Canal+ : A Sheep in Wolf's Clothing

It’s now 6h45m a.m and my girlfriend woke me up about 40 minutes ago. She got back home from Turkey yesterday, and I just noticed that she had forgotten to adjust the clock for the 1 hour time difference. I’m not a morning person at all, but will try to make use of the extra time before work by starting a write-up on Canal+, a French media company with a very interesting structure.

Let’s get the complicated part out of the way. There are 3 separate Canal+ entities that must be distinguished before diving deeper into the valuation:

• Canal+ Group: owned 100% by Vivendi. Canal+ Group has an 80% stake in Canal+ France. It also has other assets such as Canal+ Régie (100%), Itélé (100%), Cyfra+ (75%) and StudioCanal (100%).
• Canal+ France: owned 80% by Vivendi and 20% by Lagardére. Canal+ France owns 48.5% of Canal+ SA. It also has other assets such as Canal+ Overseas (100%) and Canal+ Distribution (100%).
• Canal+ SA or Societe d'Edition de Canal Plus (C+ for simplification) is the company that I’m interested in. The company offers 6 exclusive channels: Canal+ channel, Canal+ Cinéma, Canal+ Sport, Canal+ Family, Canal+ Hi-Tech and Canal+ Décalé. More details further down.

Source: Societé d'Edition de Canal Plus 2011 Annual Report

Apple: My Largest Position

I have long been a fan of the Apple’s products. I have an iPhone 4 and before that an iPhone 3, I have old iPod Nano and Shuffle, and back in university I had an 11’’ Powerbook, which despite giving me a “cool” factor, turned out to be an awful experience. Besides this I’m thinking of buying an iMac and patiently awaiting the new iPhone. So you could say I’m a bit of an Apple junkie. These days it’s hard not to be …

Shame on Me!

This said, one of my big “misses” was not buying Apple shares when I first realized that headphones were magically turning white all around me. As if that wasn’t enough, I failed to see the obvious once I bought my first iPhone, and then again when I exchanged it for a new model. Instead of making my annual contribution to Apple’s investors I should have been one of them. Thankfully I came to my senses last year when I started building up a position in Apple shares.

Why I Own IBM

I received the hard copy of IBM’s 2011 annual report a few weeks ago but only got around to reading it today. I always enjoy reading the annual reports of companies I am already invested in. It gives me the opportunity to revise if the reasons why I bought shares are still valid, and if the company is still worthy of my investment.

Inception

I got the idea to invest in IBM (IBM:US) from Marvin Schwartz, the vice-chairman of Neuberger Berman, in the beginning of 2010. At the time I was working for a Portuguese asset management company, and I traveled, with one of my bosses and a Client, to Geneva to attend a conference set up by UBP. That was the first time I set foot in Geneva, who knew 3 or 4 months afterwards I would be moving there!

Anyway back to the story. At the conference, we listened to lots of presentations, mostly from fund managers. Usually these presentations are not very interesting because they all look the same: fund managers show you 10 to 15 slides with the structure of the company and investment process and on how they have an edge. After that you are usually shown one or two stocks the fund owns (that are working out well of course).

Avangard: You Need Eggs to Make an Omelete

Avangard (AVGR:LI) is an Ukrainian agro-industrial holding company, specialized in the production and distribution of shell eggs and egg products. The company is vertically integrated and owns and operates each of the key stages of the production cycle.

This little known company is the second largest egg producer in the world, with its flock of 25 million birds having produced 6 billion eggs in 2011. The largest egg producer in the world is the US based Cal-Maine Foods, which has a flock of 33 million birds and an annual production of almost 10 billion eggs.

Renault: Trading Considerably below SOTP

Renault (RNO:FP) is a French automaker that designs, produces and markets passenger cars and light commercial vehicles. What most people don't know is that Renault holds substantial stakes in Nissan, Volvo, Daimler and AvtoVaz. The company also owns 99% of Dacia and 80% of its JV with Samsung (Renault Samsung Motors).

Besides this the Company also owns RCI Banque, a financing arm that provides automotive financing for all three of Renault's brands.

The diagram below sums up Renault's stakes: