#highquality #stocks #portfolio #proven
Remi Le Bailly: Good morning to all and to all. Thank you for your loyalty and your many questions. I’ll start by answering a question that I haven’t been asked, but since the topic has given rise to a lot of comments from you over the last few weeks, I’ll start with that.
This is Albiome. Last week the result of the takeover bid after the reopening was known. KKR has crossed, this time, the bar of 90% of the capital and voting rights. Therefore, you will be able to implement a forced sale procedure, at 50 euros per share. This time the shareholder will no longer have the option of offering his shares to the offer or not, he will be obliged to do so. It is expropriated.
Remember that we felt the price was not high enough and we had advised holding the titles. Very few investors were of our opinion. For those who had kept the titles, the operation is neutral. This amounts to the same as if they had put their securities up for bid. After this first “false” question, let’s now move on to the real ones…
Theo: Hello Mr. Le Bailly. After following your advice to sell when the Cac was at its zenith, I am still invested at 30%. Also, my question: should we sell or when should we replace it (inflation, downside risk, etc)? Sincerely.
Remi Le Bailly: Thanks twice Theo. First because you congratulate me, which is always a pleasure, and then because your question is fully in tune with the questions of the moment.
In fact, the atmosphere is not good. The clouds are gathering and the market has pulled back sharply over the last week. Despite this, as you will have undoubtedly read in the investment tracks published in this week’s weekly, the market tends to fall more strongly when the economy enters a recession, which is the scenario for many financial institutions and the lowest point reached after the start of the recession.
This means, therefore, that if this scenario occurs, we will have to wait several quarters before hitting the bottom. But these are just averages observed in the past (since the early 1970s). Every situation is unique. For one reason or another (more efficient central banks, the end of the war in Ukraine…), the economy can take a turn, which would avoid this black scenario.
This means that being 100% liquid is a bet that can be risky. If the market turns around, you will miss the start of the upside… You have a 30% investment, which seems like a good compromise to me. Hold high-quality stocks that have proven their worth in the past.
As for your question “when to reinvest”, that is, when to reinvest, you will have understood that I think it is better to wait for the economy to enter a recession (if the most likely scenario materializes), or for it to restart having avoided the recession. .
Didier: In your opinion, given the current situation (war in Ukraine), what threshold will the Cac 40 have reached on December 31, 2022? Thanks in advance for your reply.
Remi Le Bailly: I think it will be below 6,000 or even 5,500 if the prospect of a recession is no longer in doubt.
Victor70: Hello Mr Le Bailly. I followed the recommendation to buy shares of Chargeurs, especially since the advertised yield was high. Should we keep these titles pending a rise? In addition, the Investir site does not include an error about dividends: you announce a dividend of 1.24 euros… But elsewhere you document 0.76 euros. Thank you for your details.
Remi Le Bailly: We dedicate an article to Chargeurs in this week’s weekly. We have gone from “purchase” to “speculative purchase” because there is obviously some distrust of the company, whose results continue to be generally satisfactory.
In addition, regarding the dividend, the company paid its dividend of 1.24 euros for the 2021 financial year in two installments. A deposit of 0.48 euros at the end of last year and a supplement, called balance, in April. Most companies distribute the dividend all at once, but others do it in two or even four installments, such as TotalEnergies.
For the 2022 financial year, Chargeurs has decided to pay a deposit of 0.22 euros to be paid on October 6. We expect a total dividend of €0.50 for the full year.
Minouchat: Hello, Mr. Le Bailly. I averaged down Orpea at €25, do you think we should do the same at €14/15? I think the value of the housing stock alone is higher than the current stock market value, but by how much? Given the massacre of value but still complete EPHADs, could a takeover bid come up? Sincerely.
Remi Le Bailly: Many of you ask me about Orpea. To begin with, I remind you that I am very suspicious of falling averages. Too often, it is a way for the investor not to recognize that he was wrong.
