Notes to myself: EssilorLuxottica

I have written about the EssilorLuxottica merger here.

The transaction would entail a strategic combination of Essilor’s and Luxottica’s businesses consisting of (i) Delfin contributing its entire stake in Luxottica (approx. 62%) to Essilor in return for newly-issued Essilor shares to be approved by the Essilor shareholders meeting, on the basis of the Exchange Ratio of 0.461 Essilor shares for 1 Luxottica share, and (ii) Essilor subsequently making a mandatory public exchange offer, in accordance with the provisions of Italian Law, to acquire all of the remaining issued and outstanding shares of Luxottica pursuant to the same Exchange Ratio and with a view to delist Luxottica’s shares.

 

EssilorLuxottica_chart.PNG

This is a Chart of bought companies from 16.01.2017 till today. Luxottica have performed poorer.

I have found no news on the deal “not going through”.

 

Some Math:

Essilor is at 108,226 Euro today

Luxottia is at 49,30  Euro today

“on the basis of the Exchange Ratio of 0.461 Essilor shares for 1 Luxottica share”

108,226 * 0.461 = 49.892 Euro …

Bottom Line:

Buy Luxottia at 49,30€ … get value of 49,89€ … 1,1% difference = minimal

 

Some Quotes from Warren Buffett’s 2016 Berkshire Hathaway Annual Report

Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. – Warren Buffett, 2016 annual report

BERKSHIRE HATHAWAY INC.

Some notes/Quotes I made during reading the annual report:

 

on Berkshires intrinsic value
By our estimate, a 120%-of-book price is a significant discount to Berkshire’s intrinsic value, a spread that is appropriate because calculations of intrinsic value can’t be precise.
 on insurance business
For example, if the insurance industry should experience a $250 billion loss from some mega-catastrophe – a loss about triple anything it has ever experienced – Berkshire as a whole would likely record a large profit for the year. Our many streams of non-insurance earnings would see to that. Additionally, we would remain awash in cash and be eager to write business in an insurance market that might well be in disarray. Meanwhile, other major insurers and reinsurers would be swimming in red ink, if not facing insolvency.
GEICO’s growth accelerated dramatically during the second half of 2016. Loss costs throughout the auto-insurance industry had been increasing at an unexpected pace and some competitors lost their enthusiasm for taking on new customers. GEICO’s reaction to the profit squeeze, however, was to accelerate its new-business efforts. We like to make hay while the sun sets, knowing that it will surely rise again.
on BHSI
We expected significant losses in the early years while Peter built the personnel and infrastructure needed for a world-wide operation. Instead, he and his crew delivered significant underwriting profits throughout the start-up period. BHSI’s volume increased 40% in 2016, reaching $1.3 billion
on BNSF
Last year, for example, in a disappointing year for railroads, BNSF’s interest
coverage was more than 6:1.
To supply a very crude measure, however, our revenue per ton-mile was 3¢ last year, while shipping costs for customers of the other four major U.S.-based railroads ranged from 4¢ to 5¢.
on BH Energy
Low prices are a powerful way to keep these constituencies happy. In Iowa, BHE’s average retail rate is 7.1¢ per KWH. Alliant, the other major electric utility in the state, averages 9.9¢.
on “Forever-Stocks”
Sometimes the comments of shareholders or media imply that we will own certain stocks “forever.” It is true that we own some stocks that I have no intention of selling for as far as the eye can see (and we’re talking 20/20 vision). But we have made no commitment that Berkshire will hold any of its marketable securities forever.
on dividends vs. capital gains
Berkshire, like most corporations, nets considerably more from a dollar of dividends than it reaps from a dollar of capital gains.
on Jack Bogle
He is a hero … to me.
on Berkshires annual meeting
The annual meeting falls on May 6th and will again be webcast by Yahoo, whose web address is https://finance.yahoo.com/brklivestream. The webcast will go live at 9 a.m. Central Daylight Time.

Update

I am back from my vacation, some updates and notes:

Saleorder I installed for BT Group striked and I sold my Position with an acceptable profit (annualized). I am still not sure if I want to do things like that in the future considering the risk/reward profile of that investment speculation.

 

Foot Looker released some good Q4 numbers. The stock now sales for ~15.5 earnings. Btw. I like their reporting.

