My 26 positions to start 2025

Disclaimer: This is not investment advice. The author is long the shares mentioned in this article which has been written for entertainment purposes only. He may buy or sell shares at any time without notification. Views expressed by be biased and / or wrong. Do not rely on this article when taking financial decisions.

Happy New Year everyone! I hope you have enjoyed a calm and peaceful time at the end of the year and can start 2025 with a fully recharged battery. Since I had the chance to spend a fantastic family vacation, my year-end writing slightly delayed around this change of the year. However, both the portfolio and performance tabs have now been updated. In this post, I will go through the portfolio at the turn of the year position by position. The next post will include a performance review, some learnings and thoughts about what happened to the market last year. A little spoiler and warning at the same time: The Augustusville portfolio returned +7.8% (pre-tax in EUR) in 2024. While this is better than inflation and not out of line with European small cap indices, it is below the ambition level in a year when world indices returned closer to 25% and various stock pickers did much better than this. I congratulate everybody with a stellar 2024 performance and conclude that our money had earned more in an MSCI World ETF last year than with my active management. Reasons for the development will be analyzed in the next article. But if you look at our positions below, potentially in search for good ideas, please be aware that you look at the portfolio which underperformed in 2024.

With that, let’s do a review of the portfolio as it currently stands, with the positions ordered by weight. Please enjoy and let me know any thoughts you may have!

1 - Fairfax Financial (9.7% position)

We have held the position in Fairfax from the start in spring 2022. Fairfax is a multinational insurance group with activities around the globe and a very interesting equity portfolio. Over the years, they have had the guts to do things differently and going against convetional wisdom, leading a creative and largely successful capital allocation. Fairfax has an “Outsider” management team, led by Prem Watsa who is also the largest shareholder. The insurance operations have consistently produce combined ratios around 95% (this may change in bad years) and the company played the rates cycle well with higher rates likely to produce significant interest income. 2024 saw shortseller attack by Muddy Waters which did not convince the market, followed by a steep rise in the share price, ending the year at +51% in USD. While Fairfax is not as cheap as it was, I think they still have a good runway ahead as I expect them to continue to seize upcoming market opportunities and allocate capital wisely. Fairfax is expected to remain a core holding of the portfolio throughout 2025. A great compendium on Fairfax by Viking can be found here.

2 - Compagnie de L’Odet / Bolloré (Combined position of 9.3%)

Odet has been in the portfolio since the beginning and I have written about it here, here and here). 2024 saw a lot of change to the formerly complicated structure. The simplifaction of the complex is ongoing with the former Rivaud entities being completley taken over / squeezed out. At the same time, Bolloré sits on a large pile of cash (about 6b EUR in per the latest statements) which is employed to repurchase shares. Vivendi, a group controlled by Bolloré with a shareholding close to 30% has been broken up into four entities, creating new investment opportunities (see below) while it is likely that Bolloré will use some of its cash to add here. There is a lot going on and the various steps undetaken appear to be value-accretive to me. In 2024, we reduced the Odet postion while building up Bolloré SE. As we appear to be approaching the moment of a Bolloré/Odet merger, there is a risk of a take-under for one of these entities to the benefit of the other one which makes it appear smart to diversify.

3 - Supreme PLC (5.1% Position)

Supreme PLC was a new addition to the portfolio in 2024. This UK distributor of consumer goods (vaping, nutrition, batteries, drinks). The company has been under scrutiny from investor as vaping products are its biggest contributor and the UK is set to impose new regulation/bans. At the same time, Supreme has been diversifying away both from vaping and its distribution-only model as they are set to produce and brand some products themselves. They have done some acquisions such as Typhoo Tea, using their free cash to spur. The company still trades at a cheap multiple and the outlook appears promising to me.

4 - Amadeus Fire (5.0% Position)

German staffing, recruiting and HR training company with a long history of high capital returns and profitable growth. Recently, this growth has stalled, driven by the soft German economy and increasingly difficult labour market. Stock price is down >50% over three years, even though the company retains high returns on capital and will likely participate in any upswing. Trading close to 9x EV/EBIT.

5 - Italmobiliare (4.7% Position)

Italmobiliare like Odet is a family-controlled holding company and is a vintage 2023 investment of 2023 . Its assets are mostly private investments in Italy, with the “flagships” of Caffe Borbone and Oficina Profumo die Santa Maria Novella but also some other interesting operating companies. Italmobiliare trades at a discount to the conservativel assessed SOTP. Many assets have performed well even though the high coffee prices have been weighing on Borbone’s margins. In 2024, there has not been much exit activity (unlike 2023) and it will be interesting to watch if this changes in 2025.

