Disclaimer: This is not investment advice. PLEASE DO YOUR OWN RESEARCH !!!
As in the past, due to the bad WordPress editor, I’ll post a summary here and attach the full write-up as PDF.
After teasing a new position in the Nabaltec “Post Mortem”, I proudly present the next (hopefully) super boring company for my boring portfolio.
SAMSE SA is a French company that distributes building materials to “professional” customers like contractors, craftsmen etc. It also has a smaller “Direct to consumer” DYI store segment, which represents around 20% of sales. Samse is active only in France and No. 2 after Saint Gobain, which, however is much bigger even only in this specific sector (2000 outlets vs. 350).
Here is an overview of relevant “KPIs” at a share price of 190 EUR (time of writing):
PDF file with detailed write-up:
Pro’s and Con’s
What do I like:
- Family owned/controlled
- Exceptionally high employee ownership
- Conservative financial profile and business model
- Countercyclical M&A
- Decentralized organization
- Very good company culture
- business that I kind of understand (distribution)
- not attractive at first sight
- potential “soft catalyst” through acquisition in tough times
- reasonable valuation
Risks
- Still Leverage on Holdco level
- maybe over earning in 2021 and 2022
- Cycle in building materials might still get worse
- low free float
- adds to my sector exposure (Thermador, Sto, Solar)
- For some reason, they have discontinued English reports from 2018 onwards
Summary:
SAMSE seems to be one of those high quality “hidden Champion” companies that I am always looking for. The business is extremely boring and subject to economic cycles. On the other hand, the company seems to be very well managed and they seem to be able to use the cycles to get out stronger from the lows than they entered.
I decided to allocate a 3% position into SAMSE at an average price of 190 EUR per share, funded mainly by the sale of the Nabaltec position. The 3% reflects my current exposure to the sector.
Honestly, I do not expect a great and quick run up of the share price. I actually hope that the share price does very little and that I can add if fundamentals slowly get better over time like in the Schaffner and Meier Tobler case.
Sources:
A big thanks especially to Jeremy from “French Hidden Champions” and Philippe Luchesi. Both guys are worth following if you are interested in quality French stocks.
Philippe on SAMSE:
Jeremy on SAMSE:
https://frenchhiddenchampions.substack.com/p/sfaf-analyst-meeting-report-samse?s=w
A recent interview with the CEO:
