Corner of Berkshire & Fairfax Message Board

General Category => Investment Ideas => Topic started by: ICUMD on November 13, 2017, 04:44:03 PM

Title: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: ICUMD on November 13, 2017, 04:44:03 PM
Happened to be talking with the GF about makeup.  Sephora came up and I happened to do a bit of research on who owns this.  Was shocked to find this European Conglomerate spanning high end wines and spirits, fashion, watches, perfumes and cosmetics.  All very high end items with high margins. 

The ADR (LVMUY) trades on the OTC markets.  PE ratio seems to be in the 30 range, and it has had a doubling of the share price in the last year (I always seem to join the party late...).  In any case, was wondering if anyone had any thoughts or knowledge of this company and whether or not it would warrant being a long term accumulate and hold.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: John Hjorth on May 19, 2018, 12:40:09 AM
ICUMD,

I had a similar experience [details omitted here] in the beginning of this week, that caught my attention to this company, based on their products. Wednesday I read an article on a Danish Press website about Mr. Arnault, and I got further interested. He appears to be the wealthiest citizen in Europe as of now. I've seen him mentioned several times before while reading, but I have never dived further into it before.

I started looking at Forbes, where he is stated to be #4 (https://www.forbes.com/billionaires/#2aaa0658251c) on Worlds Billionaire List. Now that really caught my attention.

Then on to Wikipedia to read about LVMH (https://en.wikipedia.org/wiki/LVMH).
Then on to Wikipedia to read about Mr. Arnault (https://en.wikipedia.org/wiki/Bernard_Arnault).

- - - o 0 o - - -

The description of how the company was built in the Wikipedia article about Mr. Arnault is just such a fascinating story about building a great company, almost like the story of the building of Berkshire, Fairfax, Brookfield, Swedish Investor, or something like that.

- - - o 0 o - - -

I have taken a glance at the 2017 financials, too - whoa! - that balance sheet really scared me! - all those intangible assets! - Absolutely not my cup of tea.

- - - o 0 o - - -

Rigth now, I'm reading the 2017 Reference Document (https://r.lvmh-static.com/uploads/2018/03/lvmh_ddr_va_2017-interactif.pdf), so on/off for the last 2 - 3 days. To me, it seems like a really great document to entry this company.

- - - o 0 o - - -

No conclusions yet for my part, but I feel almost dragged into further reading, it is to me so impressive, this company.

My interim perception right now, though, is, that this is a serial acquirer, based on cash flow generation from assets already owned, and I just happen to get soft in my knees when I see a such a thing. [I hope this does not turn out to become a fatal attraction for me [ : - ) ]].

To paraphrase Mr. Munger: Mr. Arnault is a squirrel, too - but his nudgets are brands.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: Spekulatius on May 20, 2018, 04:35:24 AM
LVMH is the luxury powerhouse. They own the best luxury brands in fashion, Champagne. Irreplaceable, since some of the cashe comes from the French origin. The Chinese love them. It’s prime real estate in luxury.

They are meticulous about protecting their brands, When something doesn’t sell, they will destroy it. There is no discount/outlet dumping like with Coach, which is way lower in terms of brand status anyways.

LVMH could be bought for mid teen PE’s quite a few times, typically when there are issues in the Chinese market.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: John Hjorth on May 20, 2018, 12:09:26 PM
Thank you, Spekulatius,

Your post reads like you have caught interest in LVMH earlier, following it over some years, perhaps many.

It's a complicated investment, - at least to me - and a - for me - new space.

I remember that you have a long term investment in Nestle, that you have held for now many years, that you have mentioned has done very well for you. [Personally, I have now been tracking Nestle for years, without getting in.] Is this company for you similar to Nestle [perhaps not as an investment as such, with regard to thesis, but more like: "The price does not seem right to me here, so I'll just wait and see"], causing one to stay on the sideline indefinitely?

PS:

I really have to post some nitpicking here:

The full formal company name is: "LVMH Mot Hennessy - Louis Vuitton SE", meaning the abbreviation of the company name is "somehow partially reversed", because the direct abbreviation should be "MHLV", which it just isen't!
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: Spekulatius on May 20, 2018, 12:58:14 PM
Thank you, Spekulatius,

Your post reads like you have caught interest in LVMH earlier, following it over some years, perhaps many.

It's a complicated investment, - at least to me - and a - for me - new space.

I remember that you have a long term investment in Nestle, that you have held for now many years, that you have mentioned has done very well for you. [Personally, I have now been tracking Nestle for years, without getting in.] Is this company for you similar to Nestle [perhaps not as an investment as such, with regard to thesis, but more like: "The price does not seem right to me here, so I'll just wait and see"], causing one to stay on the sideline indefinitely?

PS:

I really have to post some nitpicking here:

The full formal company name is: "LVMH Mot Hennessy - Louis Vuitton SE", meaning the abbreviation of the company name is "somehow partially reversed", because the direct abbreviation should be "MHLV", which it just isen't!

Yes, I have followed LVMH over the years, but never owned the stock. I follow most European global company to some extend. I have owned Nestle for a long time (bought in 2003), but had to sell, because my German brokerage where I held the shares would not do business with German citizens living in the US any more, due to more stringent money laundry laws, I never bought again, since the valuation at that point (and now) seems rich.

Another company in ultra luxury is Herms. They are ridiculously profitable, but the shares are expensive (40x earnings). I think the brand cache of the ultra luxury brands is unassailable, because part of it comes from their French origin. I think there are some Italian leather good / assessory companies that are cheap, albeit with less valuable brands equity.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: John Hjorth on May 20, 2018, 02:20:58 PM
Thank you for your reply here, Spekulatius,

I appreciate your input - very much!

- - - o 0 o - - -

The more I think of it, the more it somehow centers about, that what this company is actually doing, is: LVMH is coating global tax on vanity & bon viant behavior.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: rb on May 20, 2018, 08:03:32 PM
LVMH has a stable of fantastic brands. It also has a fantastic management team that is very good at running, growing, and monetizing those brands. These guys are probably the best in the business. I really admire the company a lot. I'm not as concerned about the intangible assets as john is. They're to be expected in this type of business.

Despite my admiration I've never bought in for several reasons. Firstly, It's always been pretty expensive.