6 - WeConnect (4.6% Position)

WeConnect is a fairly small French IT distribution business. The company is run by the majority shareholders and has built a fairly impressive track record after growing revenues at stable margins for some time. 2024 has seen a slow H1, however the company expects to accelerate in H2 and achieve 300m EUR in sales. WeConnect trades EV/EBITDA of about 5, 1x book equity and has historically achieved returns on equity in the high teens. I am hoping for continued operating success but will also keep a close eye on the position during 2025 as this is not the most comfortable position in the portfolio.

7 - Millicom (4.3% Position)

Millicom finally stepped up its game in 2025. The Latin American telecom expects to deliver 650m USD in Equity Cash Flow, reducing its leverage ratio from 3.3x to 2.5x. A dividend was initiated and a share repurchase program started. The company is also streamlining its listing from dual Swedish/US to US-only. There is still a special situation angle with French billionaire Xavier Niel continuing to build his stake. We will likely keep our holding and wait for operational strengthening or an attractive buyout offer

8 - Hortico (4.0% Position)

Hortico is another distributor in my portfolio. It is focused on horticulture products, but also fertilizers, plant protection products etc. In 2024, the company also entered the business of running consumer garden centers. Hortico has had a good run in 2024, up around 40%, yet still trades at PE 7 and is debt free. Sales are up by 20% but wage inflation is a concern for this and other Polish companies (like Eurotel below), building pressure on margins. Planning to hold but also watch closely.

9 - Brodrene A&O Johansen (3.8% Position)

This Danish supplier of technical installation materials for repairs, renovation and maintenance. This is a distribution company which has grown nicely over the years and earned good returns on capital on the way. There was a weakening over the last quarters, linked to the slump in construction activity. I have also become a bit more sceptical of mangement and wondering if I should rather allocate my “construction-related” bucket to other candidates like Thermador.

10 - DCC plc (3.7% Position)

DCC is a distributor of energy and healthcare products, mostly in the UK and Ireland, but also expanding across continental Europe. The company is relatively boring but has delivered consistent growth, margins and capital returns. In November, DCC announced a strategy update and will seek to divest its Technology and Healthcare divisions in order to focus on energy distribution. The divestment proceeds are expected to be distributed to shareholders and energy has been the most lucrative and largest DCC business. So I think the divestment is good news and will watch with interest the next steps. Expecting to hold this for some time.

11 - Thermador (3.6% Position)

French distributor of products for heating, plumbing, ventilation (pumps, tabs,…). Thermador operates as a roll-up and has acquired >20 companies over the years. The holding has a pretty unique operating structure of granting each company a large degree of independence which has resulted in steadily rising profits and strong returns on capital. REcent performance has been hurt by the weakish French construction sector which will hopefully recover at some point. I had watched Thermador for some time and added slightly to the postion in Q4. Planning to hold this position for a long term and may add on weakness.

12 - Text SA (3.6% Position)

Polish software company in the field of online text communication, mostly thorugh its LiveChat product. Text has built new products around LiveChat and is working towards launching a product suite. Text has been and still is very profitable but recent numbers show increased churn, in particular with smaller and Asian accounts and the market is concerned about potential competition from AI. Management has skin in the game and the company pays large dividends.

13 - Eurotel (3.6% Position)

Polish company which runs retail stores for products of Apple, T-Mobile and Canal+. They also engage in B2B business largely registring, configuring, servicing Apple products. The company has consistently profitable and achieved high returns over the past 10 years but slowed down from 2023. Hopes are for new Apple produts to drive growth. Almost all earnings are paid out as dividends. Profitability suffered due to increased wage costs. Business model does have operating leverage.

14 - Nilorngruppen (3.4% Position)

Sweden-based producer of fashion labels which I wrote up last year. I called the company a cyclical compounder with the business growing and achieving high capital returns over time, but not every year. Their edge is in being able to design and produce for a client-base they have served for a long time. So I think at least a long-term mindset may be needed here, due to the cycles of the industry. 2024 saw the company returning to growth and from management reporting it is well possible that we will see an upswing again from here.

15 - Delfi (3.2% Position)

Delfi is a Singapore-listed producer and distributor of chocolate products, mostly in Indonesia where the company is in a market-leading position. The company owns strong brands and a valuable distribution network in the fourth-most populous country on earth with a growing middle-class. In 2024, Delfi performed poorly (-30%) as growth stalled and margins were under pressure due to high commodity prices and increased competition. Delfi remains a strong player in its markets and earns decent capital returns. It may be an interesting takeover target for the likes of Nestle, Unilever or Mondelez at some point. Watching the developments here but unlikely to sell soon.

