#37 Investment Journal - Ep.2
Portfolio optimization
I spent a fantastic week vacationing on the beautiful Spanish island of Mallorca. It was the perfect blend of pure relaxation and exploring new places. Now that I'm back home in Frankfurt, Germany, I'm eager to continue my journey on Substack. Thank you for your support, and if you enjoy or find my content helpful, please subscribe and leave a “thumps up”!
In my Investment Journal series, I discuss my personal portfolio and share valuable insights. In Episode 1, I revealed my largest positions. You can find it here:
Recent transactions I made
I am primarily a buy-and-hold investor. Ideally, I hope to never sell a stock once I buy it, but realistically, that's not always possible. While I don't make a lot of sales, I am currently actively working on optimizing my portfolio. This involves trimming or completely selling certain positions to reallocate funds into better opportunities or new investments, particularly in interesting small-cap stocks. Additionally, my portfolio is currently too diversified, with over 80 stocks. I aim to concentrate it more effectively.
I'll begin by sharing some of my recent sales since April. The % number next to the name represents the profit or loss I made.
Monster Beverage +13.5%
Monster, the US-based energy drink company, has had an incredible run in the past. I entered this position quite late and with only a small amount, so it didn't have a significant impact on my portfolio.
Walgreens Boots Alliance -46.8%
A few months ago, I wrote an article about Walgreens, and I still believe this company is undervalued. I anticipate that its intrinsic value will eventually be recognized. However, I needed cash for other investments with better prospects, so I decided to exit the stock for now. This doesn't mean I won't return to it; I’m keeping an eye on Walgreens for future opportunities.
Kone +15.8%
Kone is one of my favorite businesses. In my view, this Finnish-based elevator company is of high quality, with a strong moat built around its extensive installed asset base, supported by long-term contracts for maintenance and repairs. However, its current growth prospects are limited, and the stock reached my estimated fair value when I decided to sell. Additionally, my intention to reallocate funds to better opportunities was a significant factor in my decision.
3M -30.2%
The development at 3M has been very disappointing. The company's lawsuit issues and weak operational performance have led to a disastrous stock price decline, prompting me to exit the stock. Although I believe the stock may be undervalued, it could also be a value trap. Notably, the company has experienced nine consecutive quarters of GAAP revenue decline.
I also sold all of my positions in Johnson & Johnson and Royal Bank of Canada. As I said, the simple reason is that I was moving money to better opportunities.
And now a look at my buys:
SoFi Technologies
I initiated a small position in SoFi Technologies. The company appears to have reached profitability and is experiencing rapid growth. Although it represents a small portion of my portfolio, the investment case is very promising, and I didn't want to miss out on this opportunity.
Kri-Kri Milk Industry
I wrote an in-depth analysis of Kri-Kri Milk Industry, highlighting my view that this great business is significantly undervalued. This Greek small-cap has become one of my largest positions, but I understand that patience will be essential.
If you missed the article, check it out here!
Jumbo S.A.
Jumbo S.A. is a Greek retail company that operates a chain of stores offering a wide variety of products, including toys, seasonal items, home goods, stationery, and more. Founded in 1986, Jumbo has grown to become one of the largest and most well-known retailers in Greece, with a significant presence in several other countries, including Cyprus, Bulgaria, Romania, and North Macedonia. The company is renowned for its extensive range of affordable products, catering to a broad demographic.
I plan to write a detailed analysis of Jumbo soon. The company boasts a great return on capital and consistent growth, making it a compelling subject for further exploration.
Grupa Pracuj S.A.
A few weeks ago, I published my article on Grupa Pracuj, the Polish HR services and software provider. The company has excellent growth prospects, strong margins, and impressive return on capital. Recognizing its potential and viewing it as undervalued, I also took a larger position in this stock.
You can find my detailed analysis here:
Ulta Beauty
This is not an insider tip, but Ulta Beauty's stock has taken a significant hit in recent months. I believe this presents a great opportunity, as the company, with its wide moat, is now undervalued. I already held a position in Ulta Beauty, but I have now increased it.
That's all for today! Don't miss my next analysis, stock watch list, and the latest episode of my investment journal. Subscribe here for free:
Thank you very much and have a great day!
Bernhard
Disclaimer: The information provided in this publication is for educational and informational purposes only and does not constitute financial advice. The content is solely reflective of my personal views and opinions based on my research and is not intended to be used as a basis for investment decisions. While every effort is made to ensure that the information is accurate and up-to-date, the writer makes no representations as to the accuracy, completeness, suitability, or validity of any information in this post and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All readers are advised to conduct their own independent research or consult a professional financial advisor before making any investment decisions.
Wow. 80 stocks is a lot to keep track on 😅