Quick Check on Beteiligungen im Baltikum AG (DE 0005204200)

Beteiligungen im Baltikum (BiB) AG is a Munich traded holding company, which invests into companies and real estates in Estonia, Latvia, Lithuania according to their purpose of company (Homepage).

Because of diversification purposes this company sounded interesting to me, additionally it might be a way to profit from GPD growth in the newer EU countries.

At the moment their 877.500 stocks are traded at 3,81 EUR, what makes up for a market capitalization of 3,34 Mio. EUR, a (very) small cap. Freefloat is close to 100%, no institutional shareholder, etc.

The latest NAV per share (30.06.2012) was at around 4,32 EUR, a discount of 13,5%. Trailing dividend yield is 5,5%.

When looking into the latest annual report for 2011 its stated that 55% of the "real total assets of the company" is invested in five companies. I suppose this real total assets are the financial assets.
Those five companies are the following:

	MaCap in Mio EUR	Dividend Yield	P/E	Country	Industry
TEO AB	511	8,8%	11,31	Litauen	Telecomm.
Tallink Grupp AS	475		6,91	Estland	Maritime Log
Gazprom ADR	189.360	5,4%	4	Russland	Gas/Oil
Lukoil ADR	52.520	7,1%	5,79	Russland	Oil
JSC MMC Norilsk Nickel ADR	22.970			Russland	Metals

Now the 55% of assets of the holding -including cash- are 1,87 Mio EUR, what is compared to the market capitalization of the companies they invest in not really much at all.

Despite the fact that 3 out of those 5 companies are Russian, one can doubt that the BiB AG has a lot of influence on its investments. Just by comparing their capital invested with the market capitalization of their investments. Since no influence on operation of the "holdings" is present i doubt the state purpose of the BiB AG.
As a active managed fund the expenses relative to income are (logically) much too high. The net margin 2011 was about 38,9%.
By comparison the UNIEM OSTEUROPA Fond has a TER of 1,87% or -put the other way- a "net margin" of (1-TER) 98,13%.
Consistently with my doubts the BiB AG is loosing substance since at least 2 years. However there is almost 1 Mio EUR cash left, so dividends can be handed out for at least 5 more years in the same height, as long as earnings from investments cover at least the expenses.

As a small individual investor i definitely would not want to buy shares here, and i cant stop to wonder who might have invested into this company.

However an interesting idea would be buying the company as whole, and liquidating it, since discount to NAV is a quite decent 13,5% and debt is almost non-existing. However for such an operation the discount would be too small, since you would have to buy all the shares on the market (moving price up). By then your margin of safety would be long gone.

BMW Preferred Shares: 2nd update; Spread shrinking

I update my database today and included the data from the 15.05.2012 until yesterday, 11.09.2012.
As one can clearly see, the spread between preferred and common stock is declining, two days ago even delcining below 40%, to the lowest level since 23.11.2011, so almost one year.

The price level of the stock was pretty much stagnating, declining a little bit over the period.
It seems like the spread increases, when the common stock breaks out and price rises, wheras the preferreds are lower too resond and dont increase all that much.
The leads me to the conclusion that momumentum is an important factor, probably also connected with the fact that the commons are representate in the DAX30, which often gets a lot of attention from day-traders and algo-trading. Since they adjust long/short positions very frequent sensitivity should be much higher than for the preffered.

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Here you can find the first two parts of the series on BMW/BMW3:
Part1 and Introduction
Part 2 - Follow Up

Analyst Recommendation and Stock Performance: Long-Term Study (Pt. 1)

Studies show that stock analysts often issue buy recommendations while sell recommendations are given in a lesser amount.
The significance of these buy/sell advices for an investor is disputed in literature (f.e. BJERRING/LAKONISHOK/VERMAELEN 1983). At least for downgrades some studies show abnormal negative returns for a short period of time (f.e. MARTINEZ 2010 for Brasil 1995-2003, Belcredi/Bozzi/Rigamonti 2003 for Italy 1998-2003). Interestingly Belcredi et. al show that abnormal returns are already present prior to the release of the analysts report.