16 - Piscines Desjoyaux (3.2% Position)

Piscines Desjoyaux is a listed French family business. It is one of the market leaders in the design, construction and servicing of private swimming pools. The business boomed during Covid 19 but normalized thereafter, resuting in a 60%+ decrease in share price. The company has been investing in production capacity and efficiency gains, it has a franchise network across Europe and I tend to believe there are some after-sale/mainenance revenues here. Trading at 6x 2024 EV/EBIT which is somewhat depressed.

17 - Funkwerk AG (3.2% Position)

In my view a German “hidden champion” in the sector of train and rail communication. Potential beneficiary from upcoming investments in railroad infrastructure across Europe. Experienced management, high returns on capital. 2024 will see an increase in sales, partly driven by bolt-on acquisitions, but probably worse margins than last year. My confidence has grown over the past year since I think they have a potential to grow significantly from here while being vaued cheaply by the market for now. Write-Up is here .

18 - Maschinenfabrik Berthold Hermle Pref (3.0% Position)

Hermle is another family-owned German hidden champion. The company is a market leading producer of high-precision milling machines. Hermle has been suffering with the German downturn and European economic stagnation. It may be vulnerable to US duties. At the same time, it will likely remain a technology leader in its niche and likely recover if and when the economy improves. All the comon shares are family owned, only prefs trade in the market.

19 - Aplisens SA (2.9% Position)

Polish producer of high-precision steering and metering equipment, active in Poland, Eastern and Western Europe and increasingly the US. Reputation for high-quality and advanced technology. In my view a business with a certain switching cost. Growth stalled in 2024, still profitable, earning double digit capital return and trading around 6x EBIT. In my view a durable high-quality business.

20 - PVA TePla (2.9% Position)

Recent addition to the portfolio after one reader suggested it following my piece on German companies. PVA TePla produces specialized materials/equipment for the semiconductor and industrials sector. A spinoff from TecDax veteran Pfeiffer Vacuum, the company has doubled revenues and profits over the last five years, yet the share price is down. The company brought in a new fairly young CEO at the start of 2024 and recently launched a share buyback program .

21 - Bayer AG (2.8% Position)

German (not anymore that) large cap company. It is one of my contrarian positions and, after a number of disappointing years and a share price decline of more than 80%, one of the most-hated stocks I am aware of. The company has a lot of problems, including legal cases, a potential patent cliff at the pharma division and high debt. I am betting that there is a solid core and that the measures of the new management team can unlock the potential of this company once again.

22 - XP Factory (2.7% Position)

UK nano cap in the field of competitive socializing, running owned and franchised escape rooms and competitive socializing bars. Stock is down 57% over three years even though the business has markedly improved since Covid, management seems to have a plan for the future and the company generates both earnings and cash. Fairly small position with. Stock is illiquid and could swing wildly in either direction.

23 - Paypal (2.5% Position)

Leading technology platform and digital payment company. When the shares became unpopular this summer, I opportunistically opened a position. In my view, the company enjoys significant network effects and is embedded in many applications. I was looking to enter the position slowly but the share price rebounded relatively fast, so I halted buying. I will play this position opportunistically.

24 - Nintendo (1.6% Position)

Nintendo has a few interesting features including significant IP and brand power (everyone knows Mario and Pokémon), an tech ecosystem around the Switch, a web of cross-holdings and a shift in capital allocation towards becoming more shareholder-friendly. 2024 financial performance has been lacklustre while everone is waiting for the new Switch, to be released in 2025. I have yet to assess what to do with this position may be divested or added.

25 - Louis Hachette Group (1.3% Position)

Louis Hachette Group was spun from Vivendi in the 4-way split in December 2024. The company consists of a ~64% stake in Lagardere SA, a leading book publishing and travel retail company plus full ownership in Prisma Media. Hachette is currently valued at 1.5B EUR, carrying no net debt while its stake in Lagardere is worth 1.8B EUR at current market prices. Over recent years, Vivendi/Hachette has built its stake in Lagardere and they may well continue to do so. Lagardere itself has been developping dynamically and it can be imagined that they will split or divest the travel retail business at some point.

26 - Vivendi SA (1.1% Position)

Vivendi at this point is a small position which was built after the spin. The Vivendi remainco largely consists of prticipations in listed and some unlisted companies. The 9.9% stake in UMG alone is worth the entire enterprise value while the shares in Banijay, MFE, Telcom Italia and Telefonica come for free. Vivendi may repurchase share or distribute its shareholdings. I think it very likely that the controlling Bolloré family will find a way to create value from here.