The Company’s net income increased to $664 million in 2016, or $ 4.91 per share, compared to net income of $541million, or $3.84 per share in 2015.
Seems like Hormel Foods and L Brands disappointed investors. Both stocks lost recently. I am planing to lock at them.
French Vivendi goes down and down slowly… maybe I will look at it again. (Bollore stayed more or less flat)

 

 

To Do list:

  • Read Warren Buffett’s Annual Letter
  • looking at Hormel Foods again
  • looking at Danaher
  • looking at Vivendi
  • looking at L Brands (Victorias Secret)

 

Links: A lot of Q4 letters, Bogle, and Warren Buffett Movie

A great List of Q4 Letters and Reports at reddit (link)

Including: RV Capital, Fairholme, Third Point, Tweedy Browne, Sequoia, Bill Gross, … and many more!

(also see my quality-sources section for more stuff like that)

If you are searching for Baupost/Seth Klarman try this link

The Brooklyn Investor, always worth a read: Bogle Book, Indexing etc.

So Why Not Buy Apple.?! form Wexboy

Are UK Equities overvalued from Mitchell Fraser-Jones at woodfordfunds

The UK stock market’s current PE of about 15x this year’s anticipated earnings, implies a real annualised total return of approximately 8% over the next 10 years, based on the historic trend shown on the chart. This isn’t bad, in our view, especially when compared to the likely returns available from other asset classes.

If you always wanted to see how Warren Buffett orders sausage mc muffin at McDrive on the way to work – today is your day!

If link is broken try this search

Update: Sapec, Actelion

MMI from valueandopportunity came up with this two special situations which leed to this actions:

Bought 2,3% Position of Actelion on Friday

Bought 2,5,% Position of Sapec SA Today

 

Sapec SA

(link)

Disclaimer: This is not investment advice. The stock mentioned is relatively illiquid and potentially risky. Please do your own research !!!!

Seems like the deal is finished (link)

Actelion

(link)

I think the Newco is also on a standalone basis very interesting because 1.) the current CEO stays with them, and 2.) the imbalance between the Actelion (280$) and Newco (~10$) price could create a lot of “forced” sales on the first days of trading.

 

Under Armour

Since it lost ~20% on one Trading day and has a “brand” name I have looked at UA but for me it was still very expensive and the move in fashion sounds very risky for me – no buy from me here.

 

Disclosure: Long Sapec & Actelion

Disclaimer

The content contained on this site represents only the opinions of its author(s). I may hold a position in securities mentioned on this site. In no way should anything on this website be considered investment advice and should never be relied on in making an investment decision. As always please do your own research!

Links: KraftHeinz, Buffett

KraftHeinz and 3G (link)

Unlike other PE firms, which have an exit in mind from the day they buy a company, Lemann and partners have stuck with their beer venture for 28 years and counting.

 

Bloomberg: Buffett Bought $12 Billion of Stock From Election Through Friday (link)

 

Morningstar: Top 10 Investment Trust in November Link

 

The healthcare opportunity” from Mitchell Fraser-Jones at Woodford. (link) Woodford is one of my Quality Sources

As our regular readers will have gathered, we have strong conviction in the long-term investment case for the healthcare industry.

Note: Est. reading: 13 min read … how fast are you? 😉

Note2: The interactive infographics are fun

Update: Whitbread, Britvic, Paypal

Whitbread which I mentioned here recently came up with some good numbers (link)

 

Britvic had a Strong start to the year and is confident of meeting market expectations (link)

GB carbonates continued its outperformance of the market with a revenue increase of 5.5%.

France revenue increased 6.3% with the branded portfolio in strong growth

Ireland revenue increased 6.4%, with both Counterpoint and our branded business performing well.

The International division reported a 19.8% increase in revenue, compared to a 13.8% decline in Q1 last year and was largely as a result of a 14.1% increase in volume.

 

Paypal reports 21% FX-Neutral YoY revenue Growth and expects 14-16% revenue increase in 2017 (link)

 

Walgreens reduced its offer for RiteAid “based on the number of required store divestitures” (link)

will be a maximum of $7.00 per share and a minimum of $6.50 per share

Note: the RiteAid stock is now at 5,62 USD