Thinking that the idea of a basket of the worst rated stocks might be interesting, i decided to create my own long-term study on analyst recommendations.
I chose 12 of the worst/best rated stocks by different analysts and will compare the performance monthly.
The individual stocks wont get updated, f.e. if they receive a different recommendation (downgrade, etc.). This way the basket stays fixed and i can focus on the development of the stocks after the recommendations.

Now let me introduce my BEST-Basket:

• Andritz AG Inhaber-Aktien o.N.
• CeWe Color Holding AG Inhaber-Aktien o.N.
• Check Point Software Techs Ltd Registered Shares IS -,01
• Goldcorp Inc. Registered Shares Vtg o.N.
• Gran Tierra Energy Inc. Registered Shares DL -,001
• Las Vegas Sands Corp. Registered Shares DL -,001
• Lynas Corp. Ltd. Registered Shares o.N.
• Nuance Communications Inc. Registered Shares DL -,001
• QUALCOMM Inc. Registered Shares DL -,0001
• Schlumberger N.V. (Ltd.) New York Reg. Shares DL -,01
• TJX Companies Inc. Registered Shares DL 1
• Valéo S.A. Actions Port. EO 3

And my WORST-BASKET:

• Akzo Nobel N.V. Aandelen aan toonder EO 2
• centrotherm photovoltaics AG Inhaber-Aktien o.N.
• Commerzbank AG Inhaber-Aktien o.N.
• CRH PLC Registered Shares EO -,32
• Dendreon Corp. Registered Shares DL -,001
• First Solar Inc. Registered Shares DL -,001
• Gagfah S.A. Actions nom. EO 1,25
• Kon. KPN N.V. Aandelen aan toonder EO -,24
• Lilly & Co., Eli Registered Shares o.N.
• Novo-Nordisk AS Navne-Aktier B DK 1
• Randgold Resources Ltd. Reg. Shares (ADRs) DL -,05
• Sprint Nextel Corp. Reg. Shares FON Sr. 1 DL 2,-

The performance of the first month was the following:

• Total Best 12 Basket                                                367,52       0,8%     374,22
• Total Worst 12 Basket                                              328,45       6,6%     343,47
• DAX 30 Perf Index                                                  6.754,46    3,2%     6.970,79
• Dow Jones Industrial Average Index (Price) (USD)         12.878,88  1,6%     13.090,84

From 01.08.2012 until the 01.09.2012 the Worst 12 over performed the market as well as the Best 12 basket very very clearly. However this is due to the fact that the two photovoltaik stocks had each returns of around 30%, without them the performance would have been significantly lower at 3,5%, however still over market and best-basket!

Personally i find this interesting, however statistical not significance due to the very limited time period and samples.

I will continue to update the values each month and post them here, im very excited to see the future development.

Damodaran follow-up on Groupon, Facebook

Prof. Aswath Damodaran published recently two very interesting articles about Groupon/Facebook, containing among other things revaluation of his initial IPO pricing. As usually he published his spreadsheets, allowing others to follow and customize his assumptions.

His Groupon revaluation:
I go along with his view that Groupon is, despite the huge drop in share price, not a buying opportunity. They have problems in defending their business model, since entrance barriers are very low. To me it seems doubtful whether all the marketing expenses used for acquire merchants and customers will flow back in the end. Merchants seem to be disappointed by the return rate of the deal buyers, also Groupon seems to neglect quality more and more, esp. not checking if merchants are able to provide the quantity that might possible be sold.
Additionally it seems to me that all the daily deal topic was a big hyped and is now slowly getting cold. There is nothing new or exciting more in buying such Coupons, and most people are probably just bugged by all the mail advertising every day containing often a) uninteresting deal-items or b) discounts that in the end turn out to be quite small.
I go in line with  Damodaran conclusion, that Groupon is just about to be fair valued, i would even go further and say that its still overvalued. Also there is considerable momentum downward what might hold potential buyers back.