Secondly, they don't make their money off of the "Sex and the City" crowd. They make the money off of China. This type of company has high fix costs. This means that the incremental dollar(sale) has a huge margin. For a long time now that incremental sale has been China. So even though this is a very well run company with great assets. When you're buying it you're essentially betting on debauchery in China. In my view debauchery in China can come to a stop and right quick for a number of reasons: changing tastes, en economic problem, or a government edict. It may very well be that an end to debauchery will never come and then the shareholders of LVMH will do quite well. But I have no way of weighing the probability of those outcomes and so I cannot make that bet.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: DooDiligence on May 20, 2018, 09:26:43 PM
Thank you, Spekulatius,

Your post reads like you have caught interest in LVMH earlier, following it over some years, perhaps many.

It's a complicated investment, - at least to me - and a - for me - new space.

I remember that you have a long term investment in Nestle, that you have held for now many years, that you have mentioned has done very well for you. [Personally, I have now been tracking Nestle for years, without getting in.] Is this company for you similar to Nestle [perhaps not as an investment as such, with regard to thesis, but more like: "The price does not seem right to me here, so I'll just wait and see"], causing one to stay on the sideline indefinitely?

PS:

I really have to post some nitpicking here:

The full formal company name is: "LVMH Mot Hennessy - Louis Vuitton SE", meaning the abbreviation of the company name is "somehow partially reversed", because the direct abbreviation should be "MHLV", which it just isen't!

Yes, I have followed LVMH over the years, but never owned the stock. I follow most European global company to some extend. I have owned Nestle for a long time (bought in 2003), but had to sell, because my German brokerage where I held the shares would not do business with German citizens living in the US any more, due to more stringent money laundry laws, I never bought again, since the valuation at that point (and now) seems rich.

Another company in ultra luxury is Herms. They are ridiculously profitable, but the shares are expensive (40x earnings). I think the brand cache of the ultra luxury brands is unassailable, because part of it comes from their French origin. I think there are some Italian leather good / assessory companies that are cheap, albeit with less valuable brands equity.

I've had Hermes, LVMH & CF Richemont on a watch list forever.
Waiting on recession or bad China news to make them cheap?
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: Spekulatius on May 21, 2018, 03:55:48 AM
All these luxury stocks have been on a steep trajectory for the last year or so. I suspect the installment of a permanent leadership in China without the 5 year purge cycle has something to do with it.

A while ago, there was a significant bear market in boozy stocks ( Pernod Richard, LVMH as well to some extend) because the government was cracking down on corruption and apparently those ultra premium cognac etc bottles were the currency. Based on how these stocks are doing and the reports about ultra premium Chinese rice liquor is doing, I am guessing that the winds have changed.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: John Hjorth on May 21, 2018, 12:56:34 PM
LVMH has a stable of fantastic brands. It also has a fantastic management team that is very good at running, growing, and monetizing those brands. These guys are probably the best in the business. I really admire the company a lot. I'm not as concerned about the intangible assets as john is. They're to be expected in this type of business.

Despite my admiration I've never bought in for several reasons. Firstly, It's always been pretty expensive.

Secondly, they don't make their money off of the "Sex and the City" crowd. They make the money off of China. This type of company has high fix costs. This means that the incremental dollar(sale) has a huge margin. For a long time now that incremental sale has been China. So even though this is a very well run company with great assets. When you're buying it you're essentially betting on debauchery in China. In my view debauchery in China can come to a stop and right quick for a number of reasons: changing tastes, en economic problem, or a government edict. It may very well be that an end to debauchery will never come and then the shareholders of LVMH will do quite well. But I have no way of weighing the probability of those outcomes and so I cannot make that bet.

Thank you for sharing your insights here, rb,

I'm understanding from your post, that you've been following this company now for many years.

With regard to intangibles on the balance sheet, for my part, I won't call it sceptisism, as such. It's new space for me. So let me just be totally candid and just call it here what it is for me: A black box for me, based on ignorance & lack of knowledge. I can do some work to learn for myself [and share here on CoBF], and I'm extremely stubborn and persistent to that respect, when I see something, that to some degree has some kind of appeal to me.

So the right term for my part would more be like "un-opinionated, based on lack of knowledge", instead of "sceptical". [ ; - ) ] In short, I simply need to learn by doing. I may end up buying nothing, but at at least then I've got to know a great European company better.

Time and my personal behavior going forward will tell.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: KJP on May 21, 2018, 01:29:18 PM
LVMH has a stable of fantastic brands. It also has a fantastic management team that is very good at running, growing, and monetizing those brands. These guys are probably the best in the business. I really admire the company a lot. I'm not as concerned about the intangible assets as john is. They're to be expected in this type of business.

Despite my admiration I've never bought in for several reasons. Firstly, It's always been pretty expensive.

Secondly, they don't make their money off of the "Sex and the City" crowd. They make the money off of China. This type of company has high fix costs. This means that the incremental dollar(sale) has a huge margin. For a long time now that incremental sale has been China. So even though this is a very well run company with great assets. When you're buying it you're essentially betting on debauchery in China. In my view debauchery in China can come to a stop and right quick for a number of reasons: changing tastes, en economic problem, or a government edict. It may very well be that an end to debauchery will never come and then the shareholders of LVMH will do quite well. But I have no way of weighing the probability of those outcomes and so I cannot make that bet.

Thank you for sharing your insights here, rb,

I'm understanding from your post, that you've been following this company now for many years.

With regard to intangibles on the balance sheet, for my part, I won't call it sceptisism, as such. It's new space for me. So let me just be totally candid and just call it here what it is for me: A black box for me, based on ignorance & lack of knowledge. I can do some work to learn for myself [and share here on CoBF], and I'm extremely stubborn and persistent to that respect, when I see something, that to some degree has some kind of appeal to me.

So the right term for my part would more be like "un-opinionated, based on lack of knowledge", instead of "sceptical". [ ; - ) ] In short, I simply need to learn by doing. I may end up buying nothing, but at at least then I've got to know a great European company better.

Time and my personal behavior going forward will tell.

By intangible assets I assume you mean the "Brands and other intangible assets" and "Goodwill" lines on the balance sheet.  Both of those entries arise from purchase accounting.  See 2017 LVMH Reference Document at Notes 3.3 and 4.  They are a necessary accounting consequence of any acquisition of a luxury brand.  To invert the issue, if an acquisition price could be attributed entirely to the acquiree's tangible assets, then it would have no brand value at all, much less the super luxury type of brands acquired by LVMH. 

