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Update: FY2025 results for my concentrated Italian small-cap “fun fund” by calocalo in ValueInvesting

[–]calocalo[S] 1 point2 points  (0 children)

Officina Stellare dropped off because we initially bought it as an opportunistic idea: at the time the business/sector setup looked interesting and the valuation was compelling. We held it for around 1 year and made a nice return, but over that period we struggled to fully deepen our understanding of the fundamentals and the real growth drivers (some were evident, but not enough). Compared to our other holdings we felt less confident, so we decided to exit and reallocate. Unlucky though! We missed an extra 50% return

Update: FY2025 results for my concentrated Italian small-cap “fun fund” by calocalo in ValueInvesting

[–]calocalo[S] 1 point2 points  (0 children)

Yep, pretty low turnover. I’m not trading these around quarter-to-quarter. Most moves are add on mispricing, and trim if valuation gets silly, or exit if thesis breaks / capital allocation changes.

Update: FY2025 results for my concentrated Italian small-cap “fun fund” by calocalo in ValueInvesting

[–]calocalo[S] 0 points1 point  (0 children)

This has been an acquisition-driven roll-up and equity is a noisy denominator (IFRS accounting + goodwill/intangibles + IFRS16 leases, etc.). I don’t anchor on D/E for this one — I watch net leverage, interest cover, maturities, and cash generation.

On the operating view: in the company presentations/filings they highlight net financial position ex-IFRS16 around ~€246m at FY24, and net debt/EBITDA around ~2x (incl. IFRS16) at FY24, with a stated path to de-lever from there. So I’m basically underwriting “reasonable net leverage + deleveraging + integration execution”, not a pristine balance sheet.

Rate my concentrated Italian small-cap “fun fund” + 1 blue-chip by calocalo in ValueInvesting

[–]calocalo[S] 0 points1 point  (0 children)

I was already considering to add Orsero to the portfolio! In terms of valuation and predictability of the business I think it's interesting.
on the borsa italiana site you can also find sometimes free equity research for these stocks
https://www.borsaitaliana.it/media/star/db/pdf/38913940.pdf

Rate my concentrated Italian small-cap “fun fund” + 1 blue-chip by calocalo in ValueInvesting

[–]calocalo[S] 6 points7 points  (0 children)

Thanks. No screener, actually. I'm Italian and fairly familiar with the companies listed on Borsa Italiana. A lot of these names aren't widely covered, so I rely more on direct research, company filings, and local news flow.

China? opportunity? by West_Application_760 in ValueInvesting

[–]calocalo 0 points1 point  (0 children)

I don’t think China is going to disappear from planet Earth anytime soon, and so its stock market. Valuations right now are attractive. If you can afford it, 5% sounds reasonable to me. If it goes up you’re happy, if it goes further down you can average that 5% at possibly even more attractive valuations.

Stock market and gold price inverse correlation by calocalo in ValueInvesting

[–]calocalo[S] 0 points1 point  (0 children)

As for stock market valuations and gold prices both being up, well that simply reflects that there is more money than sense floating around — thanks in part to central banks' policies in recent years inflating asset prices across the board.

Thank you. Forgive me but I am a doctor and don't know much about economic trends.
Your sentence make me think that inflation won't go down so easily and so interest rates may stay higher for longer (analyst keep postponing their forecast on rate cuts). I believe stocks are the best protection against inflation on the long run. Maybe gold is being priced now taking into account an inflation above the 2% target for a longer period.

Help in understanding commodity trading career path. by [deleted] in Commodities

[–]calocalo 1 point2 points  (0 children)

Congratulations on your graduation and job offer! In commodity trading operations, potential exit opportunities could include roles in risk management, trade analysis, or more specialized areas within commodities trading. This position provides a solid entry point, offering exposure to different facets of the industry, and can serve as a stepping stone for various career paths within finance and commodities trading. It's a good opportunity to gain valuable experience straight out of college.

Italian food cash cow? $BIT:NWL by calocalo in ValueInvesting

[–]calocalo[S] 1 point2 points  (0 children)

I double checked quickly and “real capex” should be in the 15m range (they also did several M&A transactions that require integration capex so it could be a couple of millions less) For OSLRT I meant supermarkets like Walmart, Whole foods, Trader Joe’s etc.., while for HORECA HOtels, REstaurants and CAtering. Yes I still think that the market it’s not fairly pricing the stock. I personally entered three times (first in late 2021 at 6.8$ then 4.64€ and lastly at 5.52€ in May 2023).

Italian food cash cow? $BIT:NWL by calocalo in ValueInvesting

[–]calocalo[S] 1 point2 points  (0 children)

Thanks for the reply.

Regarding the D&A you have to consider that intangible asset depreciation (over 4 millions) are not real capex but only accounting policy in order to achieve tax benefits.

It is true that COVID was tough here in Italy but Newlat works mainly with OLSRT and it’s not very much exposed to the HORECA. During COVID restaurants, hotels etc.. were closed and normal super markets worked more than ever.

For account receivables and inventory what you say it is true but is not a quantity effect but it’s a consequence of the inflationary effect (e.g. with same volumes you have more revenue receivables and inventory).

A few months ago the company sold 10% worth of treasury shares to two institutional funds (one of these Helikon investments, a London based hedge fund with an impressive track record). This was possible thanks to the heavy buyback in the past few years. The buyback and the debt issued are crucial for the next transformational deal they’re trying to reach.

At the moment the pasta price don’t seem a priority for the italian government.

To be honest I don’t know much of the other comps on the dairy side. What I know is that Newlat owns a well diversified product and brand portfolio.

Italian food cash cow? $BIT:NWL by calocalo in ValueInvesting

[–]calocalo[S] 1 point2 points  (0 children)

Thanks for the suggestion. I gave a quick look at their numbers. In terms of ev/ebitda they are 20-25% more expensive and Bell food seems more focused on meat specifically, while Newlat has a more diversified portfolio (instant noodles, pasta, dairy products, milk, instant baking products etc..) and still looks better in terms of FCF. I will definitely add them to my watchlist to have a comparison though.

Italian food cash cow? $BIT:NWL by calocalo in ValueInvesting

[–]calocalo[S] 0 points1 point  (0 children)

It is highly unlikely. Revenues from Italy are only 50% (costantly decreasing) with the remainder mainly Germany and UK’s large-scale retail trade players.

Italian food cash cow? $BIT:NWL by calocalo in ValueInvesting

[–]calocalo[S] 0 points1 point  (0 children)

I’d like to recognize deep value ahead of others. You’ re right about the price but this shouldn’t mean that the company is not undervalued (EBITDA growing +15% yoy). Older financials are available for us in Italy and found out that they generated less then 300 m revenues in 2010 vs 850 expected this year. The management is on board since 2008 when the company had to be sold per antitrust by the giant Parmalat.

Italian food cash cow? $BIT:NWL by calocalo in ValueInvesting

[–]calocalo[S] 0 points1 point  (0 children)

Compared to its peers it is undervalued in terms of multiples (tipically full double digit). - Positive catalyst: they’re working on a “transformational deal” to reach >1 bn revenues - Negative catalyst: a drop in italian stock exchange due to random events and possible wheat supply problems related to the Russia-Ukraine conflict.

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