Thermador 2024 numbers
Thermador launched 2024 numbers final Friday. Probably the most constructive a part of the discharge is the truth that Thermador manages to place all the pieces you could know on two pages with none BS. The numbers had been clearly not good, with gross sales down -13,5% in 2024 and revenue down -23,3%:
On the constructive facet, 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 meanwhile 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 workplaces on Friday.
For me, Defence shares all the time have been tough as they’re typically depending on primarily one group of consumers (Governements) and depend on rare massive orders with vital “covenants”. The checklist of disappointments for these shares is lengthy.
However, 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, equivalent to Thyssenkrupp at the moment are in “vertical mode”:
One query I’ve to ask myself is clearly: Wouldn’t it have been one way or the other sensible and a form of “hedge” to personal a few of the names because it was clear that Trump received the election within the US ? In good hindsight, this appears apparent. One thing to recollect for the subsequent related scenario. Diversification isn’t a nasty factor in unstable instances.
The subsequent query could be: Does it make sense to leap on that Defence FOMO practice proper now ?
I suppose that very a lot relies on the time horizon one is taking a look at. Personally, I’m actually a brilliant unhealthy quick time period momentum investor. Additionally basically, it’s not so clear to me to what lengthen and how briskly the earnings 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 finest at 15%.
Sure, EBIT margins did enhance and would possibly enhance some extra however for me the large query is the next: There will probably be clearly a growth in defence spending for a few years however then what ?
This can be a capital intensive trade and Rheinmetall & Co will want to spend so much on PP&A. However except there’s a full blown warfare and/or the Ukraine warfare massively escalates, after a number of years, Europe can have beefed up its defence capabilities considerably after which the required capability will drop considerably becasue you don’t change your tanks or ammunation each 3-5 years.
One other unfavorable situation could be that the US/Trump strain Europe to massively purchase American weapons with the intention to keep away from punitive tariffs. I believe this situation is just not so unlikely and may additionally restrict the upside for the European opponents within the mid time period.
To me, the present defence growth appears a little bit bit just like the Renewables growth from 2022 when Russia attacked Ukraine:
Renewable Vitality was hailed as the long run resolution (“independence vitality”) and an extended and affluent future was nearly assured. Now, 3 years later, ,ost Renewable gamers misplaced -50% to -60% from their peak and are buying and selling decrease than when the warfare started and the gasoline was shut off.
For me personally, I can’t make investments into these puffed up protection shares. After all they will 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 elementary foundation. And as I discussed: I’m not superb on timing these quick time period “FOMO” strikes.
There is perhaps alternatives alongside the worth chain, however in the intervening time I’ll follow my boring & underperforming “high quality” small caps.