In my view, if you're trying to figure out the future economics of the existing businesses, I would ignore all of those intangibles and any amortization related to them.  If you wanted to look at the wisdom of management's past acquisitions, I would include all of the intangibles, add back amortization and any impairments, and look at the incremental returns generated by the acquisitions relative to the capital paid to acquire them. 
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: John Hjorth on May 21, 2018, 01:30:29 PM
Thank you, Spekulatius,

Your post reads like you have caught interest in LVMH earlier, following it over some years, perhaps many.

It's a complicated investment, - at least to me - and a - for me - new space.

I remember that you have a long term investment in Nestle, that you have held for now many years, that you have mentioned has done very well for you. [Personally, I have now been tracking Nestle for years, without getting in.] Is this company for you similar to Nestle [perhaps not as an investment as such, with regard to thesis, but more like: "The price does not seem right to me here, so I'll just wait and see"], causing one to stay on the sideline indefinitely?

PS:

I really have to post some nitpicking here:

The full formal company name is: "LVMH Mot Hennessy - Louis Vuitton SE", meaning the abbreviation of the company name is "somehow partially reversed", because the direct abbreviation should be "MHLV", which it just isen't!

Yes, I have followed LVMH over the years, but never owned the stock. I follow most European global company to some extend. I have owned Nestle for a long time (bought in 2003), but had to sell, because my German brokerage where I held the shares would not do business with German citizens living in the US any more, due to more stringent money laundry laws, I never bought again, since the valuation at that point (and now) seems rich.

Another company in ultra luxury is Herms. They are ridiculously profitable, but the shares are expensive (40x earnings). I think the brand cache of the ultra luxury brands is unassailable, because part of it comes from their French origin. I think there are some Italian leather good / assessory companies that are cheap, albeit with less valuable brands equity.

I've had Hermes, LVMH & CF Richemont on a watch list forever.
Waiting on recession or bad China news to make them cheap?

Have you done the "simple/mini" acid test of this investment, Jeff?

The "simple/mini" acid test of every company is to me to look at it during the years 2007, '08 and '09. How did it perform ref. its financials for those years? How did it end getting out on the other side of the GFC?

We have access to the LVMH financials since 2002 on the LVMH website. What do you see here?
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: rishig on May 21, 2018, 02:20:11 PM
Thank you, Spekulatius,

Your post reads like you have caught interest in LVMH earlier, following it over some years, perhaps many.

It's a complicated investment, - at least to me - and a - for me - new space.

I remember that you have a long term investment in Nestle, that you have held for now many years, that you have mentioned has done very well for you. [Personally, I have now been tracking Nestle for years, without getting in.] Is this company for you similar to Nestle [perhaps not as an investment as such, with regard to thesis, but more like: "The price does not seem right to me here, so I'll just wait and see"], causing one to stay on the sideline indefinitely?

PS:

I really have to post some nitpicking here:

The full formal company name is: "LVMH Mot Hennessy - Louis Vuitton SE", meaning the abbreviation of the company name is "somehow partially reversed", because the direct abbreviation should be "MHLV", which it just isen't!

Yes, I have followed LVMH over the years, but never owned the stock. I follow most European global company to some extend. I have owned Nestle for a long time (bought in 2003), but had to sell, because my German brokerage where I held the shares would not do business with German citizens living in the US any more, due to more stringent money laundry laws, I never bought again, since the valuation at that point (and now) seems rich.

Another company in ultra luxury is Herms. They are ridiculously profitable, but the shares are expensive (40x earnings). I think the brand cache of the ultra luxury brands is unassailable, because part of it comes from their French origin. I think there are some Italian leather good / assessory companies that are cheap, albeit with less valuable brands equity.

I've had Hermes, LVMH & CF Richemont on a watch list forever.
Waiting on recession or bad China news to make them cheap?

Hermes manages to do reasonably okay, businesswise, during recessions too - simply by keeping the supply and demand curves very far from each other. So, surely, the demand goes down during a recession but the supply is much further down that it doesn't matter. Having a very efficient supply chain, for lack of better words, is a curse for these companies :)
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: Cameron on May 21, 2018, 02:36:45 PM
Thank you, Spekulatius,

Your post reads like you have caught interest in LVMH earlier, following it over some years, perhaps many.

It's a complicated investment, - at least to me - and a - for me - new space.

I remember that you have a long term investment in Nestle, that you have held for now many years, that you have mentioned has done very well for you. [Personally, I have now been tracking Nestle for years, without getting in.] Is this company for you similar to Nestle [perhaps not as an investment as such, with regard to thesis, but more like: "The price does not seem right to me here, so I'll just wait and see"], causing one to stay on the sideline indefinitely?

PS:

I really have to post some nitpicking here:

The full formal company name is: "LVMH Mot Hennessy - Louis Vuitton SE", meaning the abbreviation of the company name is "somehow partially reversed", because the direct abbreviation should be "MHLV", which it just isen't!

Yes, I have followed LVMH over the years, but never owned the stock. I follow most European global company to some extend. I have owned Nestle for a long time (bought in 2003), but had to sell, because my German brokerage where I held the shares would not do business with German citizens living in the US any more, due to more stringent money laundry laws, I never bought again, since the valuation at that point (and now) seems rich.

Another company in ultra luxury is Herms. They are ridiculously profitable, but the shares are expensive (40x earnings). I think the brand cache of the ultra luxury brands is unassailable, because part of it comes from their French origin. I think there are some Italian leather good / assessory companies that are cheap, albeit with less valuable brands equity.

I've had Hermes, LVMH & CF Richemont on a watch list forever.
Waiting on recession or bad China news to make them cheap?

Pandora A/S got smacked recently because of a China slowdown.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: John Hjorth on May 22, 2018, 03:16:58 PM
I'm trying to take a break for LVMH for now. I'm trying to stay rational here. [I won't promise it'll hold, however.] The stock price is just somehow insane to me. P/E a bit above 30 right now.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: DooDiligence on May 22, 2018, 07:57:40 PM
Thank you, Spekulatius,

Your post reads like you have caught interest in LVMH earlier, following it over some years, perhaps many.

It's a complicated investment, - at least to me - and a - for me - new space.

I remember that you have a long term investment in Nestle, that you have held for now many years, that you have mentioned has done very well for you. [Personally, I have now been tracking Nestle for years, without getting in.] Is this company for you similar to Nestle [perhaps not as an investment as such, with regard to thesis, but more like: "The price does not seem right to me here, so I'll just wait and see"], causing one to stay on the sideline indefinitely?

PS:

I really have to post some nitpicking here:

The full formal company name is: "LVMH Mot Hennessy - Louis Vuitton SE", meaning the abbreviation of the company name is "somehow partially reversed", because the direct abbreviation should be "MHLV", which it just isen't!

