Compound & Fire Portfolio
The Compound & Fire Portfolio is announced in this article. From here we will monthly update the portfolio and track the progress.
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Today I will share the Compound & Fire portfolio for the first time. I want to own a maximum of around twelve stocks, which I intend to hold for the long-term. With a maximum I am able to analyze and understand the business and also follow-up on them.
The strategy is to always stay invested, no matter what the macro environment is. If the underlying business of a company keeps on growing, then the stock prices for the short-term don’t matter as the long-run the stock price will follow the earnings.
Here we go, the current portfolio consists of eight stocks:
Some stocks I own a bit longer already (Euronext and NN Group), but I have updated my portfolio recently to be aligned with my Portfolio Strategy.
Each stock has a different weight in my portfolio and here is the weight per company:
My portfolio statistics:
Source: Finchat
The forward P/E of my portfolio seems high with 26.38, but this is mainly driven by 1 company: Coupang. If I would exclude Coupang the forward P/E drops to 18.17. With 1.32 the Beta of Coupang is also the highest of all stocks. The Beta tells something about the volatility of my portfolio. With 0.87 the portfolio is less volatile compared to the overall stock market.
As it is the start of the portfolio, I will give a short summary why I am invested in these eight companies.
Nedap: Outstanding management, secular growth and market leader in different business units. Potential to increase margins sharply. Read here the Nedap Full Analysis.
Coupang: their founder Bom Suk Kim reminds me a bit to Elon Musk, as both are obsessively focused and maniacally dedicated in building there businesses. Coupang is a full e-commerce platform in South Korea and recently expanded towards Taiwan. Despite competition of China and Amazon, Coupang has been able to maintain it’s strong position and grow it’s customer base. With their WOW loyalty program they have 14 million paid members. Valuation seems rich looking at their forward P/E of 78.32, but looking at their Forward EV / Sales ratio this is 1.33. If we compare this with Amazon (3.11), Mercado Libre (4.15) or Sea Limited (2.44) then Coupang has the lowest ratio.
Kinsale Capital Group: Main reason for selecting Kinsale is also the founder and CEO Michael Kehoe, at the helm since 2009. Kehoe has broad experience in the insurance industry for decades already and when he started Kinsale there were a lot of former colleagues following him out of loyalty. Kinsale is active in the Excess & Surplus (E&S) insurance market and Kehoe’s deep understanding is an important asset. Kinsale has a strong track-record of growth and the E&S market is expected to continue growing, where Kinsales technology and data-driven decision making gives them competitive advantages. They are also known for strict cost control.
Dino Polska: Maybe it gets a bit monotonous, but also Dino Polska I really like their founder and strong leader Tomasz Biernacki. He founded the company and still is one of their largest shareholders. Dino Polska is a supermarket chain, where Dino builds and own all their supermarkets. They are investing all their earnings into the company to open new stores. With a return on invested capital of around 17% this is a great way to allocate the capital. Biernacki is 50 years old, so I expect he will continue to grow the company the next ten years.
Rightmove: Main reason I have add Rightmove is the strong moat they have in combination with strategic growth areas and the share buyback program. Read here the Rightmove Full Analysis
Euronext: Not the most exciting company, but like Rightmove a company with a wide moat. Euronext operates stock exchanges in Netherlands, France, Belgium, Italy, Portugal, Ireland and Norway. Their CEOBoujnah has diversified the business a lot, making them less dependent of volumes. Those market volumes have declined last years, but Euronext succeeded in increasing revenues year-over-year since 2017. Boujnah is well-known for succesfully acquiring companies and delivering on promised synergies.
Liberty SiriusXM: A bit of an outlier compared to the other companies, as this is a company with quite some debt on their balance sheet and where market is questioning their ability to grow. But the expected free cash flow yield of 15% is whopping and they are very strong in long-term contracts with automakers for satellite radio. Automakers receive a part of the revenue of subscriptions. Buffett is buying into this company, I analyzed why and followed him by adding a position in my portfolio. Read here the Liberty SiriusXM Full Analysis.
NN Group: This Dutch insurance company I own already a bit longer. In the past NN Group had charged excessively high costs on investment-linked insurance products to their customers. Due to concerns of potential high costs the stock price was significant undervaluated. When NN settled for a compensation for policyholders, the share price recovered. Although I am up more than 50% on this share, I still want to harvest their dividend. On top they have a share buyback program running this year of EUR 300M.
I will share a deep-dive of the companies that weren’t published yet in the coming weeks, so there is a deep-dive available for all of them. Out of all companies I rate Nedap currently as most attractive and advice to buy below EUR 71,25. This gives a high margin of safety.
I hope you have enjoyed reading my portfolio. Feel free to like the post and share it with friends!
Disclaimer
The information in this article is provided for informational and educational purposes only.
The information is not intended to be and does not constitute financial advice or any other advice, is general in nature, and is not specific to you. Before using this article’s information to make an investment decision, you should seek the advice of a qualified and registered securities professional and undertake your own due diligence.
None of the information in this article is intended as investment advice, as an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any security, company, or fund. The author is not responsible for any investment decision made by you. You are responsible for your own investment research and investment decisions.
I can only appreciate the fact that you're so open and honest about your portfolio.
Great job and thanks for sharing. I love Dino, Coupang, and Kinsale!!!