Author Topic: CFRUY - Richemont  (Read 28896 times)

Mr Pink

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Re: CFRUY - Richemont
« Reply #60 on: May 20, 2016, 09:57:44 PM »
Probably not going to do anything in this but want to thank Rishig for the interesting discussion and sharing great links


rishig

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Re: CFRUY - Richemont
« Reply #61 on: June 24, 2016, 09:08:50 AM »
I presented Richemont at ValueX. My presentation: http://bit.ly/richemont-valuex

I also added to my position this morning.
« Last Edit: June 24, 2016, 09:12:08 AM by rishig »

valuefinder0525

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Re: CFRUY - Richemont
« Reply #62 on: June 30, 2016, 08:36:51 AM »
I presented Richemont at ValueX. My presentation: http://bit.ly/richemont-valuex

I also added to my position this morning.

Have you done a brand by brand analysis in terms of the returns on the invested capital? Curious to see how many of the brands were good investments.

Also any idea what Rupert could do with all the cash?

rishig

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Re: CFRUY - Richemont
« Reply #63 on: July 01, 2016, 08:08:24 AM »
I presented Richemont at ValueX. My presentation: http://bit.ly/richemont-valuex

I also added to my position this morning.

Have you done a brand by brand analysis in terms of the returns on the invested capital? Curious to see how many of the brands were good investments.

Also any idea what Rupert could do with all the cash?

A brand by brand analysis of ROIC is not possible since the they do not break out capital deployed on a brand basis. Overall ROIC has been north of 25% consistently.

From reading the transcripts, my best guess is return of capital via dividends. Rupert wants to continue growing dividends at 15%. If the industry continues to be ugly, they may do an acquisition.

fareastwarriors

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Re: CFRUY - Richemont
« Reply #64 on: November 04, 2016, 10:17:11 AM »
Who Needs a CEO? Not Swiss Watch Giant Richemont

Luxury company unveils management overhaul as it reports sharp fall in first-half profit


http://www.wsj.com/articles/richemont-to-eliminate-ceo-post-in-management-reshuffle-as-profit-falls-1478247354

fareastwarriors

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Re: CFRUY - Richemont
« Reply #65 on: January 12, 2017, 09:14:06 AM »

walkie518

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Re: CFRUY - Richemont
« Reply #66 on: November 12, 2019, 09:21:47 AM »
did this thread die? 

updated thoughts?  my sense is it's cheap, something w/a 6x CHF of course even better, but the stock has gone no where on the 5 yr chart... might be on back of yoox acquisition? 

not sure how they underwrote that but owning the funnel shd add a lot of value?

watches return to growth can't be a negative: http://www.fhs.swiss/file/59/comm_190909_a.pdf though not where it was just a few years ago...

I would think Hong Kong underlines the negativity?   

Okonomen

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Re: CFRUY - Richemont
« Reply #67 on: November 12, 2019, 09:39:21 AM »
did this thread die? 

updated thoughts?  my sense is it's cheap, something w/a 6x CHF of course even better, but the stock has gone no where on the 5 yr chart... might be on back of yoox acquisition? 

not sure how they underwrote that but owning the funnel shd add a lot of value?

watches return to growth can't be a negative: http://www.fhs.swiss/file/59/comm_190909_a.pdf though not where it was just a few years ago...

I would think Hong Kong underlines the negativity?

It trades around 4% FCF yield. I disagree that a company may be cheap due to the price not moving for several years. It also traded at a crazy valuation back then, so like with KO, an expensive price equals many many years of inferior returns for buyers.

John Hjorth

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Re: CFRUY - Richemont
« Reply #68 on: November 12, 2019, 11:07:24 AM »
did this thread die? 

updated thoughts?  my sense is it's cheap, something w/a 6x CHF of course even better, but the stock has gone no where on the 5 yr chart... might be on back of yoox acquisition? 

not sure how they underwrote that but owning the funnel shd add a lot of value?

watches return to growth can't be a negative: http://www.fhs.swiss/file/59/comm_190909_a.pdf though not where it was just a few years ago...

I would think Hong Kong underlines the negativity?

It trades around 4% FCF yield. I disagree that a company may be cheap due to the price not moving for several years. It also traded at a crazy valuation back then, so like with KO, an expensive price equals many many years of inferior returns for buyers.

Personally, I would substitute the "equals" above in Okonomens post above with "may equal". It's - as always - about personal assessment of the investment thesis and time horizon - here, very long. [ Joel Stevens, Austin Value Capital [December 31st 2015] : Price and Returns].

Not for everybody, and I may be wrong in this space at the moment.
”In the race of excellence … there is no finish line.”
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walkie518

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Re: CFRUY - Richemont
« Reply #69 on: November 12, 2019, 11:40:52 AM »
did this thread die? 

updated thoughts?  my sense is it's cheap, something w/a 6x CHF of course even better, but the stock has gone no where on the 5 yr chart... might be on back of yoox acquisition? 

not sure how they underwrote that but owning the funnel shd add a lot of value?

watches return to growth can't be a negative: http://www.fhs.swiss/file/59/comm_190909_a.pdf though not where it was just a few years ago...

I would think Hong Kong underlines the negativity?

It trades around 4% FCF yield. I disagree that a company may be cheap due to the price not moving for several years. It also traded at a crazy valuation back then, so like with KO, an expensive price equals many many years of inferior returns for buyers.

Multiple compression from lofty heights is not the story here ... there was a decline in profitability per dollar of sales due to investment activities

2019 sales were nearly €14B and 2015 sales were €10B so +7% annual sales growth is not nothing but no super interesting either... more pointedly, in FY2015 Richemont had a 25% operating margin and the last annual showed 14% so what happened?

Most of the increase in sales occurred between 2018 and 2019 on the back of the Yoox and Watchfinder acquisitions.   The value of adding these distributors to the group has yet to be realized but I think this is what makes the investment case and obfuscates the statements leading to comments on 4% FCF yield that no one wants.

Surely, both are different businesses, but Watchfinder is a gem.  Not only does Richemont make money on the initial sale, but they can make money trading the assets over time in the secondary market.  Moreover, because they create a network of watch traders, they get not only repeat customers but a center of mass for both markets.  This also gives Richement an outlet to buy broken and resell fixed w/NOS parts ... huge upside in a fragmented market if addressed effectively. 

I wouldn't downplay the value of Yoox either though the model might have less synergy with existing businesses?  Others who know more can correct but I thought they got Yoox at a reasonable valuation considering site traffic and sales?

Taking all of that into account, FY19 only shows a 5% improvement in operating profitability over FY18 with a 27% increase in sales (mostly Watchfinder and Yoox).  I don't think taking the piece of Yoox they didn't own was about a 5% improvement but an update to logistics and omnichannel sales for all brands in the group.  I also think it's likely that mgmt will find ways to return to historical profit margins once the dust settles (even if it takes a few years).

My point is that under the hood there is a lot going on... we'll hear more on Nov 15 ...