Yes, I have followed LVMH over the years, but never owned the stock. I follow most European global company to some extend. I have owned Nestle for a long time (bought in 2003), but had to sell, because my German brokerage where I held the shares would not do business with German citizens living in the US any more, due to more stringent money laundry laws, I never bought again, since the valuation at that point (and now) seems rich.

Another company in ultra luxury is Herms. They are ridiculously profitable, but the shares are expensive (40x earnings). I think the brand cache of the ultra luxury brands is unassailable, because part of it comes from their French origin. I think there are some Italian leather good / assessory companies that are cheap, albeit with less valuable brands equity.

I've had Hermes, LVMH & CF Richemont on a watch list forever.
Waiting on recession or bad China news to make them cheap?

Have you done the "simple/mini" acid test of this investment, Jeff?

The "simple/mini" acid test of every company is to me to look at it during the years 2007, '08 and '09. How did it perform ref. its financials for those years? How did it end getting out on the other side of the GFC?

We have access to the LVMH financials since 2002 on the LVMH website. What do you see here?

LVMH continued to increased their business & margins as did Hermes & Richemont.

Stocks were in the toilet & I was unaware of them.

I'd probably buy in the next economic downturn.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: John Hjorth on May 24, 2018, 09:01:20 AM
CNBC - [today]: 3 tiny interviews with Mr. Arnault about France, a wedding robe & LVMH, respectively - if you just let the videos roll on (https://www.cnbc.com/video/2018/05/24/macrons-election-means-that-people-now-want-to-come-and-work-in-france-lvmh.html).
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: John Hjorth on July 24, 2018, 11:28:15 AM
LVMH 2018H1 (https://r.lvmh-static.com/uploads/2017/11/rapport-financier-semestriel-2018_va.pdf) out today.

This behemoth is right now running at ROE in the area of 20 percent. Fascinating, to say the least.

I'm not totally rational here, - I simply can't forget this thingy.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: DooDiligence on July 24, 2018, 01:10:27 PM
LVMH 2018H1 (https://r.lvmh-static.com/uploads/2017/11/rapport-financier-semestriel-2018_va.pdf) out today.

This behemoth is right now running at ROE in the area of 20 percent. Fascinating, to say the least.

I'm not totally rational here, - I simply can't forget this thingy.

I'll wait until the next recession.
It won't hurt the business but may cause the equity to drop.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: John Hjorth on August 02, 2018, 08:13:25 AM
LVMH Letter to Shareholders August 2018 [August 2nd 2018] (https://r.lvmh-static.com/uploads/2018/08/letter-to-shareholders-august-2018-e-accessible-version.pdf).
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: Gregmal on September 29, 2018, 02:01:42 PM
Curious if anyone else follows/owns this. I know real estate plays are big with some investors here. This was always one of those dual class structures that traded at a massive discount cuz it would never be sold. Now apparently it's on the block and nearly doubled. Interesting to see what transpires given it's not every day you see one of those perpetual management discount stories get put up for auction. Ultimately, I don't think this gets sold.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: DooDiligence on October 29, 2018, 06:54:01 PM
Price has dropped considerably over the last month.

Not saying it's cheap but these guys just keep crushing it.

---

Old news,

https://www.bloomberg.com/news/articles/2017-04-25/arnault-to-buy-dior-for-13-billion-add-couture-brand-to-lvmh

I'll bet Arnault is super pissed that he couldn't get control of Hermes, especially after the Apple watch bands appeared.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: John Hjorth on October 31, 2018, 02:53:24 PM
I finally got my act together and did the work today to get a secondary broker, to start buying - among other things - this company.

Starting small - very small - like tiny ... It's not nowhere cheap even after it has come down just some recently. To me, this will most likely be like a good old Russian 5-years plan - prolonged four times. [If I live that long, and don't abort prematurely - this one you have to sit on for long periods of time - otherwise the investment does not make sense. Joel's essay: "Price and Returns" (https://drive.google.com/file/d/0BxTPR9eP5nWeZWVid2M5Zi05SG8/view) comes to mind here.]
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: DooDiligence on October 31, 2018, 04:37:25 PM
I finally got my act together and did the work today to get a secondary broker, to start buying - among other things - this company.

Starting small - very small - like tiny ... It's not nowhere cheap even after it has come down just some recently. To me, this will most likely be like a good old Russian 5-years plan - prolonged four times. [If I live that long, and don't abort prematurely - this one you have to sit on for long periods of time - otherwise the investment does not make sense. Joel's essay: "Price and Returns" (https://drive.google.com/file/d/0BxTPR9eP5nWeZWVid2M5Zi05SG8/view) comes to mind here.]

I agree, not necessarily a multi bagger unless you have patience (which I do.)
I think the business is recession resistant.

Fear over slowdowns from Chinese bribery crackdowns are a short term worry IMO.

Long term prosperity & aspirational lifestyles seem like nice tailwinds.

I'm cooling my jets until I read a bit more about the business, which might take a while because we started melodic organization in class a few weeks ago & the material is nearly incomprehensible & requires multiple readings & exercises. Right as you begin to understand it, the instructors pile on even more abstract concepts with semi-rigid rules attached.

Many will drop before the next semester but I will not be one of them.

I may just have to take a tiny leap of faith, like yours, in Louis Vuitton, and hope for a nice drop in price to fill up.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: John Hjorth on October 31, 2018, 05:58:29 PM
I agree, not necessarily a multi bagger unless you have patience (which I do.)
I think the business is recession resistant.

Fear over slowdowns from Chinese bribery crackdowns are a short term worry IMO.

Long term prosperity & aspirational lifestyles seem like nice tailwinds.

I'm cooling my jets until I read a bit more about the business, which might take a while because we started melodic organization in class a few weeks ago & the material is nearly incomprehensible & requires multiple readings & exercises. Right as you begin to understand it, the instructors pile on even more abstract concepts with semi-rigid rules attached.

Many will drop before the next semester but I will not be one of them.

I may just have to take a tiny leap of faith, like yours, in Louis Vuitton, and hope for a nice drop in price to fill up.

Jeff,

The most important thing in life is consciously to build & develop your own life into the future, that you want for yourself.

- - - o 0 o - - -

LVMUY P/E right now at ~22. At least a bit easier to swallow than ~30  [some time ago]. Absolutely not my cup of tea - anyway. However, I will try.

