Thermador 2024 numbers
Thermador launched 2024 numbers final Friday. Probably the most optimistic a part of the discharge is the truth that Thermador manages to place every thing you might want to know on two pages with none BS. The numbers have been clearly not good, with gross sales down -13,5% in 2024 and revenue down -23,3%:
On the optimistic aspect, Thermador appears to proceed to search for acquisition targets:
At a 2024 P/E of 13,3, Thermador is neither tremendous low cost nor tremendous costly. In the intervening time I’ll sit on my fingers, but when the share worth would go beneath 60 EURper share, I would add on an opportunistic foundation.
Some ideas on (European) Defence shares
Not too surprisingly, European Defence shares have been on a tear already for a while, solely to additional speed up on the time of writing following the Shitshow that occurred in Mr. Trump’s places of work on Friday.
For me, Defence shares at all times have been tough as they’re typically depending on primarily one group of patrons (Governements) and depend on rare massive orders with vital “covenants”. The checklist of disappointments for these shares is lengthy.
Nonetheless, Defence shares are clearly the momentum shares of the second, because the charts of those chosen European shares present:
Rheinmetall, the German tank and ammunition producer is a 13 bagger over the previous 5 years. Even corporations which have actual issues and just some publicity to Defence, resembling Thyssenkrupp are actually in “vertical mode”:
One query I’ve to ask myself is clearly: Wouldn’t it have been by some means sensible and a form of “hedge” to personal a few of the names because it was clear that Trump gained the election within the US ? In excellent hindsight, this seems apparent. One thing to recollect for the following comparable scenario. Diversification is rarely a foul factor in risky instances.
The subsequent query can be: Does it make sense to leap on that Defence FOMO practice proper now ?
I suppose that very a lot will depend on the time horizon one is taking a look at. Personally, I’m actually a brilliant unhealthy brief time period momentum investor. Additionally essentially, it’s not so clear to me to what lengthen and how briskly the income of the Defence corporations will enhance.
Rheinmetall for example trades at a trailing P/E of round 70x. Wanting on the final 23 years, we will see that on common, EBIT margins have been single digits and ROCE at greatest at 15%.
Sure, EBIT margins did enhance and may enhance some extra however for me the massive query is the next: There might be clearly a growth in defence spending for a few years however then what ?
It is a capital intensive business and Rheinmetall & Co will want to spend so much on PP&A. However except there’s a full blown battle and/or the Ukraine battle massively escalates, after just a few years, Europe can have beefed up its defence capabilities considerably after which the required capability will drop considerably becasue you don’t exchange your tanks or ammunation each 3-5 years.
One other damaging situation can be that the US/Trump strain Europe to massively purchase American weapons with a view to keep away from punitive tariffs. I feel this situation just isn’t so unlikely and may additionally restrict the upside for the European rivals within the mid time period.
To me, the present defence growth seems slightly bit just like the Renewables growth from 2022 when Russia attacked Ukraine:
Renewable Vitality was hailed as the long run resolution (“independence vitality”) and a protracted and affluent future was virtually assured. Now, 3 years later, ,ost Renewable gamers misplaced -50% to -60% from their peak and are buying and selling decrease than when the battle started and the gasoline was shut off.
For me personally, I can’t make investments into these overestimated protection shares. After all they’ll simply go up one other 20%, 30% and even 50%, however within the mid-term, I suppose they’re greater than pretty valued on a basic foundation. And as I discussed: I’m not excellent on timing these brief time period “FOMO” strikes.
There is perhaps alternatives alongside the worth chain, however in the interim I’ll follow my boring & underperforming “high quality” small caps.
