a corresponding increase in the underlying NAV, as the datasheet shows:
Even so, investing in a publicly traded fund of funds PE vehicle doesn’t make much sense to me, so I will “consist”.
24. Novartis AG
Novartis is one of the largest global pharmaceutical companies with a market capitalization of CHF 200 billion. The company hasn’t grown much in the past few years and its share price hasn’t changed much in the past 5 years.
Since I don’t see how to get an “advantage” at such a large company, I just become “consist”.
25. Airesis AG
Airesis is a small CHF 47 million company operating in the sporting goods business, mainly under the Le Coq Sportive brand. The business was already in deficit in 2019, and it got worse in 2020. According to the annual report, the company has been struggling for some time:
In addition, the company has negative equity and significant debt. Since I don’t care about turnaround stories, I will “Consist”.
26. Lalique group
Lalique Group is a CHF 252 million market company active in the luxury segment, encompassing fragrances, interior design, whiskey and other items. The company went public in 2018 and little progress has been made in terms of its share price.
Sales were hit hard by Covid-19 but appear to have recovered in late early 2021. The sales are very European and except for the big guys like Richemont and LVMH, for example, they couldn’t compensate for them with sales in China.
I think the luxury business requires a certain size and that Lalique seems quite a long way from any kind of scale. Your goal of 10% EBIT margin is pretty low for a luxury retailer.
Compared to Richemont, I hardly see any reason to dig any deeper here “consist”.
27. Schindler Holding
Schindler is a company with a market capitalization of CHF 28 billion that is one of the world’s leading providers of elevators, escalators and moving walks. Elevators in particular have been a growth business for many years, which is reflected in the long-term share price:
They have a great chart on their website that has increased their market cap 100 times since 1981:
Profitability is very solid for a mechanical engineering company with EBIT margins in a range of 10-12%. In the past, ROEs were between 25-30% pa, which is remarkable for a company that is not at fault.
Unfortunately, all of these traits are reflected in a high rating of around 28x top win or ~ 30x 2021 win. A few years ago I would have been nervous about a P / E of 10, today my threshold is at a P / E of 20. Maybe I have to move my threshold further, but so far a P / E of 30 is clearly outside my comfort zone, even for a quality company like Schindler. That’s why I have to “consist”.
28. Medacta AG
Medacta is a medtech company with a market capitalization of CHF 2.5 billion that specializes in the development and manufacture of innovative orthopedic products and the development of minimally invasive surgical techniques for joint replacement, spinal surgery and sports medicine.
The company was floated on the stock exchange in 2019. The share price has experienced some volatility in the past few months and has risen above its IPO price in the past few months:
The company managed to keep sales almost stable in 2020 despite Covid with EBITDA margins of ~ 30% and an EBIT margin of 16%. With a trailing PER of 60, the stock is clearly expensive. Since this is still a fairly small company with a turnover of 300 million, the question clearly arises as to how much you can grow from here. The company plans to grow 10-15% in 2021.
70% of the shares are held by the founding Siccardi family, with many Siccardis on the board of directors and in the management team.
Although the stock looks very expensive, I’ll put it on top of mine “Clock” List to learn more about the company if time permits.
29. Aryzta AG
Aryzta is a company with a market capitalization of CHF 1.13 billion that produces frozen baked goods mainly for the B2B sector. The company has been struggling for some time, culminating in a major capital increase in 2018.
Business is still shrinking and the company is employing significant leverage (4xEBITDA). They appear to have sold much of their North American operations. In the long term, the company has managed to destroy a significant amount of capital over the past 10 years:
Since I don’t consider myself a good turnaround investor, I will “consist” on Aryzta.
30. Highlight Event & Entertainment AG
The highlight is a CHF 236 million market company that operates in the film / television business and sports media. The company owns, among other things, the German film studio Constantin Film and Sport1, a sports broadcaster. The company made a loss in 2020, and in general, the stock has performed very little over the past 20 years with the exception of pre-Covid 2020:
The company is known for complex relationships, including with the German listed company Highlight Communications AG. Since I’m not an expert on media stocks, I will “consist”.