Thermador 2024 numbers

Thermador released 2024 numbers last Friday. Essentially the most optimistic a part of the discharge is the truth that Thermador manages to place every thing you should 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 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 intervening time I’ll sit on my palms, 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 troublesome as they’re typically depending on primarily one group of consumers (Governements) and depend on rare massive orders with vital “covenants”. The listing 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 firms which have actual issues and just some publicity to Defence, corresponding to Thyssenkrupp at the moment are 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 appears to be like apparent. One thing to recollect for the following related scenario. Diversification isn’t a foul factor in risky instances.

The subsequent query can be: Does it make sense to leap on that Defence FOMO prepare proper now ?

I suppose that very a lot depends upon the time horizon one is . Personally, I’m actually an excellent unhealthy brief time period momentum investor. Additionally basically, it’s not so clear to me to what lengthen and how briskly the earnings of the Defence firms will improve.

Rheinmetall as an 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 improve and may improve some extra however for me the massive query is the next: There will probably be clearly a increase in defence spending for a few years however then what ?

This can be a capital intensive business and Rheinmetall & Co will want to spend so much on PP&A. However until there’s a full blown struggle and/or the Ukraine struggle massively escalates, after a couple of years, Europe may 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 detrimental state of affairs can be that the US/Trump stress Europe to massively purchase American weapons as a way to keep away from punitive tariffs. I believe this state of affairs 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 increase appears to be like a bit of bit just like the Renewables increase from 2022 when Russia attacked Ukraine:

Renewable Vitality was hailed as the long run resolution (“independence power”) 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 struggle started and the fuel was shut off.

For me personally, I cannot make investments into these overrated protection shares. In fact 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 basic foundation. And as I discussed: I’m not superb on timing these brief time period “FOMO” strikes.

There is likely to be alternatives alongside the worth chain, however in the interim I’ll keep on with my boring & underperforming “high quality” small caps.