His Facebook revaluation:
 Damodaran finds Facebook to be undervalued.
I find it hard to judge that, since future development is so uncertain. Much depends on the question, whether a sound business model can be found. When this will be the case, it doesn't take much to say that the upside potential would be very big.
One might see the buying of FB stocks as a bet on this question, however its quite a risky one, since downside is still considerable. The assets FB has are his users and their data, pictures, etc. But if this assets cant be turned into money by FB, it seems unlikely that they will be of much worth to others.
This makes a bet quite risky.

Historical Successful/Failed German IPOs last 3/5years - IPO Discount

I analysed the last 5 years of IPOs in Germany and there performance.
I screen every initial public offering in a German market since 2007.
It does not look very good for the IPO buyers, especially on the long term (3 years plus). Traditionaly people speak of an IPO discount of 15-30% given on the intrisic value to motivate investors to buy into IPOs.
However this data shows that more the opposite is true, an IPO premium of at least 15%.
Now maybe the German market is just really bad for IPO-investors. As my data shows there were only a total of 14 IPOs above a 0% performance, only 5 of them from 2008 and 2007.
In my opinon that is a pretty devastating account.

The 3 latest  years (2012-2009)
3 yr Median:                      -12,37%
3 yr Arith. Middle:            -15,60%
3 yr Variance:                     29,35%
3 yr Nr. IPOs:                     31
This is year 4 and 5, or 2008 and 2007, which shows the worst performance, probably since it includes all the IPOs from boom year 2007 where a lot of junk went public:
4 yr - 5 yr Median:           -63,64%
4 yr - 5 yr Arith. Middle: -49,51%
4 yr - 5 yr Variance:          39,97%
4 yr - 5 yr Nr. IPOs:          49
Here the total time span of 5 years:
5 yr Median:                     -52,58%
5 yr Arith. Middle:           -36,37%
5 yr Variance:                    38,58%
5 yr Nr. IPOs:                    80

Free tools for stock screening/look-up/news

Here I want to list some of my favorite tools that i use frequently when assessing/monitoring one stock or a portfolio of stocks. All are free of charge:

Stock screener:
Yahoo Stock Screener: Over 150 different criteria you can combine when screening. Works best for US stocks.
Google Stock Screener: Features a lot of different criteria, maybe a bit less then Yahoo. More graphical interface. As well only US stocks.
For a how-to-screen see Damodarans excellent guide, who also recommends screening tools.

Quotes, (Financial-) Information, Ratios of specific company:
Yahoo Finance: Works quite well for a lot of companies, however most information is available for US stocks and larger European caps.
FT marketsdata: Works well for a lot of companies, very graphic interface. Gives you a lot of information, including institutional investors, background CEO/etc. Has data for 3 annual periods.
MSN Money: Only for stocks from most important markets: US/CAN/GER/FRA/SP/BE/IT/JAP/SW/NL/UK. Features besides the usual stuff a 10 year summary!

News aggregator:
Finanznachrichten.de: After creating an account you can define your personal watch list of stocks and news from 430 international publications. If wished you can also have an Email being send to you at given day and hour with all the relevant news. However most content is in German! Also shows real-time quotes.

Recipe for chewy cookies

This is a very simple, easy-to-do recipe for cookies (american style).

Yesterday my girlfriend gave me a cookie as a present. Since the cookie was very good, I decided the check for recipes.
After some search I found a simple one, and since the results were very convincing (yummy), I wanted to share it:

Time of preparation: 20 Min
Time of backing: ~10 Min

250g butter/margarine, warm
2 eggs
250g sugar
1 pack vanilla-sugar
tiny bit of salt

a)Take big bowl. Mix everything in given order and stir well.

b) Here comes the creative part: Add chocolate/cherries/nuts/whatever to a)

400g flour
1 pack backing powder

c) Mix both ingredients, then slowly blend with the other mass.

d) Use two spoons, form little balls onto a sheet. Dont forget that they will go up during backing, give them some space. Dough should be enough for at least two sheets!
Heat oven to 180°C, then back for around 10 Min, at least until they get brown on the sides.
Backing time depends on degree of wished chewiness, the longer, the more hard and less chewy.
Take out, place on grid to cool off!

e) Eat!

Update 1: Here is a picture of mine. As you can see some of the dough ran down on the sides of one sheet.