In a conglomerate now including about 70 "houses", there will always be laggards, and thereby mental worries for the investor.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: villainx on October 31, 2018, 07:37:22 PM
I know this is amateur question, but USA investor should buy LVMUY? Tax implications?  And is it IRA friendly?
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: DooDiligence on October 31, 2018, 08:04:49 PM
I know this is amateur question, but USA investor should buy LVMUY? Tax implications?  And is it IRA friendly?

The Y designation means it's an ADR.

https://www.adr.com/Home?cusip=502441306

The ADR's are unsponsored which means the depository will take responsibility for notifying shareholders of proxy statements (I think?)
Not sure about the implications of unsponsored ADR's other than the possibility of late proxy notifications.

I think businesses go unsponsored because there's no SEC filings & associated costs, as opposed to sponsored ADR's?

There will, however, be the usual depository's fee's to shareholders for handling dividend payments & notifications (they're rather small.)

JPM, BNY, CITI, DB are all depositary's.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: John Hjorth on November 01, 2018, 05:21:51 AM
That reads reasonable, Jeff,

Yes, the ADR-fees are modest. Just a few examples of ADR-fees of some ADRs I hold:

SAN : USD 0.0025/share per dividend transaction,
LUKOY : USD 0.02/share per dividend transaction, &
OGZPY : USD 0.02/share per dividend transaction.

- - - o 0 o - - -

I'll buy LVMH at it's primary marketplace [Euronext Paris] using my secondary broker - ticker MC.PA [Link (https://www.euronext.com/en/products/equities/FR0000121014-XPAR/quotes)]. I do not have access to buy LVMUY at my primary broker.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: John Hjorth on December 14, 2018, 02:49:20 AM
LVMH reaches an agreement with Belmond to increase its presence in the ultimate hospitality world [December 14th 2018] (https://www.lvmh.com/news-documents/press-releases/lvmh-reaches-an-agreement-with-belmond-to-increase-its-presence-in-the-ultimate-hospitality-world/).
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: Gregmal on December 14, 2018, 05:31:52 AM
https://seekingalpha.com/news/3417016-lvmh-buy-hotel-group-belmond-3_2b

$25 a share
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: John Hjorth on December 14, 2018, 06:15:00 AM
Primary source: LVMH : LVMH reaches an agreement with Belmond to increase its presence in the ultimate hospitality world [December 14th 2018] (https://www.lvmh.com/news-documents/press-releases/lvmh-reaches-an-agreement-with-belmond-to-increase-its-presence-in-the-ultimate-hospitality-world/).

Not a typical acquisition for Mr. Arnault, because this one goes into the business leg inside LVMH called "other activities" [The hotel chain called Cheval Blanc is already there.] Rest of the "other activities" is : "Groupe Les Echos, which comprises leading French business and cultural news publications; Royal Van Lent, the builder of high-end yachts marketed under the brand name Feadship"  - the common denominator for all this stuff is "art de vivre".

Yes, it's brick and mortar, but that's just a tool for selling expensive experiences!

I took a quick glance at the Belmond website earlier today ... - it's just soo "LVMH"! I coulden't stay away from the Investor Relations section either ... looked a bit at the income statement and the balance sheet, remembering the agreed price.... *GULP*!

-Art de vivre? ... - I'm up for shepards pie for dinner today! [ : - P ]
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: Gregmal on December 14, 2018, 06:28:25 AM
Primary source: LVMH : LVMH reaches an agreement with Belmond to increase its presence in the ultimate hospitality world [December 14th 2018] (https://www.lvmh.com/news-documents/press-releases/lvmh-reaches-an-agreement-with-belmond-to-increase-its-presence-in-the-ultimate-hospitality-world/).

Not a typical acquisition for Mr. Arnault, because this one goes into the business leg inside LVMH called "other activities" [The hotel chain called Cheval Blanc is already there.] Rest of the "other activities" is : "Groupe Les Echos, which comprises leading French business and cultural news publications; Royal Van Lent, the builder of high-end yachts marketed under the brand name Feadship"  - the common denominator for all this stuff is "art de vivre".

Yes, it's brick and mortar, but that's just a tool for selling expensive experiences!

I took a quick glance at the Belmond website earlier today ... - it's just soo "LVMH"! I coulden't stay away from the Investor Relations section either ... looked a bit at the income statement and the balance sheet, remembering the agreed price.... *GULP*!

-Art de vivre? ... - I'm up for shepards pie for dinner today! [ : - P ]

I thought the same things when I heard the news. I've been an admirer of LVMH for a while, but don't own it. This is a beautiful move IMO with many potential synergies. Belmond IMO has historically been mismanaged, but LVMH here is picking up a bunch of trophy assets it can use to sell it's trophy products.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: John Hjorth on December 14, 2018, 06:52:28 AM
... I thought the same things when I heard the news. I've been an admirer of LVMH for a while, but don't own it. This is a beautiful move IMO with many potential synergies. Belmond IMO has historically been mismanaged, but LVMH here is picking up a bunch of trophy assets it can use to sell it's trophy products.

I hope your're right, Greg,

Your line of thinking makes sense to me. Mr. Arnault is not exactly known for screwing up with large amounts of capital. Do you know if anybody controls BEL right now, Greg?
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: Gregmal on December 14, 2018, 07:06:33 AM
The company has a very unique little history. Long story short, the board members from it's original spin off about two decades ago held all the voting rights. They've faced legal battles and proxy fights galore. They even rejected a $60 a share bid IIRC, back in 2006 or so. All things considered, I have a hard time seeing this turn out as value destructive for LVMH.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: John Hjorth on December 14, 2018, 07:14:17 AM
Thanks for overall guidance, Greg,

I'll try to dig it up.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: Gregmal on December 14, 2018, 07:16:11 AM
Found this

https://dealbook.nytimes.com/2012/11/29/at-orient-express-the-board-holds-all-the-cards/

Gives a good background. Orient Express was old name of company.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: Gregmal on December 14, 2018, 07:50:05 AM
Thanks, Greg,

I suggest a merge with the LVMH topic here by contacting [reporting this topic to ] Sanjeev. Thoughts? [We could clean it up a bit afterwards.]

Sounds good.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: peterHK on December 14, 2018, 08:18:18 AM
LVMH reaches an agreement with Belmond to increase its presence in the ultimate hospitality world [December 14th 2018] (https://www.lvmh.com/news-documents/press-releases/lvmh-reaches-an-agreement-with-belmond-to-increase-its-presence-in-the-ultimate-hospitality-world/).