The title will probably be worth more than today in 5 years. In 2, I’m not sure. We advise keeping because it is too late to sell.
Mmaxx: Hi, was there a clerical error in your “Managers who sell short” section in your last edition, where the paragraph dedicated to Alstom and Vinci refers to a railway specialist and an IT group? Thank you for your talk and, in advance, for your clarifications.
Remi Le Bailly: Well seen. You should have read Atos and not Vinci. Sorry for this mistake.
Contrary: What is your new opinion on the action of M6 after the abandonment of the merger project with TF1?
Remi Le Bailly: If you participate in this chat, you also read our tips on the site. In the early afternoon we published an article in which we recommended putting the M6 up for sale, which was the company, a priori, the most favored by the TF1-M6 marriage. We continue to buy TF1 which benefits (like M6 on the other hand) from a generous dividend and which has more potential to improve profitability.
Gim: Hi Mr. Le Bailly, how many GTT shares does Engie still have? Thanks for your reply.
Remi Le Bailly: Engie has just lightened its position again at the end of last week, selling 6% of the capital. This weighed on the title on Friday. Engie still has around 5% of the capital and has promised to hold it for at least a year. In addition, Engie issued, in May 2021, zero coupon bonds with a 3-year maturity, redeemable for GTT shares. This represents approximately 10% of the capital.
Your implied question is about the risk of “returning paper”. Therefore, he seems excluded for 1 year. Then there is the potential 5% arrival on the market in 1 year, then 10% in two years. But in the latter case, bond underwriters can decide to keep all or part of their securities.
I remind you that we are buying GTT, a company that is benefiting from the “boom” of liquefied natural gas, which is a way to reduce Europe’s dependence on Russian gas.
Maseti: Hi, I’m trying to get a clearer picture of real estate companies. After reading La Cote on Saturday, I don’t know which one to choose between Icade, Argan, Gecina and Nexity (depending on their leverage, rebound capacity, profitability, etc.). Thanks for enlightening me. Sincerely.
Remi Le Bailly: We are buying these 4 real estate companies, but they have very different profiles. Gecina, present in the residential real estate sector, is the safest. Argan is the most dynamic value because it evolves in the thriving logistics market, but its performance is less attractive. Nexity and Icade have a riskier profile, especially Nexity which is a promoter, but these last two values are heavily discounted…
Pierre: Hello, Mr. Le Bailly. What is his opinion on ABC arbitration? In fact, given the current high volatility of the markets, I thought this stock could be interesting, especially since the performance is good and it was, a few months ago, in their Top 10 performance. However, I find it very disappointing for several months now, with a price that is only going down… Thank you for your opinion.
Remi Le Bailly: Very disappointing it is a bit harsh. The stock is down about 5% since the start of the year and over a year, when the Cac 40 gives way, he, 15% since the start of the year and over a year. The company paid a dividend of 40 cents (in four installments) for the year 2021, which means that its reinvested dividend yield is more or less stable throughout the year.
We’ll know more tomorrow about the effect of volatility on the accounts, as the company releases its first half results.
Nicolas: Hello Rémi, I have 130 shares of the UMG Group for an average of 22 euros. The title has done nothing for a long time, should we sell and strengthen Vivendi? Or should we hold on and do you think the music will play again? Thanks for all those chats and answers.
Remi Le Bailly: I would tend to keep the UMG titles. The stock was introduced too expensive but the music sector is quite defensive. Which is pretty good in today’s environment.
Ron: Hello, with the rate hike is there still time to invest on credit in SCPIs?
Remi Le Bailly: Of course, it’s less interesting than it was a while ago, but the rate of credits is still significantly lower than the performance of SCPIs. This also makes it possible to smooth out the investment effort over time. You just have to negotiate your credit rate well in an environment that is not one of the easiest…
Thank you all for your questions. I couldn’t process all of them, there were too many.
Do not hesitate to try your luck again next week. You will find on this occasion the friend Denis. Good week everyone and see you soon.