Gotta say I don't see the rationale to spend 3.2bn euro on something with 150mn in EBITDA in an area that doesn't seem to have a lot of fit with what you do. Unless they outfit the whole thing with LV home or something I don't get it.
Title: Re: LVMUY - LVMH Mot Hennessy - Louis Vuitton SE
Post by: John Hjorth on April 12, 2019, 01:34:59 AM
LVMH [April 12th 2019] : LVMHs acquisition of Belmond approved (https://r.lvmh-static.com/uploads/2019/04/12-04-belmond-press-release-gb-12-04-2019.pdf).
Title: Re: LVMUY & MC.PA: LVMH Mot Hennessey - Louis Vuitton SE
Post by: John Hjorth on May 10, 2019, 10:49:10 AM
LVMH [May 10th 2019] : LVMH announces the fast approaching launch of a new luxury Maison, developed by Robyn Rihanna Fenty (https://r.lvmh-static.com/uploads/2019/05/cp_en-10052019.pdf).

Website for the Maison to come (https://www.fenty.com/).

Wikipedia : Robyn Rihanna Fenty (http://https://en.wikipedia.org/wiki/Rihanna).

- - - o 0 o - - -

Personally, I like the idea of building up new Maisons/brands [which are supposed to have business potential] from the ground & internally. Somehow, it's a part of LVMH's entrepreneurial spirit. If it does not work out, Mr. Arnault will just kill it [ref. what Spekulatius has posted earlier in this topic], or perhaps sell the whole thing again to Rihanna.

Please give me a break about "total freedom" - I think it's more like "total freedom, subject to performance". I wonder how the agreement is bolted together. I [as I understand from the board recently, "we" is not so welcome here on CoBF any longer [ : - D ]] will most likely have to wait for the 2019 Reference Document to get some perception of the details of the agreement.
Title: Re: LVMUY & MC.PA: LVMH Mot Hennessey - Louis Vuitton SE
Post by: John Hjorth on October 28, 2019, 06:34:06 AM
LVMH Press release [October 28th 2019] : Press Release [about a potential bid for Tiffany & Co.] (https://www.lvmh.com/news-documents/press-releases/press-release-oct-28/).

Reuters [October 28th 2019] : LVMH woos Tiffany to tap fast-growing jewelery market (https://www.reuters.com/article/us-tiffany-m-a-lvmh/lvmh-confirms-talks-over-possible-acquisition-of-jeweler-tiffany-idUSKBN1X70MZ).

It seems like a bid for Tiffany's from LVMH of USD 14.5 B has been turned down by Tiffany's board. I'm not sure Kering or Richemont can keep up here with competing bids [not similar acquisition capacity to LVMH]. I just took a quick glance at TIF 2018 Financials. After that, I have the same feeling here as with LVMH's Belmond acquisition.

It seems like last round of the hunt for trophy assets among the three World leaders in this space. Is there any real & material assets left to acquire for the three in this space? The only thing that I can come up with is the privately held Swiss watchmaker Patek Philippe.
Title: Re: LVMUY & MC.PA: LVMH Mot Hennessey - Louis Vuitton SE
Post by: DooDiligence on October 28, 2019, 06:56:51 AM
LVMH Press release [October 28th 2019] : Press Release [about a potential bid for Tiffany & Co.] (https://www.lvmh.com/news-documents/press-releases/press-release-oct-28/).

Reuters [October 28th 2019] : LVMH woos Tiffany to tap fast-growing jewelery market (https://www.reuters.com/article/us-tiffany-m-a-lvmh/lvmh-confirms-talks-over-possible-acquisition-of-jeweler-tiffany-idUSKBN1X70MZ).

It seems like a bid for Tiffany's from LVMH of USD 14.5 B has been turned down by Tiffany's board. I'm not sure Kering or Richemont can keep up here with competing bids [not similar acquisition capacity to LVMH]. I just took a quick glance at TIF 2018 Financials. After that, I have the same feeling here as with LVMH's Belmond acquisition.

It seems like last round of the hunt for trophy assets among the three World leaders in this space. Is there any real & material assets left to acquire for the three in this space? The only thing that I can come up with is the privately held Swiss watchmaker Patek Philippe.

Maybe someone will make another run at Hermes?

 ???

http://www.thefashionlaw.com/home/hermes-vs-lvmh-a-timeline-of-the-drama

---

https://qz.com/970211/with-the-acquisition-of-christian-dior-almost-all-of-luxury-fashion-including-gucci-and-hermes-is-now-owned-by-two-french-families-the-arnaults-and-pinaults/
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: CorpRaider on October 28, 2019, 07:07:17 AM
JFC was waiting on TIF to dip into 80s again.   :'(
Title: Re: LVMUY & MC.PA: LVMH Mot Hennessey - Louis Vuitton SE
Post by: John Hjorth on October 28, 2019, 08:57:33 AM
Maybe someone will make another run at Hermes?

 ???

http://www.thefashionlaw.com/home/hermes-vs-lvmh-a-timeline-of-the-drama (http://www.thefashionlaw.com/home/hermes-vs-lvmh-a-timeline-of-the-drama)

---

https://qz.com/970211/with-the-acquisition-of-christian-dior-almost-all-of-luxury-fashion-including-gucci-and-hermes-is-now-owned-by-two-french-families-the-arnaults-and-pinaults/ (https://qz.com/970211/with-the-acquisition-of-christian-dior-almost-all-of-luxury-fashion-including-gucci-and-hermes-is-now-owned-by-two-french-families-the-arnaults-and-pinaults/)

Great!, Jeff, thank you for sharing,

The first link of yours actually deserves a partly quote :

Quote
In October 2010, the fashion world was slapped with some striking news. As noted by no shortage of publications at the time, Herms' then-CEO Patrick Thomas would only find out two hours before the rest of the world about the shocking development that would take his company by storm. In fact, he received the news while cycling through the French Alps. He received a phone call; it was Bernard Arnault, chairman of LVMH Mot Hennessy Louis Vuitton.

The call was reportedly quite brief - made purely to alert Mr. Thomas that LVMH would be announcing that it had acquired a 17% stake in Herms, largely a family controlled company, in which the Puech, Dumas and Guerrands controlled a 70 per cent stake. Thomas was - according to sources - so enraged, his response to Mr. Arnault was simply this: If you want to seduce a beautiful woman, you dont start by raping her from behind. ...


The entertainment value is great. [ : - ) ]

- - - o 0 o - - -


Personally, I have ruled out Herms as an acquisition object in this race, because the Herms family has absolute control [north of 70 percent of the total votes, according to the latest [2018] Hermes Registration Document].

Mr. Arnault is now basically only involved in Hermes via his private [family controlled] investment vehicle Semyrhamis with a bit north of 5 percent in Hermes. [He used Semyrhamis to gain control of Dior, the immediate parent of LVMH, now many years ago. One will have to study Dior to get a detailed understanding of the superstructure of LVMH - It's not available on the LVMH website.]

- - - o 0 o - - -

Ohh, I forgot : Over time, there will perhaps be French top notch Wine Chateaus available ... - Most likely at ridiculous prices! ...

- - - o 0 o - - -

-Those French corporate raiders are actually very special ... [- Please add Mr. Bollor here.] They fear nothing, but :

a. French inheritance taxes, and
b. Their kids selling controlling stock positions.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: DooDiligence on October 28, 2019, 12:56:33 PM
One of these days, I'd like to own a little bit of LVMH or Hermes.

They just seem so durable.
Title: Re: LVMUY & MC.PA: LVMH Mot Hennessey - Louis Vuitton SE
Post by: John Hjorth on October 28, 2019, 02:03:50 PM
One of these days, I'd like to own a little bit of LVMH or Hermes.

They just seem so durable.

This sort of companies are wonderful [and there are actually very few existent on the planet right now]. However it's not by any mean clear that they at recent market price levels are wonderful investments. Patience is key [and you may eventually end up getting it totally wrong anyway!] ... [ Joel Stevens, Austin Value Capital [December 31st 2015] : Price and Returns (https://drive.google.com/file/d/0BxTPR9eP5nWeZWVid2M5Zi05SG8/view)].

Absolutely not for everybody. Personally, I've concluded, that - at least for me - the best way is to average in - over a time span of several years [no guaranties even given that it will play out].
Title: Re: LVMUY & MC.PA: LVMH Mot Hennessey - Louis Vuitton SE
Post by: DooDiligence on October 29, 2019, 04:54:59 AM
One of these days, I'd like to own a little bit of LVMH or Hermes.

They just seem so durable.

This sort of companies are wonderful [and there are actually very few existent on the planet right now]. However it's not by any mean clear that they at recent market price levels are wonderful investments. Patience is key [and you may eventually end up getting it totally wrong anyway!] ... [ Joel Stevens, Austin Value Capital [December 31st 2015] : Price and Returns (https://drive.google.com/file/d/0BxTPR9eP5nWeZWVid2M5Zi05SG8/view)].

Absolutely not for everybody. Personally, I've concluded, that - at least for me - the best way is to average in - over a time span of several years [no guaranties even given that it will play out].

Are we attracted to luxury businesses in the same way that their customers are attracted to their products?
Title: Re: LVMUY & MC.PA: LVMH Mot Hennessey - Louis Vuitton SE
Post by: John Hjorth on October 29, 2019, 04:50:03 PM
Are we attracted to luxury businesses in the same way that their customers are attracted to their products?

Jeff,

No! - And that's an absolute & personal "No!" from me.

- - - o 0 o - - -

Honestly, the last month or so, some IRL issues have caught up with me, [not that serious, but they have had to be dealt with]. I'll elaborate later, and I also [off topic] look forward to get the communication here on CoBF on the fly again with regard to ODET.PA & BOL.PA.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: sleepydragon on October 29, 2019, 06:52:38 PM
One of these days, I'd like to own a little bit of LVMH or Hermes.

They just seem so durable.

Richemond seems cheap. About 15 PE. Up today on TIF news
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: DooDiligence on October 30, 2019, 05:24:53 AM
One of these days, I'd like to own a little bit of LVMH or Hermes.

They just seem so durable.

Richemond seems cheap. About 15 PE. Up today on TIF news

 ;)

Thanks, I'd forgotten about them.

They do own a lot of venerable old lines.
Title: Re: LVMUY & MC.PA: LVMH Mot Hennessey - Louis Vuitton SE
Post by: John Hjorth on October 31, 2019, 11:25:35 AM
TIF spiked up north of 130 after the LVMH Press Release about a bid at 120, now trading at ~124. I wonder what Mr. Arnault will do here.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: fareastwarriors on November 24, 2019, 10:00:25 AM
LVMH reaches deal to acquire Tiffany for $16.3 billion

https://www.cnbc.com/2019/11/24/lvmh-reaches-deal-to-acquire-tiffany-for-16point3-billion.html (https://www.cnbc.com/2019/11/24/lvmh-reaches-deal-to-acquire-tiffany-for-16point3-billion.html)
Title: Re: LVMUY & MC.PA: LVMH Mot Hennessey - Louis Vuitton SE
Post by: John Hjorth on November 24, 2019, 10:27:14 AM
Still no press releases on the primary sources [TIF & LVMH websites]. Paris opens in about 13 hours from now, so it'll be released before then, if CNBC got it right here.
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: CorpRaider on November 24, 2019, 11:14:22 AM
David Faber made the report?  Sheeaat that's all you had to say.
Title: Re: LVMUY & MC.PA: LVMH Mot Hennessey - Louis Vuitton SE
Post by: John Hjorth on November 24, 2019, 02:33:25 PM
While perhaps some CoBF members may wait for news (https://www.lvmh.com/news-documents/news/cashmere-the-origin-of-a-secret-through-the-lens-of-filmmaker-luc-jacquet-loro-piana-invites-viewers-to-discover-the-sources-of-its-iconic-raw-material/) from LVMH, here is : Loro Piana : CASHMERE - The Origin of a Secret (https://cashmere.theoriginofasecret.loropiana.com/en/).(*)

- - - o 0 o - - -

(*) This must be a keeper for rkbabang.
Title: Re: LVMUY & MC.PA: LVMH Mot Hennessey - Louis Vuitton SE
Post by: John Hjorth on November 25, 2019, 03:52:50 AM
LVMH Press Release [November 25th 2019] : LVMH Reaches Agreement with Tiffany & Co (https://r.lvmh-static.com/uploads/2019/11/lvmh-tiffany-press-release-en.pdf).

It seems like the code name for the acquisition project has been "Breakfast" - there is some talk about a Merger HoldCo named "Breakfast Holdings Acquisition Corp." and a merger sub called "Breakfast Acquisition Corp." in the Press Release. [ : - ) ]
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: Okonomen on March 11, 2020, 03:19:42 AM
LVMH now at around 20x earnings with significant exposure to Asia (30-40% of rev). Ithink this is an interesting and very moaty business with great management. Just have a hard time with the current uncertainty in China, but I guess that's why it trades under 20x 2021 earnings
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: jefke on May 04, 2020, 04:33:06 AM
Has anyone done any work on owning the stock through Dior (CDI.PA)? My interest was peaked as CDI always seemed to trade at a premium to MC.PA (= LVMH), but this switched to a discount at the peak of corona panic in March.

Having a hard time to find the exact corporate structure as Dior only seems to have annual reports in French, making it not easy to see the potential discount.

Where I'm at so far:

Dior is how the Arnault family hold most of their MC.PA shares. Dior holds 41% of MC shares and 56.8% of the voting rights.

At 180m Dior shares outstanding & 503m MC shares, there's about 1.145 share of MC (or LVMH) per share of Dior.

1) Any debt or net cash at CDI level?
Having a hard time figuring this out with no clear overview in the French annual report.

I looked at consolidated Dior numbers from their annual report and seem to have about 390m more cash for CDI, but also some extra borrowings which more or less cancel the cash out. There's 400m less of a deferred tax liability at CDI level. Other than that, i'm confused by slightly lower asset values on the CDI consolidated balance sheet. What causes this?

2) A holdco comes at a price. And based on some googling there seems to be 1-5% tax leakage when CDI receives the LVMH dividends.

3) That said, CDI seems to be willing to hand out extra cash and had an extra dividend in Dec 2019 for a total of 34 share compared to 4.8 for LVMH if I'm correct? In 2018 there was the same pay out for both companies.

=> based on my research, seems like there's no extra debt at CDI level, while having an underlying value of 1.14 LVMH share per CDI share.

Currently they both trade at 335. So by buying CDI, you currently buy LVMH at a discount. And if CDI keeps paying out that cash, you'll receive a higher dividend yield over time.

4) Historical prices in

May 20 2019: MC: 336.5 & CDI : 431 (before CDI returned about 29 extra per cash that MC didn't)
Feb 2 2020: MC: 415 & CDI: 440
March 16 2020: MC: 311 & CDI : 265.6
May 4 2020 : MC: 335.45 & CDI : 335.2

RISKS
There's usually a way to get burned if you want to be too clever and get a discount on an underlying asset instead of just buying the underlying asset.

I guess there's a chance that at some point CDI does something that's less friendly vs the minority shareholder?

(Thoughts & feedback welcome. I'm just a rookie in the investment game. Might have made mistakes. Feedback highly appreciated!)
Title: Re: LVMUY: LVMH - Louis Vuitton Moet Hennessey
Post by: jefke on June 26, 2020, 04:45:09 AM
Saw this one pop up on Twitter again (https://twitter.com/DantonQu/status/1276446289908162561)

"What is the reason for Dior's lagging performance vs LVMH?"

"Because French squeeze-out rules."

So I have done some googling and seems like:

Arnault can launch a buy out offer at any price he chooses, with the intention of launching a squeeze-out afterwards.
Squeeze-out happens if an "independent expert" considers it a fair offer.

If the expert says it's fair, you're screwed? He already owns > 95%, so nothing minority shareholder can do?


Anyone have anything to add to this?
Title: Re: LVMUY & MC.PA: LVMH - Mot Hennessey Louis Vuitton SE
Post by: John Hjorth on June 26, 2020, 07:32:43 AM
jefke,

First a very belated welcome to you here on CoBF, and thank you very much for a first post of yours - to me, of high quality - here on CoBF! [ : - ) ]

- - - o 0 o - - -

Respectfully and kindly, I take the freedom to suggest that you open & start a new topic about Christian Dior SE [CDI.PA] here in the Investment Idea forum for discussion of the MC.PA/CDI.PA pair. [This idea based on your observations is yours, and we don't have a separate topic for discussion of CDI.PA as far as I can see, so the privilege of starting the topic belongs in my view to you.]

I actually have some tangible to add to that particular discussion if you choose to do so [I hope you do, actually].

- - - o 0 o - - -

With regard to LVMH itself, I'm suffering from nagging doubts about if any or several of the brands have been subject to long term impairment caused by the pandemic, that again caused by permanent changes in consumer behavior among LVMH's various kinds of customers.
Title: Re: LVMUY & MC.PA: LVMH - Mot Hennessey Louis Vuitton SE
Post by: DooDiligence on June 26, 2020, 10:28:04 AM
jefke,

First a very belated welcome to you here on CoBF, and thank you very much for a first post of yours - to me, of high quality - here on CoBF! [ : - ) ]

- - - o 0 o - - -

Respectfully and kindly, I take the freedom to suggest that you open & start a new topic about Christian Dior SE [CDI.PA] here in the Investment Idea forum for discussion of the MC.PA/CDI.PA pair. [This idea based on your observations is yours, and we don't have a separate topic for discussion of CDI.PA as far as I can see, so the privilege of starting the topic belongs in my view to you.]

I actually have some tangible to add to that particular discussion if you choose to do so [I hope you do, actually].

- - - o 0 o - - -

With regard to LVMH itself, I'm suffering from nagging doubts about if any or several of the brands have been subject to long term impairment caused by the pandemic, that again caused by permanent changes in consumer behavior among LVMH's various kinds of customers.

My own personal opinion is that although covid may affect sales in the short term, the majority of LVMH brands are strong, especially when compared to newcomers which lack a strong history & cache.

As to Arnaults antics, no comment.
Title: Re: LVMUY & MC.PA: LVMH - Mot Hennessey Louis Vuitton SE
Post by: jefke on June 26, 2020, 11:30:06 AM
jefke,

First a very belated welcome to you here on CoBF, and thank you very much for a first post of yours - to me, of high quality - here on CoBF! [ : - ) ]

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Respectfully and kindly, I take the freedom to suggest that you open & start a new topic about Christian Dior SE [CDI.PA] here in the Investment Idea forum for discussion of the MC.PA/CDI.PA pair. [This idea based on your observations is yours, and we don't have a separate topic for discussion of CDI.PA as far as I can see, so the privilege of starting the topic belongs in my view to you.]

I actually have some tangible to add to that particular discussion if you choose to do so [I hope you do, actually].

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With regard to LVMH itself, I'm suffering from nagging doubts about if any or several of the brands have been subject to long term impairment caused by the pandemic, that again caused by permanent changes in consumer behavior among LVMH's various kinds of customers.

Thanks for the welcome. I just opened a thread for Dior: https://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/cdi-pa-christian-dior-se/